Hailiang Education Group Inc. operates as an education and management services provider in the People’s Republic of China (the PRC). The company’s offering include K-12 student management services and high school curriculum education services, operation and management service, and ancillary educational services.
The company conducts its business through its subsidiaries and affiliated entities in China. The company’s owned and operated 14 affiliated schools offering curriculum education of prim...
Hailiang Education Group Inc. operates as an education and management services provider in the People’s Republic of China (the PRC). The company’s offering include K-12 student management services and high school curriculum education services, operation and management service, and ancillary educational services.
The company conducts its business through its subsidiaries and affiliated entities in China. The company’s owned and operated 14 affiliated schools offering curriculum education of primary, middle, and high schools in Zhejiang province, Jiangsu province, Gansu province, Anhui province and Shandong province of China, during fiscal year 2021. As of June 30, 2021, the company managed and operated, but did not own or sponsor, an additional 27 private and public schools that offer curriculum education of primary, middle, and high schools in the Jiangxi, Hubei, Jiangsu and Zhejiang provinces of China. Due to the promulgation of 2021 Implementation Rules for Private Education Laws, commencing with fiscal year 2022, the company has ceased providing operation and management services to its managed schools sponsored by related parties, i.e., Xiantao No.1 Middle School and Nanrui Experimental School in order to comply with relevant laws and regulations.
K-12 student management services and high school curriculum education services include accommodation and after-school enrichment services to K-12 school students and high school curriculum education services, which are offered through the company’s affiliated high schools and wholly owned service companies, such as Zhuji Hailiang Logistics, Ningbo Haoliang and Hailiang After-school. During the fiscal year ended June 30, 2021, the company provided K-12 student management services to 27,972 students which were enrolled in its affiliated high schools and K-9 schools, and it provided high school curriculum education services to 10,402 student which were enrolled in its affiliated high schools.
For continuing operations, the company offers its basic educational program at the high school levels, which covers grades ten to twelve, and an international program at high school level, which covers grades ten to twelve. The company’s international program offers curricula mandated by the PRC regulatory authorities with a focus on preparing students to study abroad. As most of the students in the company’s international program plan to study abroad after they graduate from high school, it has designed its international program to specifically address the linguistic and academic needs of these students. In addition, the company provides courses designed to help students become eligible to U.S., U.K. and Australian undergraduate programs in high school, including as A-levels courses for U.K. universities, AP courses for U.S. universities, or Victorian Certificate of Education (VCE) courses for Australian universities, International Baccalaureate (IB) courses for many countries in the world, and language courses, such as Japanese, Korean, Spanish.
With respect to the company’s international program, it has continued to develop new courses with its partners or collaborators to strengthen the competitiveness of the programs offered by its affiliated schools. These programs are intended to provide an efficient international education pathway to students who wish to study abroad for their undergraduate degrees. On February 25, 2017, Zhejiang Zhuji Hailiang Foreign Language School, the company and Thomas Carr College in Australia entered into a collaboration agreement (TCC Agreement) to deliver the VCE program, as authorized by the Victorian Curriculum and Assessment Authority (VCAA), in addition to Chinese high school curriculums for students aiming at studying in Australian higher education institutions.
The company provides operation and management services to schools that it does not own or sponsor (managed schools), including but not limited to branding, academic management, basic and international education resources, school culture, admission, finance, human resources, procurement, IT, internal audit, property and logistics management services. The company may provide additional services in the future, as needed, to its managed schools. As of June 30, 2021, the company provided operation and management services to 27 managed schools.
Schools and Programs
As of June 30, 2021, for the company’s continuing operations, it had an aggregate number of 10,402 students in the high schools, and its schools employed an aggregate number of 948 teachers and educational staff as of June 30, 2021.
According to school policy, substantially all of the company’s students live in its boarding facilities. The company provides student dormitory and cafeteria services to K-12 students. Each student dormitory building houses 144 to 1,636 students. Students who want to commute, rather than board at the company’s affiliated schools, are reviewed and admitted on a case-by-case basis. The company charges students basic accommodation fees, and accommodation standard upgrade fees generally range from RMB2,400 to RMB12,000 per school year, for students who wish to upgrade their dormitory accommodation. During the time the company’s students are boarding, each accommodation building is equipped with a certain number of life coaches who are responsible for taking care of student living, and cafeterias offer students breakfast, lunch and dinner. Apart from cafeteria staff, the company also engaged dietitians to guarantee a balanced and nutritious diets to its students. Additionally, as of June 30, 2021, the company had provided operation and management services to 27 managed schools in the PRC that it did not own or sponsor, either directly or through its affiliated entities in the PRC. Students enrolled in the company’s affiliated schools can choose between enrolling in its basic educational program and international program.
