General Environment Analysis

Regulatory
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Education System of Singapore is most favorable type for Asian countries. Due to the
strict government regulation, education system and provider are under the firm law
of government, and importantly international students are protected from
fraudulent activities. There are different types of education providers in Singapore,
they are;
1. Government Universities
2. Private Universities
3. Polytechnics Institutes
4. Private Colleges

Education System of Singapore is skill oriented and prepares students to face the
challenges of the market. Education in Singapore is laid emphasis because man-
power is only the resources for the development of the country.

Reasons to choose Singapore as a study destination

• Easier Visa Policy for Nepali students
• Quality Education that fits the demand of Nepali market
• Internationally recognized credentials
• Transfer facility
• Offshore campuses of internationally renowned universities
• Easier admission process
• Affordable fees compared to other countries
• Can apply after grade 10

China Regulatory

Investors may also want to take note that the China’s land reform regulations set for
March 2013 dictates all schools have to be owners of the land they operate in.
Hence, the investment in Oriental University City (OUC) in Langfang, China has
become a necessity for REC to continue participating in China’s growth. Many of its
competitors will be seeded out as the deadline approaches.
Economic
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darling-status/

As middle class households increase, and income levels improve, especially in Asia
whose economy is booming, there has been a spur in demand for higher education.
Raffles Education Corporation (REC) seems to be well positioned to benefit from this
growth due to its enlarged platform across Asia.

Let us take a Closer Look @ REC, the largest private education group in Asia-Pacific
that has grown to operate 38 colleges in 35 cities across 14 countries in the Asia-
Pacific region with more than 30,500 students enrolled in its tertiary programmes.

In its FY10 financial statements, REC reported a marginal 2.8% increase in earnings
despite revenue registering a 6.9% decline. However, excluding the $37.6 million
government grant at Oriental University City (OUC), REC suffered its first quarterly
net loss of $0.9 million since its listing in 2002, according to Credit Suisse’s report.

The weak results were caused by the impact of the global financial crisis as well as
high start-up costs for new colleges and higher allowance for doubtful debts and bad
debts.

Foreign exchange losses also dragged Raffles Education Corporation's first-half net
profit down 45 per cent to $11.9 million, from $21.6 million a year earlier, reported
on 2011 February.
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1297367940,00.html?

Commenting on the results, Mr Chew Hua Seng, Chairman and CEO of Raffles
Education Corp, said, “The results are encouraging in spite of the higher initial
expenses incurred with the rapid expansion of colleges in the region. The Group has
continued to grow its strategic presence across Asia amidst the uncertain economic
conditions. This expansion will put us in good stead as global economies strengthen.”

German companies have also found Singapore a good location to set up shop - more
than 1,200 of them are here today.

Of these, 130 hail from Baden-Wurttemberg, with 38 having established regional

headquarters or production facilities here - including household names such as
Robert Bosch, SAP, Daimler and Festo.
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Ties with China

Hit hard by the global slowdown, strengthening ties with China has taken on a
strategic imperative in Singapore which seeks to leverage the bilingual skills of its
ethnic Chinese majority to get a larger slice of China's fast expanding economic pie.

As Singapore prepares to mark two decades of ties with China next year, 20,000
Singaporeans are working in China and scores of joint ventures are underway.

Singapore is proving to be a fertile recruiting ground for Mandarin-speaking middle

and senior managers to run multinationals' operations in China where a lack of
qualified managers has held back expansion plans by many foreign firms.

'We use the term 'China-ready,' meaning we will just have to grow with them,' IE
Singapore CEO Chong Lit Cheong, whose state agency promotes Singapore firms'
investment apoad, told Reuters.

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%2Bpoint/Story/A1Story20090916-168233.html

Indian Economic

According to projections made by The Associated Chambers of Commerce and

Industry of India (Assocham), the saving habits of middle class people for higher
education of their children and the government’s plan to spend about 5% of GDP on
education in next five years will double India’s education market size to US$50 billion
by 2015. Currently, India’s education market size is estimated around less than
US$25 billion, of which higher education market size is close to less than US$15
billion. Assocham expects the urban disposable income to rise at a CAGR of close to
6% and 4% in the rural area.
Singapore Social
2Q11 still plagued by lower enrollments. New schools yet to make up for drop in
enrollments. Alas, the 14 new colleges set up in the last 2 financial years have yet to
ramp up to counter the drop in Private Education System students elsewhere
(namely China).

Singapore government encourages a product-oriented arts scene within its master

plan to include arts as a commodity for its economy, true explorations and
innovation exist but at a level that is not well funded.

China Social
China continues to play a new and increasingly important role in the global
education market as it has not only become a top source of education for overseas
students, but also as a top destination. Amidst the growing trend of the Chinese
sending their children overseas to pursue their studies, China government is making
a concerted effort to attract more international students.

Chew said that Raffles had studied the demographic profile of India and China and
saw huge potential in these markets. "There is an expanding middle class in these
two countries and they have aspirations which are truly international." Asian
countries give emphasis on manufacturing rather than design, but this was fast
changing. "Asia has disregarded design, only now some Asian countries have realized
how central design is in the economic growth path itself."

