Puxin Limited (NYSE: NEW) (“Puxin” or the “Company”) is a successful consolidator of the after-school education industry in China. Puxin has a strong acquisition and integration expertise to effectively improve education quality and operational performance of acquired schools. Through acquisitions and organic growth, Puxin has grown rapidly and became the third largest after-school education service provider in China in 2017 in terms of student enrollments, according to the Frost & Sullivan report. Since our inception, Puxin has acquired 64 schools and built a nationwide network of 446 learning centers across 35 cities in China as of December 31, 2019.
Puxin offers a full spectrum of K-12 and study-abroad tutoring programs designed to help students achieve academic excellence, as well as prepare for admission tests and applications for top schools, universities and graduate programs in China and other countries. In addition to classroom-based tutoring, the Company has also developed online and mobile applications to increase students’ after-class exposure to our services and enhance their learning experience.
Puxin believes that education inspires personal growth and opens up opportunities. The Company’s mission is to empower people to build better lives through learning. Puxin is committed to providing high quality education services to students, as well as upgrading the service quality in China’s after-school education industry by applying its acquisition and integration expertise.
The Company has developed a business model effectively combining strategic acquisitions and organic growth achieved through successful post-acquisition integration, which has differentiated the Company from other after-school education service providers in China. This approach has enabled Puxin to achieve rapid growth and capture consolidation opportunities in China’s fragmented after-school education market.
Puxin has adopted a systematic and disciplined approach towards acquisitions. The Company screens and evaluates potential acquisitions through a set of rigorous criteria, including the targets’ geographic location, reputation in the local market, growth potential, synergies with its existing schools and the probability of successful integration. These acquisitions enable Puxin to penetrate target markets with relatively low customer acquisition and marketing costs by leveraging the well-established presence of acquired schools in local markets.
The Company is able to efficiently complete its acquisitions and rapidly improve operations and management of acquired schools because of its superior post-acquisition management and operational capabilities. In all acquired schools, Puxin implements its modular management system, Puxin Business System, or PBS. It is designed in-house by the Company’s core management team reflecting over 15 years of accumulated management experience in China’s education industry. PBS incorporates the best practices of operating after-school learning centers in a standard, common collection of business processes and process improvement methodologies. It covers over 3,000 management processes and Puxin uses PBS tools to analyze schools’ growth potential and formulate improvement plans.
Puxin is committed to providing its students with high quality services and outstanding learning experience. The Company’s commitment is reflected in recruitment, training and retaining the best teachers, developing and improving our curriculum and course materials, as well as standardizing operating procedures and learning practices throughout its network. This focus on quality has led to a high level of student satisfaction and strong academic results, enabling the Company to reach high student retention rate and contributing to student recruitment. As a result, most of its acquired schools achieved robust organic growth under Puxin operations.
Puxin believes that its track record of successful acquisitions and post-acquisition integration has not only created network effects attracting increasing number of independent after-school operators seeking potential exit, but also created entry barriers for potential competitors. The Company has established “Puxin” as one of the most-recognized brand names among industry participants and built its first-mover advantage to capture consolidation opportunities in China’s after-school education market.