Investigation of First High-School Education Group Co., Ltd.

First High-School Education Group Co., Ltd. (FHS) Misled Investors in Connection with the Company’s IPO

A shareholder filed a class action on behalf of all persons and entities that purchased First High-School Education Group Co., Ltd. (FHS) American Depository Shares in the Company’s March 2021 initial public offering (“IPO”).  The complaint alleges violations of the Securities Act of 1933.  FHS operates private high schools in Western China and provides for-profit tutoring services. 

According to the complaint, the Registration Statement in support of the Company’s IPO highlighted the Company’s “steady growth” and stated that FHS is “well-positioned to seize the enormous and sustainable demand for high-quality high schools in China.” The Registration Statement also stated that the private secondary education industry in China experienced a “CAGR of 18.4%” from 2014 to 2019 and was on track to achieve a “CAGR of 24.9%” from 2019 to 2024, and represented that this sustained growth was due to a variety of positive factors impacting FHS’s business.

However, defendants failed to disclose certain adverse facts that existed at the time of the IPO.  Specifically, that the new rules, regulations, and policies to be implemented by the Chinese government following the Two Sessions parliamentary meetings – held prior to the IPO – were far more severe than represented to investors and posed a material adverse threat to the Company and its business.  Further, contemplated Chinese regulations and rules regarding private education were leading to a slowdown of government approval to open new educational facilities, which would have a negative effect on FHS’s enrollment and growth. In complying with the new policies, FHS took a financial hit.

On April 5, 2022, FHS issued a press release announcing it had received a letter from the NYSE stating that the Company was in non-compliance with the NYSE’s listing requirements because its total market capitalization and stockholders’ equity had fallen below compliance standards. On May 3, 2022, FHS filed a notice with the SEC that it would not be able to timely file its annual report on Form NT 20-F.  On May 10, 2022, FHS ADSs closed below $1 per ADS – more than 90% below the price at which they were sold just more than one year previously.


Next Steps: If you acquired shares of First High-School Education Group Co., Ltd. pursuant to the Company’s March 2021 IPO, you have until July 11, 2022, to ask the court to appoint you lead plaintiff for the class.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  You do not have to participate in the case to be eligible for a recovery.   

All representation is on a contingency fee basis. Shareholders pay no fees or expenses.

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