F-1/A 1 ff12021a1_jianzhiedugrp.htm REGISTRATION STATEMENT

As filed with the Securities and Exchange Commission on July 23, 2021

Registration No. 333-257865

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

___________________

AMENDMENT NO. 1
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

___________________

Jianzhi Education Technology Group Company Limited
(Exact name of Registrant as specified in its charter)

___________________

Not Applicable
(Translation of Registrant’s name into English)

___________________

Cayman Islands

 

8220

 

Not Applicable

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

27/F, Tower A, Yingdu Building, Zhichun Road
Haidian District, Beijing 100086
People’s Republic of China
+86 10 58732560
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

___________________

Cogency Global Inc.
122 East 42
nd Street, 18th Floor
New York, NY 10168
(800) 221
-0102

___________________

Copies to:

David T. Zhang, Esq.
Kirkland & Ellis International LLP
c/o 26
th Floor, Gloucester Tower
The Landmark
15 Queen’s Road Central,
Hong Kong
+852
-3761-3318

 

Steve Lin, Esq.
Kirkland & Ellis International LLP
29
th Floor, China World Office 2
No. 1 Jian Guo Men Wai Avenue
Chaoyang District, Beijing 100004
People’s Republic of China
+86 10
-5737-9315

 

Meng Ding, Esq.
Sidley Austin LLP
39/F, Two International Finance 
Centre, 8 Finance Street, Central, 
Hong Kong 
+852
-2509-7888 

___________________

Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

         

Emerging growth company

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

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CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered

 

Proposed
maximum
aggregate
offering
price(2)(3)

 

Amount of
registration
fee

Ordinary shares, par value US$0.0001 per share(1)(2)

 

US$50,000,000

 

US$5,455

____________

(1)      American depositary shares issuable upon deposit of the ordinary shares registered hereby will be registered under a separate registration statement on Form F-6 (Registration No. 333-            ). Each American depositary share represents            ordinary shares.

(2)      Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public, and also includes ordinary shares that are issuable upon the exercise of the underwriters’ option to purchase additional ADSs. These ordinary shares are not being registered for the purpose of sales outside the United States.

(3)      Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(o) under the Securities Act of 1933.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

  

 

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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

PRELIMINARY PROSPECTUS (Subject to Completion)

Dated           , 2021

American Depositary Shares

Jianzhi Education Technology Group Company Limited

Representing              Ordinary Shares

___________________

This is an initial public offering of American depositary shares, or ADSs, representing ordinary shares of Jianzhi Education Technology Group Company Limited. We are offering a total of              ADSs. Each ADS represents              of our ordinary shares, par value US$0.0001 per share. The underwriters may also purchase up to              ADSs within 30 days from the date of this prospectus.

Prior to this offering, there has been no public market for the ADSs or our ordinary shares. We anticipate the initial public offering price per ADS will be between US$             and US$            . We intend to apply for the listing of the ADSs representing our ordinary shares on the Nasdaq Global Select Market under the symbol “JZ.

Neither the United States Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

_________________

We are an “emerging growth company” under the applicable U.S. federal securities laws and are eligible for reduced public company reporting requirements. See “Risk Factors” beginning on page 16 for factors you should consider before investing in the ADSs.

_________________

PRICE US$              PER ADS

_________________

 

Per ADS

 

Total

Initial public offering price

 

US$

 

US$

Underwriting discounts and commissions(1)

 

US$

 

US$

Proceeds, before expenses, to us

 

US$

 

US$

____________

(1)    For a description of compensation payable to the underwriters, see “Underwriting.”

The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on             , 2021.

________________________________

AMTD

 

Loop Capital Markets

___________________

Prospectus dated             , 2021

 

Table of Contents

 

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TABLE OF CONTENTS

 

Page

Prospectus Summary

 

1

Risk Factors

 

16

Special Note Regarding Forward-Looking Statements and Industry Data

 

55

Use of Proceeds

 

56

Dividend Policy

 

57

Capitalization

 

58

Dilution

 

59

Enforceability of Civil Liabilities

 

61

Corporate History and Structure

 

63

Selected Consolidated Financial Data

 

69

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

72

Industry Overview

 

97

Business

 

104

Regulations

 

121

Management

 

128

Principal Shareholders

 

133

Related Party Transactions

 

135

Description of Share Capital

 

136

Description of American Depositary Shares

 

144

Shares Eligible for Future Sale

 

151

Taxation

 

152

Underwriting

 

158

Expenses Related to This Offering

 

166

Legal Matters

 

167

Experts

 

167

Where You Can Find Additional Information

 

167

Index to Consolidated Financial Statements

 

F-1

Information Not Required in Prospectus

 

II-1

You should rely only on the information contained in this prospectus or in any related free writing prospectus that we have filed with the Securities and Exchange Commission, or the SEC. We have not authorized anyone to provide you with information different from that contained in this prospectus or in any related free writing prospectus. We are offering to sell, and seeking offers to buy the ADSs offered hereby, but only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus is current only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the ADSs.