Basic Educational Program
The basic educational program offered by the company’s affiliated high schools are composed of compulsory courses required by the PRC regulatory authorities and a variety of elective courses to develop student interests, strength and comprehensive ability. High school students in the company’s basic educational program generally prepare for and take Gaokao, a standardized annual admission test administered by local authorities at a provincial level and the result is critical in determining student admission into undergraduate programs in universities in China.
As of June 30, 2021, for continuing operations, the company’s affiliated schools offered approximately 392 courses. These courses include 14 compulsory courses, and a total of 377 elective courses in the company’s affiliated schools. The compulsory courses are guided by detailed and demanding government standards that specify what students should know and be able to do at the end of each school year. As for the course materials for the company’s basic educational program, it primarily uses materials designated by the governmental authorities while complementing materials designed by its teachers based on their research and experience. The company’s elective courses are designed to develop the students’ interests, strength and comprehensive ability. Students can choose courses freely, such as career planning, baking, photography. The company also offers characterized sports training services, including swimming, NBA Academy, fencing and shooting to enhance students’ physical health, and after-school courses based on its students’ interest and demand, such as workshops for science competitions in middle school, promotion classes for building a solid foundation in high school, etc. Among these elective courses, the company has some school-based courses, which are based on the compulsory curriculum, and actively expands the courses that combine its characteristics, such as the Olympiad Competition courses, inventor courses, Chinese traditional culture courses.
In addition, the company offers an art educational program under its basic educational education. The curricula for the art educational program are composed of compulsory courses required by the PRC regulatory authorities and a variety of art courses. Students enrolled in the art educational program generally prepare for and take Gaokao, Art Joint Examination and/or Art school-level examination. Apart from being able to apply for art universities, students in the art education program can also apply for a comprehensive university majoring in art.
The company’s art educational program consists of art, music and media courses, with a variety of featured modules. For instance, art courses consist of sketch, watercolor painting, and other elective courses, such as art appreciation, calligraphy, and sculpture; music courses consist of singing, listening, vocal music, instrumental music, and other elective courses, such as music theory and music appreciation. Media courses consist of physique, performance, and other elective courses, such as broadcasting and hosting. In addition, the company offers a selection of specialized public courses to the entire student body to fully satisfy the diversified talent development, such as social morality, art literacy, and elegant life courses. The art education program offers students a turnkey development platform in art, music, media, dance, performance, and drama, which integrates art and culture education.
International Program
In addition to the basic educational program offered by the company’s affiliated schools, students enrolled in its affiliated schools can also elect to be placed into its international program which is geared towards students who wish to study abroad. As most of the students in its international program plan to study abroad after they graduate from its high school programs, the company has designed its international program to specifically address the needs of these students in terms of both language and academics. In the company’s high schools, it offers A-level courses, VCE courses, AP courses and Canadian high school courses. In addition, the company obtained IB DP authorization in May 2021, and became a member of global IB school. PRC students in the company’s international program could also take courses required by the PRC regulatory authority and earn a PRC school diploma. Students can acquire the PRC graduation certificate after passing a graduation test upon completion of basic modules, and at the same time learn foreign languages to be better prepared for education abroad. For example, the company provides IELTS, TOEFL training courses, and other foreign language courses, including Korean, Japanese, and Spanish. Students who want to study in Japan, Korea, and Spain can take other foreign language tests instead of English in Gaokao and acquire an international certificate.
In addition to preparing Chinese students for studying abroad, the company offers the HSK (Hanyu Shuiping Kaoshi) program for its foreign students to learn Chinese at its schools. The company’s HSK program offers a variety of academic and non-academic subjects featuring Chinese culture, such as Chinese History, Chinese Geography, Martial Arts and Chinese Painting and Calligraphy, with varied optional modules, including guitar, piano, dance, handwork, ceramics, badminton, football and basketball. In addition, the company provides students with activities to practice the Chinese language and short trips each academic year. The company has accumulated more than ten years of teaching experience in its HSK program. All of the company’s Chinese teachers have acquired the International Chinese Teacher Qualification Certificate issued by Education Commission of the PRC. In November 2019, Zhuji Hailiang Foreign Language High became an HSK test center certified by Hanban of China, also known as the Office of Chinese Language Council International, originally called the China National Office for Teaching Chinese as a Foreign Language, established in 1987.
