Mengly J. Quach Education, a leading private school center across Cambodia, is planning to go public on the Cambodia Securities Exchange (CSX) to raise funds for its rapid expansion plans. The company plans to release 19,607,000 shares seeking regulatory approval at a price range of $0.40 to $0.60 per share, with a guaranteed dividend of 6% to IPO investors for two years. This move is aimed at providing the public with an opportunity to participate in the development of the education sector in Cambodia.
The company plans to seek regulatory approval in March 2023, with an official public listing planned for May 2023. According to RHB Securities CEO Iv Ranarith, the company’s plans to go public represent a fantastic opportunity for the public to participate in the development of Cambodia’s education sector. The proposed pre-allotment share price values the company at between $133.48 million and $200.22 million and raising between $7.84 million and $11.76 million.
Opportunity for mum and dad investors
“Through this public listing, we are excited to provide an opportunity for individual investors to be a part of the growth story of Mengly J. Quach Education, while also contributing to the development of Cambodia’s education sector. With a guaranteed dividend of 6% to IPO investors for the first two years, this is a unique opportunity for mum and dad investors seeking to invest in a company with a strong business model and proven track record of growth,” Iv Ranarith told Cambodia Investment Review.
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The company expects the funds raised from the IPO to assist with its expansion plans, which include doubling its revenue from $25.3 million in 2022 to $47.9 million in 2025, as well as doubling its EBITDA from $8.6 million to $16.3 million over the same period. This revenue growth is projected to be driven by a rapid increase in student enrollments from 19,400 to 35,100, and campus expansions from 15 to 33 across Cambodia in the next three years.
The Mengly J. Quach Education’s business model is aimed at providing affordable quality education with lower middle-tier school fees ranging from $1,500 to $2,200. The company’s growth prospects are underpinned by the growing middle and upper middle-class population resulting from Cambodia’s sustained economic growth in the past two decades, coupled with a strong demand for quality education and services for preschool and kindergarten.
Additionally, the demand for foreign languages such as English and Chinese in the country’s open and foreign investment-driven economy presents a great opportunity for private education providers.
Ambitious expansion plans for the company
“Although we view the planned public listing of Mengly J. Quach Education as an exciting opportunity for investors to invest in the future of Cambodia’s education sector, we are concerned about the proposed price band. We actually have confidence in their ability to execute on their expansion plans, but even if they get them 100% right over the next 3 years, it would still look very, very over-valued. We will be monitoring the progress of the IPO and remain hopeful that the final listing price will be more attractive to investors,” Stephen Higgins Founder of investment and consultancy firm Mekong Strategic Capital told Cambodia Investment Review.
Although Cambodia’s private education industry is largely fragmented and served by many players, only a few of them have upwards of a few thousand enrolments and multiple campuses. Currently, there are 776 private schools providing general education in Phnom Penh, with many small single-location schools serving their immediate neighborhood.
Launched in 2005 by Neak Oknha Mengly J. Quach the school is known as a unique education system for its superior quality, discipline and services. It is remarkably consistent with the use of high-quality learning programs to make a difference for our young generations.