Neither we nor any of the underwriters has taken any action that would permit a public offering of the ADSs outside the United States or permit the possession or distribution of this prospectus or any filed free writing prospectus outside the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus or any filed free writing prospectus outside the United States.

Until               , 2021 (the 25th day after the date of this prospectus), all dealers that buy, sell or trade ADSs, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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Prospectus Summary

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information, financial statements and related notes appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under “Risk Factors,” “Business,” and information contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before deciding whether to buy the ADSs.

Overview

Since our establishment in 2011, we have been committed to developing educational content to fulfill the massive demand for high-quality, professional development training resources in China.

We started our operations by providing educational content products and IT services to higher education institutions. After our initial growth period, our products and brand have gained increasing recognition and acceptance by both higher education institutions and the general public. We then initiated our end-user business and started providing products to individual customers, and acquired companies in Shanghai and Guangzhou to facilitate our expansion in the end-user market. Today, we are a leading provider of digital educational content in China. According to the Frost & Sullivan Report, we were the seventh largest digital content provider for higher education in China in terms of the revenue derived from providing digital contents for higher education institutions in 2020, with revenues of RMB31.0 million representing a 1.1% market share. Leveraging our deep understanding into and rich experience in professional development training, as well as our strong curriculum development capabilities, we became the largest online career training services provider for higher education institutions in China in terms of revenue in 2020, with RMB31.0 million representing a market share of 65.5%, according to the Frost & Sullivan Report.

Since the beginning of 2019, the PRC Ministry of Education has issued a series of favorable policies to encourage talent development, aiming to consolidate high-quality online education resources, emphasize construction of innovative, comprehensive, and application-oriented curricula, and carry out extensive training in employability skills and employment and entrepreneurship training. At the same time, China’s online education market has maintained rapid growth in recent years. Moreover, with the impact of the COVID-19 pandemic in 2020, the Ministry of Education has promulgated policies to clearly encourage schools and educational institutions at various levels to conduct online teaching, which further promoted digital education and rapidly increased the penetration rate of online education. As such, the migration from offline education to online education has become a clear trend in China’s education industry. We have seized these market opportunities and established long-term and strategic business relationships with China’s leading telecommunications operators. We have leveraged our advantages in vocational education and successfully established a synergistic and dynamic business system with educational content services as our backbone.

Leveraging our strong capabilities in developing proprietary professional development training content and success in consolidating educational content resources within the industry, we have successfully built up a comprehensive, multi-dimensional digital educational content database. As of March 31, 2021, our educational content library consisted of more than 25,000 online videos and video courses totaling approximately 4,500 hours, of which more than 70.0% were self-developed. Our educational content database offers a wide range of professional development products, including employability skills and entrepreneurship guidance courses, professional skills training courses, skill improvement courses and professional certification quiz banks. We embed our proprietary digital education content into our self-developed online learning platforms, which are provided to a wide range of customers through our omni-channel sales system.

We offer our products and services under two primary business models:

•        B2B2C Model

•        We sell subscriptions to our proprietary online learning platforms, such as Sentu Academy, to higher education institutions and other academic institutions. We charge these institutional customers an upfront annual service fee. These subscriptions allow institutions to grant their students access to our digital educational content database through their respective local campus networks free of charge. As of March 31, 2021, we offered online learning platform services to approximately 2,000 higher education institutions in China.

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•        We also license to institutional customers, primarily public libraries and video websites, specific content from Sentu Academy chosen by them. These customers pay one-time licensing fees to access content without owning the copyrights, including downloading and storing such content locally. From January 1, 2019 to December 31, 2020, we provided products and services to 3 provincial libraries, 11 city libraries and 1 county library. For the three months ended March 31, 2021, we further developed 2 city libraries as our new library customers.

•        B2C Model

•        We select employability skills and workplace etiquette related content from our educational content database of Sentu Academy, totaling 85.3 hours, and package them as our “Fish Learning” education database. We cooperate with Tianyi Video, a subsidiary of China Telecommunications Corporation, or China Telecom, and make our Fish Learning database available to individual customers through Tianyi Video’s platform. Individual customers can subscribe for monthly access to this content. We share revenue from this arrangement with Tianyi Video by being entitled to receive a percentage of the monthly subscription fee paid by mobile users pursuant to our cooperative agreements with Tianyi Video and based on the settlement bills issued by Tianyi Video.

•        We cooperate with Telefen, a subsidiary of China Telecom, and provide a special mobile video package to China Telecom’s mobile users. Our special mobile video package comprises six products related to artificial intelligence and big data, in total of approximately 22 hours as of March 31, 2021. China Telecom’s mobile users can redeem their reward points for permanent access to the video courses contained in the package.

•        We compiled video content on entrepreneurship, workplace and IT training from Sentu Academy’s education content database into three Light Class products. We cooperate with China United Network Communications Group Company Limited, or China Unicom, to offer such Light Class products to their mobile users. We share revenue from this arrangement with China Unicom by being entitled to receive a percentage of the monthly subscription fee paid by mobile users pursuant to our cooperative agreements with China Unicom and based on the settlement bills issued by China Unicom.

