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By M. Marin
Pending transaction expected to expand target market…
Elite Education Group (NASDAQ:EEIQ) has launched a strategic growth initiative to enhance its long-term expansion plans. The company has entered into a non-binding letter of intent with a U.S. company that focuses on career-training education, Ameri-Can Education Group Corp.
If the transaction is consummated, Elite would expand its offerings with complementary educational services in the career-training space. By having a broader set of academic options to offer students, the company also expects to expand its target markets.
Elite also believes that having a broader product and services offering such as those Ameri-Can suite of offerings would facilitate its ability to enter Southeast Asian markets and attract students from new countries, as well as from China.
…And is aligned with regulator goals, management believes
Chinese regulatory authorities have recently made several changes to China’s afterschool tutoring industry. Elite does not operate in that sector and focuses on students interested in pursuing study abroad. The company also believes that its service offerings, including potentially the Ameri-Can offerings, are aligned with China's regulatory goals.
While Chinese regulators have recently tightened regulations around the private afterschool education industry, the company believes that the new regulatory directives underscore the value of its service offerings and the differences between the services it provides and those offered by the afterschool education sector.
Positive takeaways from improving application & enrollment metrics
In 2020 and 1H21, enrollments were hurt by the pandemic. Enrollments have picked up, despite the ongoing challenges related to the pandemic. As of September 30, 2021, EEIQ had 136 students who had been admitted to the English Language Program at the MU regional campuses compared to 134 students for the same period in 2020. The conversion rate of students who applied and subsequently enrolled was 36.4% compared to 25.7%.
Elite operates on MU Regional Campuses
Separately, Elite recently announced that its agreement with the Oxford campus of MU had been terminated. Elite operates on other of Miami University’s campuses, Middletown and Hamilton, and the relationship with other MU regional campuses has not been impacted, according to management. Moreover, Elite anticipates that the impact on its operating results will be minimal.
The company believes that by providing an end-to-end solution for students seeking to study abroad, the company makes it possible for Chinese students who might not otherwise pursue international study to do so. These solutions include language training to help students improve English language proficiency, preparatory services to help with the application process to gain admission to its partnered university, as well as a full range of solutions while students are at the destination university. Elite aims to be a one-stop solution to make it easier for candidates to prepare for and apply for international study and then complete study abroad.
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