ReTech to IPO in Australia

Chinese educational-technology firm ReTech is looking to debut on the Australian Securities Exchange index, with an initial public offering set for March.

Seeking A$22.5 million ($17.2 million), the funds raised through the listing would represent 20 percent of the group’s A$112 million market value.

The Shanghai-based companydigitizes training material for organizations across China and has contracts with State-owned groups like Ping An Insurance and the Bank of China.

ReTech has also modernized training programs for multinationals like McDonalds, Mercedes-Benz and Sephora.

“We can gamify it, build quizzes around it or even make it teachable through a virtual reality headset,” ReTech co-chair Calvin Cheng told The Australian Financial Review.

“It’s very expensive to send trainers to address large workforces all over China. We can create an animated character to deliver the syllabus online and replace them all.”

ReTech plans to license course material for Australian colleges and already has a deal in place with Queensland TAFE educational authority to begin redesigning food-handling and mining-safety courses for Chinese workers, once the listing goes ahead.

“One of the reasons we’re listing in Australia is its great reputation for education and training. We intend to do more collaborations with content producers here,” Cheng said.

The company said the major consideration for targeting the Australian market concerns regulations within China.

ReTech has 30 percent or more of its shareholders based outside China, making it ineligible for a Chinese exchange.

“We’re a tad small for Hong Kong, so the best option in terms of liquidity and P/E ratios turned out to be the ASX,” Cheng said.

Chinese companies face higher costs listing in Sydney, however. The cost of the disclosures required for the prospectus is expected to be around A$3.6 million.