•        We also offer our Light Class products through WeChat. As of March 31, 2021, we have launched 10 products through WeChat, such as Light Class selected courses monthly subscriptions, Light Class workplace VIP monthly subscriptions and Light Class quarterly subscriptions.

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We are also fully committed to the digitalization and informatization of the education sector in China. Since 2015, we have developed a number of software applications to provide our software or customized intelligent solutions tailored to meet the specific needs of educational institutions and other institutional customers. Our major IT solution services included providing (i) design and development of customized IT system service, (ii) procurement and assembling of equipment, and (iii) technological support and maintenance service. We maintain a strong and efficient team for research and development of educational content and software. As of March 31, 2021, our R&D team included 57 employees, and we owned 129 proprietary software copyrights. The software used in providing design and development of customized IT systems mainly include: Sentu Desktop Virtualization Software and Sentu Online Learning Software. For the years ended December 31, 2019 and 2020 and the three months ended March 31, 2021, revenue derived from IT related solution services accounted for 28.9%, 23.6% and 13.0%, respectively, of our total revenue.

We have also been actively exploring new monetization strategies. In 2016, we began to provide mobile media services. Leveraging the huge user base in the education sector that we have accumulated, we provide advertising services to third-party customers by placing advertisements in our mobile applications or including advertisements in our mobile videos. In addition, we help market monthly data plans by China Unicom to their mobile users. We also operate and maintain Wo Reading, a WeChat subscription account of China Unicom.

Our revenue grew from RMB358.8 million in 2019 to RM404.9 million (US$62.0 million) in 2020 and grew from RMB 54.6 million for the three month ended March 31, 2020 to RMB98.4 million (US$15.0 million) for the three months ended March 31, 2021. Our net income grew from RMB83.6 million in 2019 to RMB86.9 million (US$13.3 million) in 2020 and grew from 0.4 million for the three month ended March 31, 2020 to RMB12.3 million (US$1.9 million) for the three months ended March 31, 2021.

Our Industry

Online vocational education refers to online courses provided to students to improve their professional skills in workplace or prepare them for employment or vocation-related exams. Target students of online vocational education are mainly college students, fresh graduates from higher education institutions or working professionals.

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Vocational education is an important component of the education system in China. Higher education institutions have placed increasing emphasis on providing students with practical training and equipping them with practical skills. The academic curricula in the current higher education system in China are comprehensive but less practical, resulting in graduates experiencing difficulties in applying what they have learned at schools into workplaces directly.

Vocational education includes two segments, namely vocational certification education and vocational development education. By taking vocational courses, users seek to obtain and maintain professional certifications or to enhance their workplace skills. The online vocational education market grew from RMB36.9 billion in 2016 to RMB75.3 billion in 2020, at a CAGR of 19.5%, is expected to reach RMB175.9 billion in 2025, representing a CAGR of 18.5% from 2020 to 2025, according to the Frost & Sullivan Report.

Market Trends

Growing penetration rate:    As job-seeking market becomes increasingly competitive, candidates are under pressure to distinguish themselves from others. Therefore, more candidates are expected to participate in vocational education. The better performance of those who have taken the training courses will help attract more participants to take part in training in the future.

Increasing preparation time:    The difficulty of recruitment and vocational exams forces candidates to devote more efforts to their preparation. With the growing penetration rate of vocational training and education, candidates may find it insufficient to take short courses, and prefer to commit to longer courses to enhance their performance in exams. Increasing preparation time leads to higher spending on the vocational education.

Fierce competition:    The number of graduates from higher education institutions is growing every year in China, increasing the difficulty of job prospects for all candidates. This fierce competition among peers has driven the growth of vocational education. More candidates are aware of the necessity of taking vocational education and are willing to expend time and money to enhance their performance.

Entry Barriers

Brand Awareness:    The vocational education market has entered the era of brand competition. From the historical development of China’s vocational education market, institutions that maintained sustainable growth are the ones with a good brand image. Branding has become one of the most important competition strategies for vocational education institutions. It takes time to establish a positive brand image in the minds of customers and takes even more time to test the effect of the brand building. As a result, it is difficult for new entrants to set up their own brand with strong competitiveness within a short period.

Teacher Resources:    Against the rapid growth of vocational education market, the demands for high-quality teachers have been increasing while the premium teacher resources are becoming scarce. Leading players in the vocational education sector usually maintain a pool of high-quality teachers and tutors and some of them established their own training system for teachers. New entrants face difficulties of recruiting and retaining a sufficient number of high-quality teachers.

Large-scale Operation:    Labor demands in different industries vary over time and could be subject to seasonality. Many small players can hardly bear the cost of rents and salary of teachers. They may hire part-time teachers, which may lead to the deterioration of education quality and the damage to brand. Large-scale operation can leverage the economy of scale to optimize the cost through different professional training programs.

