Au stressed that the top six companies operating in Chinese education account for just 6 percent of the total market, suggesting there is plenty of room for growth and new entrants.
“Remember, the market has just started to open up,” Au said, adding that the fund is focused on higher education and vocational training because that is where “sustainable” demand is.
Kevin Leung, executive director for investment strategy and wealth management at Haitong International Securities Company in Hong Kong, is also bullish on Chinese education.
“It’s definitely a good growth area,” Leung told CNBC on Monday.
He cited a combination of a still-underdeveloped sector, increasing demand and the willingness of people to pay for education even when tuition fees rise, a phenomenon he said is seen in other countries.
“I think it’s a pretty simple sort of business model,” he said. “You just have number of schools times the numbers of students times the tuition fee.”
The only causes for concern Leung noted are existing valuations, which he said are “pretty expensive,” and some lingering worries about regulation.
But the sector offers investors opportunity in an area that is “entirely not affected by the trade war,” he said. “That’s also a positive.”
Source : CNBC