1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Thesis
3. Valuation & Price Target
4. Business & Product Moat
5. People & Governance
6. Market & Macro
7. Financial Quality
8. Risk Register
9. Prediction Market
10. 𝕏 Posts
Discussion
1. Investment Snapshot
2. Valuation
Discussion
Symbol
YQ
Event Date
2020-12-04
IPO Date (Actual)
2020-12-02
Sector
Consumer
Subsector
Diversified Consumer Services
Offer Range
$10.50-$10.50
Shares Offered
27.4M
$863.5M
Implied Upside vs Midpoint
Description
Why the Name “17” (which sounds similar to “Together” in Chinese)? Because it takes a village to educate a child. We believe teachers, students and parents working together, with schools at the core, can unlock students’ full academic potential. Because we also believe that through technology, we can bring together K-12 in-school education and after-school supplementary education to create a more efficient, effective and engaging personalized education experience for teachers, students and parents. We are a leading education technology company in China with an “in-school + after-school” integrated model. Our smart in-school classroom solution delivers data-driven teaching, learning and assessment products to teachers, students and parents across over 70,000 K-12 schools, with the number of average MAUs of our products exceeding that of the next four top players combined in the first half of 2020, making us the clear market leader in China according to the Frost & Sullivan Report. In particular, we covered approximately 56% of the primary schools, 60% of the middle schools and 7% of the high schools using smart in-school classroom solutions in China in the first half of 2020, according to the Frost & Sullivan Report. Leveraging our in-school leadership, we offer online K-12 large-class after-school tutoring services that complement students’ in-school learning. We rapidly became a top five online K-12 large-class after-school tutoring service provider in China in terms of both paid course enrollments and gross billings in 2019 and the first half of 2020, according to the Frost & Sullivan Report. Powered by our integrated model and technology, our online K-12 large-class after-school tutoring courses stand out in terms of our unique approach to personalization realized through our data-driven understanding of individual students’ in-school performance, as well as our district-level localized insights. In 2018, 2019 and the nine months ended September 30, 2020, net revenues from our online K-12 tutoring services represented 30.2%, 88.5% and 93.0% of our total net revenues, respectively. The core functions of our in-school products are free of charge for teachers, students and parents to use. --- In-School At our founding, we believed that delivering truly effective education in China requires a focus on the in-school learning that is core to the K-12 school system, and as such, we strategically began building our smart in-school classroom solution, including homework and academic assessment products, for K-12 schools in 2012 to empower in-school learning. Over the past eight years, we have significantly expanded the product portfolio within our smart in-school classroom solution to encompass class preparation and delivery, homework-related activities and academic assessment, delivering significant efficiency improvements to teachers, students and parents in all of their key daily educational activities and enabling them to engage in ways that would be impossible using traditional offline methods. The core functions of our in-school products are free of charge for teachers, students and parents to use. Our massive and proprietary content library features localized homework assignments, academic assessments and teaching and learning materials that closely track the local curriculum and educational objectives at schools across the country. In particular, our content library currently has a deep reserve of high-quality written and multimedia educational resources, including over 18 million homework questions, assessment sets, supplementary teaching and learning guides, self-directed learning videos, in-class teaching content kits and digital picture books that have been accurately tagged to meet educational needs under all major K-12 academic subjects and textbook versions. The widespread adoption of our smart in-school classroom solution and the high quality of our educational content offerings, as well as their daily integration into the in-school learning environment, have solidified our brand recognition and enabled us to win enduring trust from all stakeholders—teachers, students and parents. The high-frequency interactions we have across our products and our unique access to a large amount of mission-critical learning data also give us deep insight across all of our user groups. As of September 30, 2020, we had serviced over 0.9 million verified teacher users, 54.3 million verified student users and 45.2 million registered parent users on a cumulative basis. Our smart in-school classroom solution was used at over 70,000 K-12 schools in 360 cities across all provincial-level regions in mainland China in the nine months ended September 30, 2020. To put this into context, there were over 226,000 K-12 schools in mainland China, with 178.0 million students as of December 31, 2019, according to the Frost & Sullivan Report. For teachers. We believe school teachers are the pillars of the education system. We provide teachers with comprehensive educational content that we have fine-tuned over the past eight years, as well as a range of powerful tools that allow them to more efficiently execute their daily activities, freeing them to concentrate on improving the quality of their teaching. With our products, teachers can easily track student performance during the semester and throughout different grades, empowering them to offer a significantly higher level of personalization and elicit better results from students. For students. Our ultimate goal is to improve learning efficiency and outcomes for students across China. Our products enable students to engage with a massive, proprietary library of localized learning content, access and complete their assignments online, and receive personalized feedback based on issues identified in their homework and assessments. All of these activities and related in-school data are captured in a digital academic profile. For parents. We offer parents an effective, user-friendly way to monitor the academic performance and progress of their children. We also provide parents with up-to-date analysis on areas where their children face challenges, as well as individualized study plans designed to tackle these areas of academic weakness, enabling them to take a more active role in the learning process. After-School To help students overcome their individual academic weaknesses, we started to offer online K-12 after-school tutoring courses in a large-class dual-teacher format in 2017, providing them an after-school learning experience that is closely integrated with their in-school education. Our online after-school tutoring courses cover the major subject matters of China’s K-12 education. We leverage our profound insights into student academic performance in school to design our online after-school tutoring courses. In addition, our significant presence in K-12 schools across China allows us to align our after-school tutoring content and learning modules with local curriculum and assessment objectives. Moreover, the trusted relationships we have developed with teachers, students and parents provide us with a large and familiar pool of prospective tutoring customers, as well as a community of supporters that provide organic word-of-mouth referrals. We rapidly became a top five online K-12 large-class after-school tutoring service provider in China in terms of both paid course enrollments and gross billings in 2019 and the first half of 2020, according to the Frost & Sullivan Report. In addition, in 2019 and the first half of 2020, we had one of the highest primary school student enrollment contribution rates among the leading online K-12 large-class after-school tutoring service providers, according to the Frost & Sullivan Report. In 2019, 70.6%, 28.1% and 1.3% of our paid course enrollments were from primary school, middle school and high school students, respectively. For the nine months ended September 30, 2020, 67.2%, 30.1% and 2.7% of our paid course enrollments were from primary school, middle school and high school students, respectively. --- Our principal executive offices are located at 16/F, Block B, Wangjing Greenland Center, Chaoyang District, Beijing 100102, People’s Republic of China. Our telephone number at this address is +86 (10) 5945-1082. Our registered office in the Cayman Islands is located at the offices of Maples Corporate Services Limited, P.O. Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our main website is www.17zuoye.com. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, NY 10168.
17 Education & Technology Group Inc. annual income statement and balance sheet, FY 2021 to FY 2025, as reported in SEC filings (CNY).
| Metric | FY 2021 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Revenue | CNY 2.2B | CNY 171M | CNY 189M | CNY 106M |
| Gross profit | CNY 1.3B | CNY 80.7M | CNY 69.2M | CNY 50.6M |
| Operating income | (CNY 1.5B) | (CNY 343M) | (CNY 214M) | (CNY 164M) |
| Net income | (CNY 1.4B) | (CNY 312M) | (CNY 193M) | (CNY 154M) |
| Metric | FY 2021 | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|---|
| Total assets | CNY 1.6B | — | CNY 550M | CNY 591M |
| Total liabilities | CNY 783M | — | CNY 156M | CNY 304M |
| Total equity | CNY 797M | CNY 494M | CNY 394M | CNY 287M |
| Cash & equivalents | CNY 1.2B | CNY 307M | CNY 234M | CNY 246M |