China Zhongji Investment completes a targeted investment in Coswood through a private placement.
Recently, China Zhongji Investment completed a targeted investment in Suzhou Koswood Ink Co., Ltd. (stock abbreviation: Koswood, code: 300192), a listed company. This targeted increase in capital raising is used to acquire 50.17% of the equity of Longmen Education. After the transaction, Koswood will hold 100% of Longmen Education's equity, including previously held shares and those acquired through other means. Huaxia Fund, Boshi Fund, and others participated in this targeted increase in capital raising.
Koswood was established in 2003 and listed on the Growth Enterprise Market in 2011. Its main business is the research, development, production, and sales of printing offset inks. Its "Dongwu" and "Kingswood" brands have been leading the domestic offset ink market for many years and is one of the companies with the strongest technological innovation capabilities in China's environmentally friendly offset ink industry.
In 2017, while maintaining a stable ink business, Koswood attempted to develop new business sectors and acquired 49.76% equity in Longmen Education, starting a dual-main business layout of offset inks and education. In 2019, Koswood's education and training business revenue reached 552 million yuan, accounting for 57.54% of total operating revenue, becoming the company's main source of revenue.
Longmen Education was founded in 2003, focusing on the sub-sector of middle and high school entrance examination training. Its main business includes full-board training for middle and high school students, K12 extracurricular training, and the sales of teaching software and courses. Longmen Education's students have excellent college entrance examination results (50%+ first-tier university admission rate, 90%+ university admission rate), good reputation, and positive feedback on enrollment, establishing a leading brand position in Shaanxi Province.
The uniqueness of Longmen Education lies in its core business model—a mature middle and high school entrance examination tutoring system. It uses K12 training in other regions to attract students to its middle and high school entrance examination tutoring business, and develops teaching software to support students' learning, forming a unique educational model.
After this acquisition, Koswood holds 100% of Longmen Education's equity, successfully transforming into the education sector. Longmen Education's performance this year will be fully included in Koswood's, significantly increasing Koswood's performance and substantially improving earnings per share. The China Zhongji Investment project team believes that for a long time to come, K12 extracurricular training will remain a rigid demand market in China, continuing to experience "both volume and price increases," with considerable room for improvement in market penetration. With its distinctive educational characteristics and brand effect, as well as its "full-board campus + extracurricular learning" integrated development model, Longmen Education's business performance will continue to grow rapidly. We believe this investment will yield relatively safe and predictable returns.