Raffles is also planning to set up a university in India for which it is on an exploratory

mission. "We see potential in Delhi and Mumbai for design, whereas Bangalore and
Chennai are hard crack for us as they are steeped into information technology."
Political
Since Singapore’s Global Schoolhouse (GS) initiative launched in 2002, it has become
home to over 1,200 private education organizations, 44 pre-tertiary schools and 16
leading foreign tertiary institutions, offering international curricula. The aim of the
Global Schoolhouse is to “develop a vibrant community of tertiary, pre-tertiary and
corporate training institutions to make the city-state a global talent hub.” By
broadening its educational offerings, GS has attracted over 86,000 international
students and has advanced innovation by promoting faculty collaboration with over
7,000 MNCs and 100,000 SMEs in Singapore.
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Developing urban solutions which is a new growth area for Singapore.

'Because of our compact size we are an ideal city to test-bed urban solutions, before
adapting and exporting the outcomes on a larger scale to cities in China, India and
many Southeast Asian countries,' Mr Iswaran, Singapore's Senior Minister of State
for Trade and Industry and Education, said.
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China Event
Lower number of students in China taking the ‘Gao Kao’ (the trend of more students
choosing to pursue education overseas)

NES intake to fall further this year on lower “gao kao” takers. Based on newspaper
reports, we understand that high school students taking the “gao kao” exams were
at 9.46m, a further drop from last year’s 10.2m. We believe this will continue to
impact enrollments for its schools in China, but possibly partly mitigated by
enrollments in its new schools.

Cultural
Meritocracy

The government claims that meritocracy is a cornerstone of Singaporean society,

and that people are rewarded based on their personal achievements, with no regard
to their ethnicity or background

English is the first language of Singapore. Singapore is a multi-lingual nation and

Singaporeans speak different languages as their first language.

In 2005, 36% of Singaporeans speak Mandarin at home. 30% speak English at home
and 13% speak Malay while 3% speak Tamil at home. Singaporeans who do not
speak English as their home language normally speak it as their second language.

REC offer courses such as Certificate in Language for local and international students
at both elementary and advanced level.
Technology
Information technology is transforming the education sector – yet the internet,
email and Instant Messaging carry risks that can disrupt operations and threaten the
foundation of trust upon which schools are based. Spam is a serious issue in the
education vertical. In August 2010, the global spam rate for the education sector was
92.9%, with virus rates rising to 1 in 155.7 emails.

Strategies

Corporate Diversification
 REC, which has embarked on a diversification strategy in the last two years,
set up a total of 13 colleges outside China. REC owns the proposed Raffles
Millennium University (RMU) in Greater Noida (a joint venture with Educomp
Solutions) and other 8 colleges. They are all strategically located across India.

Product Differentiation and M&A

With a robust balance sheet, the Group will continue to invest organically through its
new colleges, the development of proprietary courseware, value creation of Oriental
University City and through strategic acquisitions.

 Meantime, Raffles is ditching plans for acquisitions in the U.S. and Europe so
it can "focus on Asia, where we have the know-how and where we know the
culture," Chew says. "We were looking at it, but we find that for every dollar
we spend there, it's better spent here. I get a much faster return. If we were
to go [there] it'll be another ball game altogether. We have China, India and
Southeast Asia to fuel growth for many, many years."
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Linkages with other Companies

 RafflesEducationCorp hires Symantec Hosted Services for providing email

security and content control services for their staff since September 2009.

“Symantec Hosted Services suited the needs of Raffles Education as we were

looking for a cloud computing IT security solution,” said Mr Chew. “Symantec
Hosted Services saves our IT department time and energy. Now we can be
much more effective in dealing with spam, and at the same time, we can
focus on tasks that add value to the organization. Since deploying Symantec
 Hosted Services, the incidence of spam has dropped to less than 2 percent of
the 5,000 – 6,000 emails that RafflesEducationCorp receives on a daily basis.

Resource management - “Before, we had to devote our resources for

managing this problem alone but now, we can use these resources in more
valuable roles,” said Mr Chew.

Strategic Alliance
 Singapore-based Raffles Education Corp Ltd (REC), which aims to set up a
multi-institutional education campus at Iskandar Malaysia by 2011, hopes to
invest about RM200mil in the proposed venture over the next five years as
part of its move to fortify its education business in the region.

 It was announced that Singapore-listed Raffles Education Corporation has

signed a collaborative agreement with Baden-Württemberg Cooperative
State University and Spain's University Alcala.

Under the agreement, the newly created Raffles European Dual Academy will
offer Germany's dual education system of theory-practical education in
Singapore.

The model involves alternate study phases of theory and practical experience
in participating companies and industries, allowing students to gain first-hand
experience at the workplace.

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DirID=111&rec_code=674909

 In 1999, Raffles Design Institute (Singapore), a subsidiary of Raffles Education

Corp (REC), set up a joint-venture with Changchun University to offer
business and design programmes in the city of Changchun in China.

 REC owns the proposed Raffles Millennium University (RMU) in Greater

Noida (a joint venture with Educomp Solutions) and other 8 colleges.
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feasibility-of-setting-up-campus-in-iskandar-malaysia.html