Core Viewpoint - Beijing Haixue Education Technology Co., Ltd. (Haixue) has submitted an IPO application to the Hong Kong Stock Exchange, aiming to raise funds for AI research, business expansion, and acquisitions despite ongoing losses and increasing refund rates [2][6]. Financial Performance - Haixue reported revenues of 400 million yuan, 472 million yuan, 511 million yuan, and 232 million yuan for the years 2022, 2023, 2024, and the first half of 2025, respectively [3] - The net losses for the same periods were 186 million yuan, 175 million yuan, 90.7 million yuan, and 158 million yuan, with gross margins of 78.6%, 81.1%, 81.6%, and 85.8% [3] - The first half of 2025 saw a 125.7% year-on-year increase in losses, surpassing the total net loss for 2024, while revenue decreased by 5.3% year-on-year [3] Customer Acquisition and Retention - Haixue's customer acquisition costs increased, with figures of 414.8 yuan, 301.6 yuan, 428.7 yuan, and 441.2 yuan during the reporting periods [3] - The number of paid users fluctuated, with 687,400, 1,045,600, 770,400, and 333,100 users in the respective years [4] - Refund rates rose significantly, reaching 9.1%, 9.9%, 10.5%, and 15.9% during the reporting periods, indicating challenges in customer retention [4][5] Business Structure and Market Position - Haixue's revenue is heavily reliant on construction-related courses, which accounted for 68.2%, 61.5%, 59.3%, and 59.8% of total revenue during the reporting periods [6] - The company is attempting to diversify into new fields such as finance, law, and healthcare, but acknowledges that returns from these new ventures may initially be lower than from existing offerings [6] AI Technology Initiatives - In 2025, Haixue established an independent AI innovation team to develop AI applications for educational support, teaching assistance, and marketing [7] - R&D expenditures were significantly lower than marketing costs, with figures of 24.5 million yuan, 20 million yuan, 23.7 million yuan, and 9.2 million yuan during the reporting periods [7] - The company is facing negative operating cash flow, with a reported negative cash flow of 1.5 million yuan in the first half of 2025, raising concerns about its ability to sustain operations without additional financing [7]

Core Insights - The Hong Kong IPO market remains active, with total fundraising reaching HKD 182.9 billion in the first three quarters of 2025, a significant increase of approximately 230% compared to the same period in 2024, and the number of IPOs rising by about 50% to 67 [1] - The company, HiLearn Education Technology Co., Ltd. (嗨学网), has submitted its listing application to the Hong Kong Stock Exchange, marking another significant IPO case in the vocational education sector [1] Company Overview - HiLearn is the fourth largest online vocational training service provider in China, having served 4.3 million paid learners [2] - The company operates under three main brands: "HiLearn," "Jingjin," and "Shupeitong," covering various vocational fields such as construction, emergency safety, finance, law, and healthcare [2] - Despite steady revenue growth, the company remains in a loss-making position, with revenues of RMB 400 million, RMB 472 million, and RMB 511 million from 2022 to 2024, and a loss of RMB 1.58 billion in the first half of 2025 [2] Financial Performance - The company's gross margin has shown a steady improvement, increasing from 78.6% in 2022 to 85.8% in the first half of 2025, indicating operational efficiency and content optimization [2] - The revenue structure is heavily reliant on consumer services, with 98.2% of revenue coming from individual users in the first half of 2025 [4] - The company has served over 130 enterprises and institutions but generated only RMB 4.12 million from its enterprise service brand "Shupeitong," indicating a need for growth in the B2B segment [4] Product and Service Offerings - HiLearn offers two main product categories: "HiLearn Classroom" for recorded and live courses, and "Jingjin Classroom" focused on efficient exam preparation with personalized learning plans [3] - The company has made strides in AI applications, launching over 30 AI smart agents to enhance learning and teaching processes, with significant user engagement reported [6] Market Trends and Opportunities - The vocational education sector is experiencing growth due to government policies aimed at improving quality and expanding access, with vocational undergraduate enrollment increasing from 41,400 in 2021 to nearly 500,000 in 2025 [8] - The demand for skilled talent is projected to grow, with a predicted talent gap of 30 million in key manufacturing sectors by 2025 [8] Competitive Landscape - HiLearn ranks fourth in China's online vocational training market and holds the top position in construction vocational training [10] - The company’s revenue structure is still heavily dependent on construction-related qualification courses, which accounted for around 60% of revenue from 2022 to the first half of 2025 [10] - The company faces challenges in diversifying its course offerings and expanding into non-construction fields to ensure sustainable growth [10]