Fast-growing EdTech play
Pitt Street Research Report
Sydney, Oct 21, 2019 AEST (ABN Newswire) - China-based Retech Technology (
ASX:RTE), creates and distributes e-Learning solutions to corporates such as Mercedes-Benz, McDonald's, Bank of China and Huawei.
RTE is one of China's leading online training program providers leveraging its technology to deliver these solutions across platforms, i.e. the Internet, mobile phones, and social media.
Entry into new verticals to leverage existing IP RTE has recently acquired a Melbourne-based language school to leverage its existing knowledge of live-streaming classes. Through its new joint venture (JV), RTE has expanded into new geographies beyond China. It is also developing a Software-as-a-Service (SaaS)-based, subscription-only platform for Environmental, Social, and Corporate Governance (ESG) courseware. The new verticals and regions are expected to provide a significant revenue jump, with an expected 5-year Compound Annual Growth Rate (CAGR) of 11% in the global e-Learning industry.
Operational synergies to drive margin expansion
As RTE leverages existing content for new corporate clients, its platform for SaaS services and technology (Intellectual Property (IP)) for live-streaming operations, it is expected to drive operational synergies and profitability.
Valuation range of A$1.19-1.49 per share
Pitt Street Research have valued RTE at A$1.19 per share in the base case and A$1.49 in an optimistic case, using a blend of DCF and relative valuation. The assumptions are based on an increase in repeat projects using existing tech for expansion across new verticals and the inclusion of a subscriptionbased revenue stream via the ESG vertical.
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About Retech Technology Co Ltd
Retech Technology Co Ltd (ASX:RTE) is one of the largest technology solutions providers in China and provides solutions to companies that enable them to deliver corporate training online. The Company delivers solutions to a diversified and established user base via three channels: E-Learning Solutions, E-Training Partnership and E-Course Direct.
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