SOURCE: HQ Global Education

May 17, 2010 07:30 ET

HQ Global Education Announces Major New 20 Year Agreement to Assume Control of Shanxi Tianzhen No. 2 Secondary School to Provide Local Students Its "Customized Training" Program and New Job Opportunities

Under the Contractual Arrangement HQ Has the Right to 100% of Shanxi Tianzhen No. 2 Secondary School Revenues and Profits Which It Believes Will Add Substantially to Its Growth; By Implementing New Effective Management Solutions and New Vocational Training Programs HQ Anticipates Increasing the Student Population From 410 to Nearly 3,000 in the First Year at Current Teaching Facilities and to More Than 6, 000 Within Four Years After a Planned New School Campus Is Built

NINGXIANG COUNTY, HUNAN PROVINCE, CHINA--(Marketwire - May 17, 2010) -  HQ Global Education Inc. (The "Company" or "HQ") (OTCBB: HQGE), which controls and operates eight vocational schools in China under the widely known "HQ" brand and is one of China's leading providers of customized or "order-oriented" vocational education, today announced it has reached a twenty- year contractual arrangement with a government school -- Tianzhen No. 2 Secondary School ("the Tianzhen School") in Shanxi Province. Under the agreement, HQ will be responsible for managing and operating the Tianzhen School and can freely use School resources including teaching equipment, facilities and fixed assets. Under the agreement, HQ will be entitled to 100% of the Tianzhen School's revenues and profits for the next twenty years beginning May 10, 2010. HQ anticipates being able to provide the students of Tianzhen with better vocational training programs and, importantly, more work opportunities. The Company views the transaction as another major step in the expansion of HQ's highly successful "customized" education programs.

Mr. Guangwen He, Chairman and CEO of HQ, stated, "We are very pleased to enter this new cooperation with Tianzhen Secondary School and anticipate that we will be able to fulfill their desire to upgrade their program and provide jobs for their students. It is also a milestone for HQ to enter into a customized education program with the contractual arrangement mode and the first cooperative school since HQ has become a US listed company. In doing so, we have taken over 200,000 square meters of land on which we can build a new school and campus in consultation with the Shanxi government. Further, we will add new teaching facilities, bring in more outstanding teachers to improve instruction and enlarge the scale of the school's programs." He added, "HQ anticipates greatly expanding student enrollment and organizing a variety of vocational training programs to attract more students and cooperative enterprises under its customized education model. It is anticipated that the student body will grow from 410 students to nearly 3,000 students in the first year and to more than 6,000 students after four years and the anticipated completion of a new campus. HQ Global guarantees that it will conduct a professional and effective operation to enhance the school's status, brand position and market value. Further, I firmly believe the school can develop into a leading vocational school in China with efficient management and teaching excellence under the operation of HQ."

Mr. He said that with much welcomed support from the local Government, the salary of the in-service teachers is being paid by the government, which also will guarantee student resources. The government also will supply 1500 students for the three year training programs annually and 1500 students for short term training programs. In exchange, HQ will ensure employment for the graduates with its customized education mode, and provide more job opportunities to local students, thereby optimizing allocation of local labor force resources to ensure the long-term economic development of Tianzhen County. At the same time, HQ anticipates that successful expansion of the school, and the improvement in its operating modes, will contribute to the HQ brand image and awareness.

The Agreement Outline

Under the agreement, HQ will assume control over 200,000 square meters for development of a new campus to be built and the existing school in consultation with the Shanxi Government, planning to serve approximately 6,000 students. HQ will have ownership and the right of disposal for the independent acquisition of land, newly added buildings, newly installed equipment and facilities, and all the immovable and movable property. HQ will receive administrative power and general control over the business from May 10, 2010 to May 9, 2030. This includes but is not limited to the rights to appoint and/or dismiss the directors and senior personnel of the School and the rights to allocate revenues to cover varied expenditures in relation to the school's operations. HQ Global is authorized to develop comprehensive operating plans, such as advanced concepts, solutions and approaches, for the overall management of the School. Once the agreement is effective, HQ Global has the right to all revenues and profits that are generated from the entire business operation. Most of the teachers' salaries in the School will be paid by the Government, which also is responsible for the student enrollment at the School. The assets of the newly acquired land and all the buildings on it are to be owned by HQ.

Signees to the agreement with Tianzhen Secondary School and the Shanxi Government include: The former Director at the Policies and Regulations Department of Poverty Alleviation and Development of the State Council, Mr. Fuhe Liu (now the Inspector); the Director of National Vocational Schools Students Administrative Office Ms. Xiaojun Wang; the Director of Shanxi Poverty Alleviation Office, Mr. Kunming Liu; Director of Vocational Education Office of Shanxi Department of Education, Mr. Gensheng Wang; Deputy Mayor of Datong City, Mr. Xianghua Gao; Commissioner of Datong Education Bureau, Mr. Shengzhi Lv; Secretary of Tianzhen Party, Ms. Shanghong Xu; the Head of Tianzhen County, Mr. Huimin Zhao; Chairman and CEO of HQ Global, Mr. Guangwen He.

Tianzhen No. 2 Secondary School ("Tianzhen School")

Located in the historic province of Shanxi, Tianzhen No. 2 Secondary School is a government comprehensive middle school approved in 1975 by the People's Government of Tianzhen County with an area of 42,000 square meters. The School began to offer secondary vocational education in 2001, such as Computer Application, Business English, Chemistry, Electronics and Digital Control, and is currently serving 410 vocational students with 42 teaching staff. The School's current facilities include two teaching building, two dormitories, one dinner hall, one science building, one sports yard, three laboratories, three computer rooms, five multimedia classrooms, one language classroom, one library, one reading room and various kinds of sport equipment.

The customized education to be provided will mirror the HQ customized programs at all other eight schools it currently operates. Tianzhen School is proud to become the ninth schools under HQ operation. By adding new programs and secured student resources, HQ is expecting to enlarge the School capacity to enroll nearly 3,000 students within the year ahead at the current teaching facilities and more than 6,000 students after a planned new campus is built within four years.

HQ Global Education Inc. ("HQ")

HQ provides "customized training" services to varied student populations through running its own private schools or cooperating with selected vocational schools in China. By also providing full-scale educational and job placement services, the Company realizes recurring revenues, such as tuition fees, accommodation fees, certification fees, uniform fees, off-campus internship management fees, job placement fees, among others. As of the first semester of 2010, a faculty and support staff of nearly 2,800 served a total of more than 32,000 HQ students from 21 provinces throughout China. They are taught a wide range of vocational skills in approximately 60 programs in 17 technical career categories at eight vocational schools in the Sichuan and Hunan Provinces. In cooperation with nearly 120 participating employers, HQ has become increasingly synonymous throughout China with superior training to meet employer needs and for producing outstanding technical specialists with immediate jobs and fulfilling career opportunities. Students of HQ schools have consistently achieved 100% employment upon graduation.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

Contact Information

  • Contacts:
    Mr. Guangwen He
    Chairman and Chief Executive Officer
    HQ Global Education Inc.
    Tel: (86 731) 87828601
    Fax: (86 731) 87828601
    In the U.S.

    Ken Donenfeld
    DGI Investor Relations
    Tel: 212-425-5700
    Fax: 646-381-9727