Capital Requirement:    It is necessary to invest large capital to develop products, cultivate talents, improve brand images and set up branches in cities at all levels for achieving the scale development and maintain a market position. Although individuals are able to offer online courses in specific areas of expertise without significant overhead expenses by leveraging online platforms, individual online education providers only account for a small portion of the online education market and courses offered by online education companies are the main stream in the market. For companies intending to enter the online education market, it would incur significant expenses in daily operation, staff recruitment, educational content research and development, procurement of network bandwidth and sales and marketing. The capital requirement in the vocational education sector could limit the recruitment of high-quality teachers, updates of courses and expansion of market, and become a barrier for new entrants.

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Our Strengths

We believe the following strengths have contributed to our success:

•        Large, diversified and proprietary educational content database;

•        Cutting-edge and practical educational content that meet market demand;

•        Established and integrated omni-channel sales; and

•        Visionary and Experienced Management Team with Years of Devotion for the Education Industry.

Our Strategies

•        Further improve research and development capabilities and continue to diversify our educational content database;

•        Further penetrate existing market and improve our product coverage;

•        Further promote brand awareness and enhance brand influence;

•        Continue to strengthen our technology and data analytics capabilities; and

•        Pursue strategic acquisition and investment opportunities.

Our Challenges

Investing in the ADSs involves a high degree of risk. You should carefully consider the risks and uncertainties summarized below, the risks described under the “Risk Factors” section and the other information contained in this prospectus, before you decide whether to purchase the ADSs.

We face risks and uncertainties in realizing our business objectives and executing our strategies, including:

•        We face intense competition within each of our business segments. If we are unable to compete effectively, we could face pricing pressure and loss of market share, our revenue and gross profit may be significantly reduced, which may materially and adversely affect our business, financial condition and results of operations;

•        Our historical financial and operating results may not be indicative of our future performance and our financial and operating results may be difficult to forecast;

•        We have recorded losses or thin gross profit margins for some of our products;

•        Our business relies heavily on a limited number of promotion companies;

•        We are subject to credit risk in collecting trade receivables due from our customers;

•        Significant impairment charges against our intangible assets could materially impact our financial position and results of our operations;

•        Goodwill impairment could negatively affect our results of operations;

•        The fair value of our financial liabilities at fair value through profit or loss may fluctuate from time to time and could increase significantly in the future, which could materially and adversely affect our financial condition;

•        Our collaborative relationships with Tianyi Video, major telecommunications providers and other third party content providers are crucial to our business. If any of them discontinues their collaboration with us, our business, financial condition and results of operations may be materially and adversely affected;

•        If we are unable to retain existing customers and/or expand our customer base, we may not be able to maintain growth and our revenue may decline, which may materially and adversely affect our business, financial condition and results of operations;

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•        We are a holding company and the investors will have ownership in a holding company that does not directly own all of its operation in China. We rely on Jianzhi Beijing and Beijing Sentu, our VIE, and its subsidiaries for our operation in PRC. We also rely on dividends and other payments from Jianzhi Beijing to pay dividends and other cash distributions to our Shareholders, and any limitation on the ability of Jianzhi Beijing to pay dividends to us could have a material adverse effect on our ability to pay dividends to our Shareholders; and

•        The shareholders of Rongde Times and Beijing Zhongsi and individual shareholders of Beijing Sentu may have conflicts of interests with us, which may materially and adversely affect our business.

Corporate History and Structure

In May 2011, Beijing Sentu Huarui Education Technology Co., Ltd., or Sentu Huarui, the predecessor company of Beijing Sentu, was established as a limited liability company in the PRC.

In December 2015, Sentu Huarui was converted from a limited liability company into a joint stock limited liability company and renamed as Beijing Sentu Education Technology Co., Ltd., or Beijing Sentu.

In May 2016, Beijing Sentu was listed on the National Equities Exchange and Quotations, or NEEQ in the People’s Republic of China (stock code: 837329). However, as the liquidity of shares traded on NEEQ is comparatively low, Beijing Sentu voluntarily ceased to quote its shares on the NEEQ on November 7, 2017.

In October 2016, Shanghai Ang’you Internet Technology Co., Ltd., or Shanghai Ang’you, became a 51.2% subsidiary of our Group. To further expand our business operations, in October 2017, our Group acquired 51% equity interests of Guangzhou Xingzhiqiao Information Technology Co., Ltd., or Guangzhou Xingzhiqiao, and in August 2018, acquired the remaining 49% equity interests of Guangzhou Xingzhiqiao.

In March 2018, Jianzhi Education Technology Group Company Limited was incorporated in the Cayman Islands as an exempted company with limited liability. In March 2018, Jianzhi Education Group Company Limited, or Jianzhi Education (BVI), was incorporated as a wholly-owned subsidiary of Jianzhi Education Technology Group Company Limited. In April 2018, Jianzhi Education Technology (HK) Company Limited, or Jianzhi Education (HK), was incorporated, and was held by Jianzhi Education (BVI) as an investment holding company. In April 2018, Jianzhi Century Technology (Beijing) Co., Ltd., or Jianzhi Beijing, was established in the PRC as a wholly foreign owned enterprise, and was wholly owned by Jianzhi Education (HK).

