Chinese edutainment provider iHuman is seeking to raise $100 million via New York’s stock exchange, a placeholder filing shows, at a time when tensions between the Trump administration and China-based, US-listed companies are brewing.

iHuman, which launched its online learning offering in 2016, plans to list its American depositary shares (ADSs) on the New York Stock Exchange under the ticker IH.

The company, which provides educational games, audiobooks and apps targeted at children aged between three and eight, is poised to join a raft of China-based education companies listed on New York’s bourse, including TAL, New Oriental and GSX Techedu.

The publication of a redacted prospectus outlining iHuman’s plans comes as President Donald Trump’s administration seeks to bring the accounting practices of Chinese companies in-line with those based in the US, amid growing concerns around fraud.

Earlier this month, GSX Techedu confirmed it is under investigation by Wall Street’s watchdog, the Securities and Exchange Commission, after more than a dozen short-sellers this year tabled allegations of fraud against the $20 billion ed tech company.

Last month, as regulatory pressure mounted, it was revealed that New York-listed New Oriental, a Chinese after-school tuition giant, would pursue a dual listing in Hong Kong.

In its filing, iHuman said that its learning apps have 10.3 million active users, on average, a month, and 1.4 million paying users.

It reported a net income of 5.6 million yuan ($820,000) for the six months ended June 30, reversing a net loss of 271.8 million yuan ($40 million) in the same period last year. In 2019, iHuman generated $32 million in revenue.

“The childhood education industry in China is evolving and competitive, and we expect competition in this sector to persist and intensify as more players may enter this promising market,” iHuman said.

Proceeds from the flotation will be used to fund an expansion of the company’s products and services, it said, domestically and overseas.

“Although we have developed a large and rapidly growing user base, to continue to do so, we must attract users by continuing to expand the scope and improve the quality of our product and service offerings,” iHuman said.

Date published: 11 September 2020

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