Raffles Education in trouble

September 28, 2009 at 11:18 am Leave a comment

According to Chinese press, Raffles Education Eastern university city project in Langfang,Hebei has run into trouble.

There are not enough enrolment and many schools have closed down. China’s private schools have run into a classic low quality yet oversupply problem.

It seems that schools within Eastern university project which Raffles Edu oversee are not happy with the incessant rental increase when their enrolment is slipping. Now, Raffles Edu is switching its business model to co-investing in these schools. will that turnaround the situation? It remains to be seen.

Anyway, the change in compensation for Chew Hua Seng,CEO from dividend to a hefty salary suggests that from now on dividend will be scarce as raffles edu has a cash flow problem. Those who still hope that this former market darling will return to its glory days will be disappointed.

Entry filed under: Investing. Tags: .

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