In July 2018, we issued 1,111 Shares (10% of our enlarged share capital) to Dongxing Securities (Hong Kong) Financial Holdings Limited, or Dongxing Securities, for a consideration of RMB45.9 million.

In September 2018, the entire equity interest in Beijing Sentu Lejiao Information Technology Co., Ltd., or Sentu Lejiao, was transferred to Jianzhi Beijing such that our Company indirectly held the equity interest in Sentu Lejiao.

In June 2021, Sentu Shuzhi Education Technology (Beijing) Co., Ltd., or Sentu Shuzhi, was established in the PRC as a wholly-owned subsidiary of Sentu Lejiao.

Due to PRC regulations that limit foreign equity ownership of entities providing radio and television program production and operation business and value-added telecommunication business, in June 2018, we conduct a substantial part of our operations in China through contractual arrangements with Bejing Sentu, which is our VIE.

We gained control over Beijing Sentu through Jianzhi Beijing, our wholly-owned subsidiary in China, by entering into a series of contractual arrangements with Beijing Sentu and its shareholders, or Contractual Arrangements.

As a result of our direct ownership in Jianzhi Beijing and the aforementioned Contractual Arrangements, we are regarded as the primary beneficiary of Beijing Sentu, and Beijing Sentu is treated as our consolidated affiliated entity under U.S. GAAP. We have consolidated the financial results of our VIE and its subsidiaries in our consolidated financial statements in accordance with U.S. GAAP. We refer to Jianzhi Beijing as our WFOE, and to Beijing Sentu as our VIE.

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The following diagram illustrates our corporate structure, including our significant subsidiaries, our VIE and our VIE’s principal subsidiaries, as of the date of this prospectus:

____________

Notes:

(1)      48.8% equity interests in Shanghai Ang’you is owned by Ms. Xiaoling Tang, a prior management member of our group.

(2)      30% equity interests in Sentu Guoxin is owned by Gongxin Ruisi.

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The following diagram illustrates the anticipated post-offering shareholding structure of our company immediately after this offering, assuming no exercise of the underwriters’ option to purchase additional ADSs. The subsidiaries of our company will remain the same after the completion of this offering.

Corporate Information

Our principal executive office is located at 27/F, Tower A, Yingdu Building Zhichun Road, Haidian District, Beijing, 100086, the People’s Republic of China. Our registered office in the Cayman Islands is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor, New York, N.Y. 10168, United States.

Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our corporate website is www.jianzhi-jiaoyu.com. The information contained on our website is not a part of this prospectus.

Implications of Being an Emerging Growth Company

As a company with less than US$1.07 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements compared to those that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, in the assessment of the emerging growth company’s internal control over financial reporting. The JOBS Act also provides that an emerging

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growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. We have elected to take advantage of such exemptions.

We will remain an emerging growth company until the earliest of (a) the last day of the fiscal year during which we have total annual gross revenue of at least US$1.07 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the preceding three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of the ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

Conventions that Apply to This Prospectus

Unless we indicate otherwise, all information in this prospectus reflects no exercise by the underwriters of their option to purchase up to              additional ADSs representing              ordinary shares from us.

Except where the context otherwise requires, and for purposes of this prospectus only:

•        “ADSs” refer to our American depositary shares, each of which represents              ordinary shares;

•        “B2B2C model” refers to business-to-business-to-consumer, which is a business model that combines business-to-business and business-to-consumer for a complete product or service transaction;

•        “B2C model” refers to business-to-consumer, which is a form of transaction conducted directly between a company and consumers who are the end users of its products or services;

•        “CAGR” refers to compound annual growth rate;

•        “China” or “PRC” refers to the People’s Republic of China, excluding, for the purpose of this prospectus only, Taiwan and the special administrative regions of Hong Kong and Macau;

•        “ordinary shares” refer to our ordinary shares, par value US$0.0001 per share;

•        “our VIE” refers to our variable interest entity Beijing Sentu Education Technology Co., Ltd.;

•        “our WFOE” refers to our wholly foreign-owned enterprise Jianzhi Century Technology (Beijing) Co., Ltd.;

•        “PRC Operating Entities” refer to Beijing Sentu Education Technology Co., Ltd., or Beijing Sentu, Guangzhou Xingzhiqiao Information Technology Co., Ltd., or Guangzhou Xingzhiqiao, Guangzhou Lianhe Education Technology Co., Ltd., or Guangzhou Lianhe, Shanghai Ang’you Internet Technology Co., Ltd., or Shanghai Ang’you and Sentu Guoxin Education Technology (Beijing) Co., Ltd., or Sentu Guoxin;

•        “RMB” or “Renminbi” refers to the legal currency of China;

•        “Registered Shareholders” refer to the shareholders of Beijing Sentu, namely Beijing Rongde Times Investment Management Co., Ltd., or Rongde Times, Beijing Zhongsi Zhida Investment Management Co., Ltd., or Beijing Zhongsi, Mr. Jinbiao Li and Mr. Meiliang Li;

•        “US$,” “U.S. dollars,” “$” and “dollars” refer to the legal currency of the United States; and

Our reporting currency is the Renminbi. This prospectus also contains translations of certain foreign currency amounts into U.S. dollars for the convenience of the reader. Unless otherwise stated, all translations of Renminbi into U.S. dollars were made at RMB1 to US$0.1531, the exchange rate set forth in the prevailing foreign exchange website on December 31, 2020. We make no representation that the Renminbi or U.S. dollars amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. On March 19, 2021, the exchange rate of Renminbi into U.S. dollars was RMB1 to US$0.1536.

