IDJ Financial Invests in Education (12/14/2007)

The company's top management and distinguished guests break ground

To watch the film, please click here

IDJ Financial is a major shareholder of IDJ Education (representing 70% of the founding capital). The project to develop such a school in Ciputra Hanoi International City has been pursued by the American Education Company (AEC) – a private company with experience in education investment and management - for several years. Given the size of the project, IDJ Education was established by AEC and IDJ Financial to take charge of this project.

Competitive Advantages of HAS:

- Be positioned to benefit from serving a wealthy and well educated population in Ciputra Hanoi International City (within the next 8 years, there will be 50,000 residents in the area)
- A modern and comprehensive curriculum which is a combination of core curriculum required by Vietnam Ministry of Education and Training (MoET) and international education of excellent quality. Certain subjects will be delivered in English by native English speaking teachers to ensure that the pupils will have necessary qualifications to gain access to a wider range of higher education worldwide.

Mr. Richard Alba - Vice President of EquiPoint Vietnam and his spouse - Mrs. Cheryl Alba from the US joined the ceremony

- An international standard campus on a 2.6 ha site with superb teaching and learning facilities and playgrounds.
- A comprehensive environment for mental, physical and soft skills development.
- Preservation of Vietnamese culture, identity and family bonds.
- Alleviation of time pressure on pupils with all required and elective subjects delivered during normal school hours.
- Considerably less expensive than overseas education.

HAS will target pupils not only in Ciputra Hanoi International City but also residents in other parts of Hanoi. The school will extend shuttle bus services to different districts in Hanoi.

International Cooperation:

HAS plans to cooperate with schools in Singapore, USA, Great Britain, Australia… to enhance the pedagogical methodologies of its faculty and improve its curriculum. This cooperation will also allow students to have internationally recognized qualifications and facilitate their access to higher education in such countries and worldwide.

Construction and Design:

Archetype Group – a French architectural firm has been contracted to do the master plan. Ralph Baumann – Chief of Designer with years of experience in school designing and the Design Director of Hanoi Branch – was directly involved in this project. The school is modernly designed and well-equipped with state-of-the-art facilities, including laboratories, libraries, music and art performance centre, indoor sport centre, stadium, playgrounds, cafeteria… and a lot of space and green trees to create a natural and comfortable environment for the children.

The school will have a positive impact on the attractiveness of Ciputra Hanoi International City which will then offer all vital services of high quality including education, health care, entertainment and commercials… Therefore, Ciputra’s management pays special attention to this school project.

Mr. Pham Xuan Ha - BoD Chair of IDJ Education delivered the opening speech

Rationale for IDJ Financial’s engagement in education investment:

Big demand: In coming up with such a decision, IDJ Financial has conducted a broad-based survey with 1,200 families in Ciputra International City and other high income areas in Tay Ho District and its vicinity including Hoan Kiem, Ba Dinh, Trung Hoa – Nhan Chinh. The result showed that 78% of the families are willing to pay around USD 4,000 – 5,000 per year, as long as the learning environment is satisfactory.

It is estimated that there were about 100,000 Vietnamese students under 15 sent abroad for education in 2006. Without doubt, this figure does not reflect full demand for high quality education because sending children unsupervised overseas worries caring parents. In addition, fluency in English without a comparable fluency in Vietnamese puts children’s future ability to mix well and succeed in the Vietnamese society at a risk. Taking into account these factors, HAS devises a curriculum combining both the required subjects of MoET with some international ones to help children get a balance between Vietnamese traditional education and modern teaching and learning approaches and get familiar to overseas education at higher levels.

Vietnamese traditional fondness of learning: Vietnamese families always provide the best conditions for their children’s education. A child with good learning record is the pride not only of his/her parents but of the whole family.

Education is an investment: Asian families take education expenses for their children not only as a parental responsibility but also as a long-term investment. By paying for education and having successful children, parents can enjoy a relaxing and happy life during their old ages, thanks to the long-standing tradition of serving aged parents in Asia.

Education trend in the world: Nowadays more and more nations worldwide are taking education and health as major sectors in the economy. Developed countries see a rather high proportion of education sector in GDP. This explains why education and training advertisements are so prevalent in international media. In Asia, Singapore is a success story with education. In Vietnam, a number of professional investment institutions are intensely researching and seeking investment opportunities in this area, which makes it very trendy in the time to come.

By far, land prices for commercial and residential purposes in Ciputra Hanoi International City have gone up to over VND 50 million per m2. Therefore, residents in the area are all in high-income group. Besides, it is clear that it is not easy to find a site of this scale in Hanoi for education purposes. As a result, this project has been classified as one of the most important long term projects of IDJ Financial.

Frequently asked questions for IDJ Financial:

1. Why does IDJ Financial invest in such an education project?
IDJ Financial attaches importance to investment in education, which will not only deliver economic but huge social benefits as well. In addition, the demand for international standard education in Vietnam is rising. As a result, this sector becomes highly potential. Recently, several international standard schools in Vietnam have attained a profit rate of over 60%. The more developed the society is, the higher the demand for education.

2. What is the cooperation mechanism with Citra Westlake Development Co.?
IDJ Education has concluded a long-term land-leasing agreement with Citra Westlake Development Company – the developer of Ciputra Hanoi International City. Land rental is paid annually as a percentage of the school’s gross collection. With such an arrangement, IDJ Education does not have pay a large amount upfront to buy the land and only needs to arrange finance for the construction of the school. (Land prices for commercial and residential purposes in the area has grown up to VND 50 million per squared meter). Construction costs of the school are estimated to be around VND 130 million (about USD 8 million). The duration of the land-leasing agreement is 20 years, with the option to extend for another 15 years, which also coincides with the end of the Ciputra Hanoi International City project. Operation thereafter depends on the extension decision of the Government.

3. How long will the construction take?
Construction will be completed within two years starting from August 2007, which means the first school year will be from September 2007. From August 2008, the school will start with pupil enrolment and teacher recruitment for the first school year. The school will start having earnings in 2008.

4. When does the company begin to have profit? What is the intended payback period?
It is planned that the first revenue and profit will be generated in 2009. The intended payback period is 7 years.

5. What is the registered capital of IDJ Education?
The company’s registered capital is 80 bn dong, which is much smaller than its net present value (NPV) of 240 bn dong.

6. Can secondary investors make investment in this project?
Due to the scale of the project, institutional investors are invited to become shareholders of the company and priority will be given large investors.

7. Does IDJ Education have a plan for listing?
IDJ Education has a plan to be listed when meeting the requirements of the State Securities Commission, expected to be in 2010. Right from establishment, transparent corporate governance will be applied and audit will be done by internationally well-known auditing firms such as KPMG or Price Waterhouse Coopers.

8. What is the tentative tuition for pupils?
Tuitions will range between USD 4,000 to 5,000 per pupil per year. The exact figure is now being considered and a final decision will be announced when appropriate.

Contact persons:

Ms. Ngo Hong Diep – Deputy General Director.
Phone: (84-4) 3933 5086    Cell: 0913301116       Email: diepnh@idjf.vn

IDJ Financial