In January 2020, Zhuji Hailiang Foreign Language High started operating the International Student College, which was formally established and developed from the original HSK program into a separate college for international students. In the 2020 school year, in order to teach the company’s students in accordance with their aptitude, the International Students College continued to further accurately plan the curriculum system according to age, learning ability, and cognitive ability of the students. As of June 30, 2021, the number of students enrolled in the International Students Institute has reached 107.
Students
Student Recruitment and Admission
The company’s target students are from families with medium to high levels of household income, as well as students who want to study abroad after graduating from its schools. The company’s schools and programs are publicized through social media, teachers and educational staff’s promotion and parents’ recommendations. As of June 30, 2021, for the company’s continuing operations, it had 6,023 students from Zhejiang province and 4,379 students from other regions in China. The company also has 32 foreign students from 9 foreign countries.
The company requires applicants to its high schools to meet certain minimum scores on the Zhongkao to ensure they have the necessary academic ability to succeed. In addition to academic requirements, the admission and entrance standards of the company’s schools are designed to identify those students who have strong desire to learn, passion for their areas of interest and ability to contribute to a positive classroom dynamic. In addition, the company launched a ‘Creative Talent’ project in December 2017 to recruit exceptional middle and high school students in China. In July 2018, the company also launched The Belt and Road International Talents Program to increase its efforts to recruit outstanding talents from disadvantage communities from countries along the Belt and Road to study in China. In August 2020, the company established the Hailiang Top-notch Talent Training Academy, featuring the cultivation of five discipline competitions and adhering to the training concept of discovering talents and diversified cultivation, and providing comprehensive training programs for talented students with expertise across the country, to help participating students seeking admission to prestigious universities.
Academic Performance and Educational Results
The company routinely monitors students’ progress in its affiliated schools according to academic standards. The company sets its standards and instructional programs based on international, national and local standards published by the regulatory authorities. The company’s students are well prepared for international tests, such as A-level and VCE, and national and provincial tests, such as Gaokao and Zhongkao. The company requires its teachers to regularly evaluate their students and set specific goals for them. The company’s students take all standardized tests required by international, provincial and local authorities, and it also administrates/manages its own annual tests calibrated to its academic standards. The company’s students have achieved outstanding academic performance, as measured by these external assessments. For example, over 97.0% of the company’s students from its affiliated schools in the 2022 graduate classes passed the Joint Graduation Exam, an annual provincial test administered to each graduating class.
For the 2020/2021 Gaokao, 2,458 students from the company’s affiliated schools surpassed admission cut-off of universities and colleges, and 212 students were admitted into dual first-class universities, among which, eight students were admitted to Peking University and Tsinghua University, and 17 students were admitted to top-tier domestic universities, such as Shanghai Jiao Tong University through the 2021 strengthening basic disciplines plan and the trinity system, and four students of grade two in high school were admitted into the Innovation Experimental Class of the Junior Class of the University of Science and Technology of China with strict selection and excellent college entrance examination results in the Gaokao. Furthermore, the company’s students from Zhejiang Zhuji Hailiang High School of one received the admission of the Central Academy of Drama, and others also received admissions from Xiamen University, Chongqing University and other first-class universities.
In the 2021 graduating classes of the company’s international program from its affiliated schools, 323 students applied for overseas universities, among which 261 students have received offers, 40% of these students received offers from global top 100 universities, such as University College London and University of Edinburgh. For Hailiang Foreign Languages School, 87% of the graduates received offers from global top 100 universities, 60% of these students were admitted to global top 30 universities, and 7% were admitted to global top 10 universities. It is worth mentioning that 100% of students in the 2021 graduating class of the company’s A-level courses in Hailiang Foreign Languages School have been admitted to global top 100 universities. These universities include University College London, The University of Edinburgh, The University of Melbourne, or The University of Manchester, among others. In addition, students in the company’s HSK program achieved outstanding academic performance. They received admission notices from top domestic universities, such as Peking University, Fudan University, Shanghai Jiao Tong University, Renmin University of China, Zhejiang University, Nanjing University, and Tongji University. This is the second time the company’s students were admitted to Peking University and Renmin University of China since this program was founded. The company’s middle schools, which provides compulsory education from grade 7 to 9, have always been one of the popular choices for local parents.