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Table of Contents

This prospectus contains information derived from various public sources and certain information from an industry report in March 2021 commissioned by us and prepared by Frost & Sullivan, a third-party industry research firm, to provide information regarding our industry and market position in China, India and emerging markets in Southeast Asia and other regions. Such information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to variety of factors, including those described in the “Risk Factors” section. These and other factors could cause results to differ materially from those expressed in these publications and reports.

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The Offering

Offering price

 

We expect that the initial public offering price will be between US$             and US$             per ADS.

ADSs offered by us

 

             ADSs (or              ADSs if the underwriters exercise their option to purchase additional ADSs in full).

ADSs outstanding immediately after this
offering

 


             ADSs (or              ADSs if the underwriters exercise their option to purchase additional ADSs in full).

Ordinary shares outstanding immediately after this offering

 


             Ordinary shares, par value US$0.0001 per share (or ordinary shares if the underwriters exercise their option to purchase additional ADSs in full).

The ADSs

 

Each ADS represents              ordinary shares, par value US$0.0001 per share.

The depositary will hold the ordinary shares underlying your ADSs with its custodian and you will have rights as provided in the deposit agreement among us, the depositary and owners and holders of ADSs from time to time.

We do not expect to pay dividends in the foreseeable future. If, however, we declare dividends on our ordinary shares, the depositary will pay you the cash dividends and other distributions it receives on our ordinary shares, after deducting its fees and expenses in accordance with the terms set forth in the deposit agreement.

You may surrender and cancel your ADSs to the depositary in order to receive ordinary shares. The depositary will charge you fees for any cancellation.

We may amend or terminate the deposit agreement without your consent. If you continue to hold your ADSs after an amendment to the deposit agreement, you agree to be bound by the deposit agreement as amended.

To better understand the terms of the ADSs, you should carefully read the “Description of American Depositary Shares” section of this prospectus. You should also read the deposit agreement, which is filed as an exhibit to the registration statement that includes this prospectus.

Option to purchase additional ADSs

 

We have granted to the underwriters an option, exercisable within 30 days from the date of this prospectus, to purchase up to an aggregate of              additional ADSs.

Use of proceeds

 

We estimate that we will receive net proceeds from this offering of approximately US$             million (or US$             million if the underwriters exercise their option to purchase additional ADSs in full), after deducting underwriting discounts, commissions and estimated offering expenses payable by us and assuming an initial public offering price of US$             per ADS, being the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus.

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Table of Contents

 

We plan to use the net proceeds of this offering primarily for (i) developing and producing new educational content and purchase educational content from third parties; (ii) research and development expenditures in product developing and technology capabilities; (iii) sales and marketing and customer service activities; (iv) working capital, such as potential acquisitions and strategic investments, although we have not identified any specific acquisition or investment target; and (v) other general corporate purposes.

See “Use of Proceeds” for additional information.

Lock-up

 

[We, our directors and executive officers and our existing shareholders and option holders have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or otherwise dispose of any ADSs, ordinary shares or similar securities or any securities convertible into or exchangeable or exercisable for our ordinary shares or ADSs, for a period ending 180 days after the date of this prospectus.] See “Shares Eligible for Future Sale” and “Underwriting” for more information.

Risk factors

 

See “Risk Factors” and other information included in this prospectus for a discussion of the risks you should carefully consider before investing in the ADSs.

Depositary

 

The Bank of New York Mellon

Listing

 

We will apply to have the ADSs listed on the Nasdaq Global Select Market, or Nasdaq under the symbol “JZ.” The ADSs and ordinary shares will not be listed on any other stock exchange or traded on any automated quotation system.

Payment and settlement

 

The underwriters expect to deliver the ADSs against payment therefor through the facilities of The Depository Trust Company on             , 2021.

Unless otherwise indicated, all information contained in this prospectus assumes no exercise of the option granted to the underwriters to purchase up to additional              ADSs, if any, in connection with the offering.

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Summary Consolidated Financial Data

The following summary consolidated statements of income and comprehensive income for the years ended December 31, 2019 and 2020, summary consolidated balance sheets data as of December 31, 2019 and 2020, and summary consolidated statements of cash flow data for the years ended December 31, 2019 and 2020 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The following summary consolidated statements of income and comprehensive income for the three months ended March 31, 2020 and 2021, summary consolidated balance sheet data as of March 31, 2021 and summary consolidated cash flow data for the three months ended March 31, 2020 and 2021 are derived from our unaudited interim condensed consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. Our historical results are not necessarily indicative of results expected for future periods. You should read this Summary Consolidated Financial Data section together with our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The following table sets forth a summary of our consolidated statement of income and comprehensive income for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021.

