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Cash in on education with this international stock

hailing education international stock shares nasdaq

Education is big business.

Even with a population of less than 25 million people, education is big business in Australia. Along with the USA, UK, France, Germany and Canada, Australia is one of the top six destinations for international students.

Our attraction as a destination has only been increased by the threat of BREXIT and the election of President Trump.

As stated by the Federal Education Minister, Simon Birmingham, “International education is now our third largest export sector generating more than $21 billion of economic activity in Australia, supporting many jobs and providing benefits to both Australian and international students.”  Well over half of that income is generated by universities and tertiary institutions.

Outside Australia, there is no doubt that China is one of the largest markets when it comes to delivering education services. With its estimated current population of 1.4 billion people, the Chinese market is about 56 times larger than Australia.

The number of students in private primary-, middle- and high schools in China is already estimated to have surpassed 15.6 million, which is 65% of the entire Australian population.

One of the outstanding companies which is taking advantage of this growth in the education sector is Hailiang Education.

Hailiang Education Group (HLG) can be traded on NASDAQ via an ADR. It has a market cap of $US1.61bn, which is equivalent to around $A2.06bn.

In the past year alone, shares in Hailiang have risen nearly 900%, climbing from just above $US7 in May 2017 to hit an all-time high above $US63 in March this year.

Given that Hailiang educates just 0.35% of the private school market and that they are all local students, not transient international students, it seems there is still a great deal of upside potential for a company like Hailiang.

It is true that a number of comparatively small companies grabbed the education sector headlines in recent years in relation to the controversy surrounding the VET FEE-HELP scheme. However, there are also a number of substantial and relatively stable companies servicing the education sector in Australia.

Two of the largest ones are Navitas Limited (ASX:NVT) and IDP Education Ltd (ASX:IEL). With market caps of $A1.75bn and $A1.88bn respectively, these companies are of a similar size. Both are involved in facilitating access to Australian universities and providing “pathway” services, largely for international students.

While there are other similar or comparative education and education-related companies in Australia, they are no match for Hailiang Education.

Written by Alex Douglas

Alex Douglas

Alex Douglas is managing director of Monex Securities Australia (AFSL: 363 972), part of the Monex Group Inc. Since first plotting currency price charts by hand in 1983, Alex has worked in a range of markets including foreign exchange, futures and equities. Alex is a Certified Financial Technician under the International Federation of Technical Analysts. He also has a Diploma of Technical Analysis from the Australian Technical Analysts Association.

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