Student Retention
The company’s teachers provide advice and assistance to students on academic and personal matters, and provide additional practice materials and guidance to students with academic difficulties and to maximize student retention.
Teachers
The company’s affiliated schools seek to hire teachers and educational staff that hold the required academic credentials, are dedicated and active professionals in their field, and are committed to improving their students’ academic performance. As of June 30, 2021, for the company’s continuing operations, the number of its teachers and educational staff in its affiliated schools reached 948, and approximately 16.1% of its teachers and educational staff hold a master’s degrees or above.
The company has built a team of experienced teachers with an average of over five years of educational experience for its affiliated schools. The company also requires teachers in its affiliated schools to possess the qualifications required by PRC regulatory authorities. As of June 30, 2021, for the company’s continuing operations, 6 of its teachers and educational staff were recognized as Exceptional Teachers, a national award given by the Ministry of Education of the People’s Republic of China (MOE) to teachers who have made significant contributions to their schools and profession. As of June 30, 2021, for the company’s continuing operations, its team of teachers and educational staff in its affiliated schools consists of 85 senior teachers, 215 mid-level teachers and 384 junior teachers.
Services Provided to Managed Schools
As of June 30, 2021, the company provided various services to 27 managed schools, with an aggregate of approximately 43,897 students. For the fiscal year ended June 30, 2021, operation and management services the company provided to its managed schools, including but not limited to branding, academic management, basic and international education resources, school culture, admission, finance, human resources, procurement, IT, internal audit, property and logistics management services. Due to the promulgation of 2021 Implementation Rules for Private Education Laws, commencing with fiscal year 2022, the company has ceased providing operation and management services to its managed schools sponsored by related parties, i.e., Xiantao No.1 Middle School and Nanrui Experimental School in order to comply with relevant laws and regulations.
Ancillary Educational Services
The company also provides ancillary educational services, including well-rounded education services and academic subject tutoring services, study trip services and overseas study consulting services, with the objective of improving the learning experience and advancing academic outcomes for students enrolled in both its affiliated and managed schools.
Well-rounded Education Services and Academic Subject Tutoring Services
With the aim of offering quality education services both on- and after-class, the company provides well-rounded education services and academic subject tutoring services in China. Well-rounded education services provide the company’s students with one-stop education solutions, such as after-school care and the promotion and expansion of students’ overall quality. In addition, the company has set up international headquarters in Singapore, facing Southeast Asia, Europe and countries along the Belt and Road, expecting to integrate Chinese and international education resources to expand its footprints overseas through mergers and acquisitions and endogenous growth. For the 2020/2021 school year, the company had provided well-rounded education services and academic subject tutoring services to 131,832 student attendances. On October 9, 2021, the company spined off academic subject tutoring business by selling 100% of the equity interest of Hailiang Mingyou Future (Zhejiang) Education Technology Co., Ltd., due to the promulgation of The Opinion on Further Easing the Workload and Burden of After-school Tutoring for Students in Compulsory Education.
Overseas Study Consulting Services
Overseas study consulting services focus on providing a full range of guidance services for the company’s students. It aims to provide high school students with consulting and planning services for applying to enter the universities, including services, such as, pre-planning, admission and visa application, and overseas placement. The company also provides one-to-one personalized overseas study consulting services, including background evaluation, studying abroad plan customization, professional assessment, background improvement, application and other services, so as to help high school graduates to apply for admission to global universities. For the 2020/2021 school year, the company provided overseas study consulting services to 1,412 students.
During the spread of the COVID-19 pandemic, the company’s overseas study consulting business segments have deployed multiple channels for further studies. For example, the company successfully introduced Sino-foreign cooperative education programs that have been approved by national MOE from well-known domestic universities, such as Xi’an Jiaotong-Liverpool University 4+0 program, University of Shanghai for Science and Technology Sino-British International College 4+0 program, Jimei University and U.S. Cook University 4+0 program, etc. By introducing these Sino-foreign cooperative education programs, the company provides its students with alternatives to study abroad during the pandemic.
Study Trip Services
The company’s study trip business segment strives to create holistic education courses and high-quality study trip activities by focusing on study trips and camping. Relying on the company’s international campsites and collaborations with diverse universities and colleges, it operates its study trip programs in more than 30 countries, such as the U.K., the U.S. and Australia, and several provinces in China. The company offers its students the opportunities to visit reputable foreign universities and experience local culture. As of June 30, 2021, the company had provided more than 200 study trips and camp programs, operated domestically and globally, to its students. For the 2020/2021 school year, 46,991 student attendances have participated in study trips and camp education. The company carries out brand promotions, government linkage and other activities to comprehensively enhance the competitiveness of its study trip brand and the popularity of these camp brands.