 

For the Years Ended
December 31,

 

For the Three Months Ended
March 31,

   

2019

 

2020

 

2020

 

2021

   

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

   

(amount in thousands, except for share and per share data)

 

(amount in thousands, except for share and per share data)
unaudited

Net revenues

 

358,762

 

 

404,932

 

 

61,995

 

 

54,610

 

 

98,374

 

 

15,015

 

Cost of revenues

 

(227,811

)

 

(275,790

)

 

(42,223

)

 

(42,545

)

 

(72,736

)

 

(11,102

)

Gross profit

 

130,951

 

 

129,142

 

 

19,772

 

 

12,065

 

 

25,638

 

 

3,913

 

Operating expenses:

   

 

   

 

   

 

   

 

   

 

   

 

Sales and marketing expenses

 

7,553

 

 

5,032

 

 

770

 

 

1,183

 

 

2,653

 

 

405

 

General and administrative expenses

 

30,053

 

 

26,054

 

 

3,989

 

 

8,329

 

 

7,204

 

 

1,100

 

Research and development expenses

 

16,901

 

 

15,585

 

 

2,386

 

 

1,778

 

 

3,887

 

 

593

 

Total operating expenses

 

54,507

 

 

46,671

 

 

7,145

 

 

11,290

 

 

13,744

 

 

2,098

 

Income from operations

 

76,444

 

 

82,471

 

 

12,627

 

 

775

 

 

11,894

 

 

1,815

 

Other income:

   

 

   

 

   

 

   

 

   

 

   

 

Total other income, net

 

8,101

 

 

4,925

 

 

754

 

 

586

 

 

1,694

 

 

259

 

Income before income tax

 

84,545

 

 

87,396

 

 

13,381

 

 

1,361

 

 

13,588

 

 

2,074

 

Income tax expense

 

986

 

 

486

 

 

74

 

 

942

 

 

1,307

 

 

200

 

Net income

 

83,559

 

 

86,910

 

 

13,307

 

 

419

 

 

12,281

 

 

1,874

 

Net income attributable to non-controlling interests

 

3,570

 

 

4,586

 

 

702

 

 

3,529

 

 

2,420

 

 

369

 

Net (loss)/income attributable to the Jianzhi Education Technology Group Company Limited’s shareholders

 

79,989

 

 

82,324

 

 

12,605

 

 

(3,110

)

 

9,861

 

 

1,505

 

Net income

 

83,559

 

 

86,910

 

 

13,307

 

 

419

 

 

12,281

 

 

1,874

 

Other comprehensive (loss)/income:

   

 

   

 

   

 

   

 

   

 

   

 

Foreign currency translation adjustments

 

112

 

 

(35

)

 

(5

)

 

(283

)

 

(18

)

 

(3

)

Total other comprehensive (loss)/income

 

112

 

 

(35

)

 

(5

)

 

(283

)

 

(18

)

 

(3

)

Total comprehensive income

 

83,671

 

 

86,875

 

 

13,302

 

 

136

 

 

12,263

 

 

1,871

 

Net comprehensive income attributable to non-controlling interests

 

3,570

 

 

4,586

 

 

702

 

 

3,529

 

 

2,420

 

 

369

 

Comprehensive (loss)/income attributable to the Jianzhi Education Technology Group Company Limited’s shareholders

 

80,101

 

 

82,289

 

 

12,600

 

 

(3,393

)

 

9,843

 

 

1,502

 

Earnings (loss) per share

   

 

   

 

   

 

   

 

   

 

   

 

Basic and diluted

 

0.72

 

 

0.74

 

 

0.11

 

 

(0.03

)

 

0.09

 

 

0.01

 

Weighted average number of shares

   

 

   

 

   

 

   

 

   

 

   

 

Basic and diluted

 

111,110,000

 

 

111,110,000

 

 

111,110,000

 

 

111,110,000

 

 

111,110,000

 

 

111,110,000

 

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Table of Contents

The following table presents our summary consolidated balance sheets data as of December 31, 2019 and 2020 and March 31, 2021:

 

As of December 31,

 

As of March 31,

   

2019

 

2020

 

2021

   

RMB

 

RMB

 

US$

 

RMB

 

US$

   

(in thousands)

 

(in thousands)
unaudited

Assets

                   

Current assets:

                   

Cash and cash equivalents

 

88,144

 

20,949

 

3,207

 

33,660

 

5,138

Restricted cash

 

124

 

 

 

 

Accounts receivable, net

 

83,575

 

114,804

 

17,576

 

125,851

 

19,209

Inventories

 

3,854

 

1,976

 

303

 

2,726

 

416

Prepaid expenses and other current assets

 

3,381

 

2,926

 

448

 