Hailiang Education Park
Hailiang Education Investment Group Co., Ltd. (Hailiang Investment) has completed the construction of the Hailiang Education Park, which has a total site area of approximately 850,000 square meters (9,149,323.85 square feet) and a floor area of approximately 550,000 square meters (5,920,150.73 square feet). Hailiang Education Park commenced operation in September 2015, and over 11,000 students and 900 teachers began classes on the new campus at the start of the school year on September 7, 2015. In September 2015, Zhejiang Zhuji Hailiang Foreign Language School and selected programs from Zhejiang Zhuji Tianma Experimental School and Zhejiang Zhuji Hailiang Experimental High School relocated to the Hailiang Education Park. Zhejiang Zhuji Tianma Experimental School’s, and Zhejiang Zhuji Hailiang Experimental High School’s, remaining programs continue to operate on their existing respective campuses.
As of June 30, 2021, for the company’s continuing operations, its affiliated schools and subsidiaries operating in Hailiang Education Park were Zhejiang Zhuji Hailiang Senior Middle School; Zhuji Hailiang Foreign Language High School Co., Ltd. (Zhuji Hailiang Foreign Language High); Zhuji Hailiang After-school Service Co., Ltd. (Hailiang After-School); Zhuji Hailiang Logistics Service Co., Ltd. (Zhuji Hailiang Logistics); Ningbo Hailiang Sports Development Co., Ltd. (Hailiang Sports); Zhuji Nianxin Lake Hotel Co. Ltd. (Zhuji Nianxin Lake Hotel); and Zhejiang Hailiang Mingxin Education Technology Co., Ltd. (Hailiang Mingxin).
Hailiang Education Park has six educational buildings, one administrative building, six dining halls, six track fields, one landmark tower, one school hospital, 20 student dormitory buildings and 10 dormitory buildings for teachers and staff. In addition, there is a multi-function sports center with basketball courts, an indoor swimming pool, a student activity center, and a hotel that not only provides convenience for students and parents, but also operates publicly. Hailiang Education Park is designed to accommodate a maximum of 12,000 students and 2,000 teachers. The school facility contains a number of modern and distinctive buildings, such as the main administration and educational building, the landmark tower, and the new kindergarten department building with a distinctive trumpet shell-shaped architectural design. In September 2018, a license plate identification and facial recognition system was installed and activated on the three main gates of Hailiang Education Park in order to improve security. In June 2020, the company fully launched the safety management system to trace the results of safety checking and follow-up solutions. In June 2020, the school-bus line system was launched to optimize the shuttle route and upgrade the shuttle mode. In December 2020, the company launched the emergency command center, which aims to establish an intelligent command system that integrates emergency handling, real-time monitoring of hidden danger areas, and multi-point synchronization inspections, and becomes the nerve center for the overall coordination and command of the safety management of schools in various places.
On April 28, 2019, the company entered into eight new lease agreements with Hailiang Investment regarding Hailiang Education Park, in order to allocate lease fees to the respective schools and subsidiaries according to their used gross floor area.
Growth Strategies
The key elements of the company’s strategy are to focus on the asset-light model, continue to expedite the expansion of its school network, especially its managed schools, through providing operation and management services to public and private schools in rural areas; continue to invest resources to attract, cultivate and retain teaching and management talents, utilizing its Invigorating Education with Talents strategy; continue to invest in the application of educational science and technology to support the rapid and high-quality asset-light expansion utilizing its Revitalizing Education through Technology strategy; diversify business model, and increase the proportion of ancillary educational services; and steady promotion of its international expansion efforts, to build a global education group.
Intellectual Property
The company has registered 17 domain names with the China Internet Network Information Center, such as www.hailiangedu.com, or en.hailiangedu.com. The company has registered the Hailiang Education trademark in the PRC.
Regulations
The company operates its business in China under a legal regime consisting of the National People’s Congress, which is the country’s highest legislative body, the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority, including the MOE, the Ministry of Information Industry, State Administration for Industry and Commerce of PRC (SAIC), the Ministry of Civil Affairs (MCA) and their respective local offices.
History
Hailiang Education Group Inc. was founded in 1995.
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