5,000

 

763

Short-term prepayments

 

15,604

 

2,664

 

408

 

3,332

 

508

Short-term investments

 

20,840

 

70,680

 

10,821

 

21,030

 

3,210

Total current assets

 

215,522

 

213,999

 

32,763

 

191,599

 

29,244

Non-current assets:

                   

Right-of-use assets, net

 

6,260

 

2,664

 

408

 

1,742

 

266

Deferred tax assets, net

 

863

 

324

 

50

 

1,058

 

161

Property and equipment, net

 

715

 

216

 

33

 

194

 

30

Educational contents, net

 

65,581

 

140,105

 

21,450

 

149,632

 

22,838

Intangible assets, net

 

27,979

 

23,844

 

3,650

 

21,936

 

3,348

Goodwill

 

7,712

 

7,712

 

1,181

 

7,712

 

1,177

Long-term prepayments

 

39,063

 

51,567

 

7,895

 

79,681

 

12,162

Total non-current assets

 

148,173

 

226,432

 

34,667

 

261,955

 

39,982

Total assets

 

363,695

 

440,431

 

67,430

 

453,554

 

69,226

Liabilities

                   

Current liabilities:

                   

Accounts payable

 

15,306

 

23,227

 

3,556

 

21,072

 

3,216

Salary and welfare payable

 

2,986

 

3,402

 

521

 

1,265

 

193

Deferred revenue

 

16,760

 

7,395

 

1,132

 

6,958

 

1,062

Income taxes payable

 

1,824

 

921

 

141

 

2,897

 

442

Value added tax (“VAT”) and other tax payable

 

8,117

 

3,792

 

581

 

4,560

 

696

Other payables

 

6,063

 

6,444

 

987

 

8,235

 

1,257

Customer deposits

 

1,061

 

904

 

138

 

916

 

140

Lease liabilities, current

 

3,568

 

2,034

 

311

 

1,311

 

200

Amount due to related parties

 

24,729

 

24,777

 

3,793

 

26,744

 

4,082

Total current liabilities

 

80,414

 

72,896

 

11,160

 

73,958

 

11,288

Non-current liabilities:

                   

Deferred tax liabilities

 

3,360

 

2,776

 

425

 

2,630

 

401

Lease liabilities

 

2,320

 

283

 

43

 

228

 

35

Total non-current liabilities

 

5,680

 

3,059

 

468

 

2,858

 

436

Total liabilities

 

86,094

 

75,955

 

11,628

 

76,816

 

11,724

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As of December 31,

 

As of March 31,

   

2019

 

2020

 

2021

   

RMB

 

RMB

 

US$

 

RMB

 

US$

   

(in thousands)

 

(in thousands)
unaudited

Commitments and contingencies

                   

Mezzanine equity:

                   

Redeemable preferred shares (US$0.0001 par value; 11,110,000 shares authorized, issued and outstanding as of December 31, 2019 and 2020 and March 31, 2021)

 

45,985

 

45,985

 

7,040

 

45,985

 

7,019

Equity

                   

Ordinary shares (US$0.0001 par value; 500,000,000 shares authorized, 100,000,000 shares issued and outstanding as of December 31, 2019 and 2020 and March 31, 2021)

 

63

 

63

 

10

 

63

 

10

Additional paid-in capital

 

52,928

 

52,928

 

8,103

 

52,928

 

8,078

Statutory reserves

 

18,897

 

20,977

 

3,212

 

20,977

 

3,202

Retained earnings

 

155,104

 

235,347

 

36,032

 

170

 

26

Accumulated other comprehensive income

 

224

 

189

 

29

 

245,208

 

37,426

Total Jianzhi Education Technology Group Company Limited’s shareholders’ equity

 

227,216

 

309,504

 

47,386

 

319,346

 

48,742

Noncontrolling interests

 

4,400

 

8,987

 

1,376

 

11,407

 

1,741

Total equity

 

231,616

 

318,491

 

48,762

 

330,753

 

50,483

Total liabilities, mezzanine equity and equity

 

363,695

 

440,431

 

67,430

 

453,554

 

69,226

The following table presents our summary consolidated cash flow data for the years ended December 31, 2019 and 2020 and the three months ended March 31, 2020 and 2021:

 

For the Years Ended
December 31,

 

For the Three Months Ended
March 31,

   

2019

 

2020

 

2020

 

2021

   

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

   

(in thousands)

 

(in thousands)
unaudited

Net cash provided by (used in) operating activities

 

72,762

 

 

97,754

 

 

14,966

 

 

(14,896

)

 

10,911

 

 

1,665

 

Net cash provided by (used in) investing activities

 

(49,375

)

 

(164,857

)

 

(25,239

)

 

(39,586

)

 

1,877

 

 

287

 

Net cash provided by (used in) financing activities

 

2

 

 

49

 

 

7

 

 

0

 

 

(76

)

 

(12

)

Effect of exchange rate changes on cash and cash equivalents and restricted cash held in foreign currencies

 

139

 

 

(265

)

 

(41