China New Higher Education Group Acquired the Only Private Higher Education Institution in Luoyang, Henan Province

New Milestone in Central China To Accelerate National Strategy by Expanding School Coverage to Seven Provinces and Regions Across China

(8 January 2018, Hong Kong) China New Higher Education Group (the "New Higher Education Group", together with its subsidiary, the "Group", Stock Code: 2001.HK) is pleased to announce that on 8 January 2018, Beijing Daai Consulting, a wholly-owned subsidiary of Yun Ai Group, entered into the investment of a total of 55% equity interest in the sponsor company of a private institution of higher education in Henan Province at a consideration of RMB101,500,000. The Group agreed to inject RMB294,000,000 to the Henan School for further development of the construction of Phase II campus and the return of arrears. Upon the completion of Phase II campus with put into use, it will support school to enlarge the enrollment scale.

The Henan School is the only private institution of higher education providing specialist education in Luoyang City, which has received enormous support from the local government in terms of school operation and other aspects since its establishment. At present, the college has nine secondary-level institutes and 21 higher vocational majors, with distinctive majors being electronic commerce, software technology, Internet of things application technology, etc.

Henan Province has all along been the top in terms of the number of students participating in the national college entrance examinations, with the gross enrollment rate in higher education approximately 38.8%, lower than national average level (42.7%) by 3.9 percentage points. The number of students of this school for the academic year of 2017/2018 was 18,243, representing an increase of 37% compared to 13,289 for the academic year of 2016/2017. It is expected that the number of students enrolled will continue to increase with Phase II campus putting into use. In the future, as the quality of school operations continues to improve, there will be an increase in the number of general junior college students recruited, which in turn will increase the income from tuition fees.

Mr. Li Xiaoxuan, the Chairman of the board of directors of China New Higher Education Group, stated that: "Through the acquisition of the Henan School, the geographic coverage of schools of the Group has expanded to seven provinces and regions, especially in Hubei, He’nan and other central regions to accelerate the pace of expansion, consolidating the Group’s market position of the most widely distributed network layout in the domestic private higher education industry, and contributing to greater market share and higher market penetration. The increase in the number of students and tuition fees can also improve the future operating income of the Group. In the future, the Group will continue to focus on strengthening the capacity of extension and expansion by acquisitions, expanding school network and increasing market penetration, and leveraging advantages of integration of school operations to strive for greater room for development."

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About China New Higher Education Group Limited:

China New Higher Education is a leading private formal higher education group in China with nearly 20 years of education industry experience, specializing in providing higher education which focuses on applied sciences. The Group endeavors to help each student maximize his or her potential and live his or her life to the fullest. The Group’s fundamental educational philosophy is mainly composed of two integral parts: (i) to nurture the growth of students, and provide education tailored to each student’s individual needs and circumstances; and (ii) to equip students with practical and readily applicable skills that meet market demand. The Group currently operates and invests in four schools, namely the Yunnan School, the Guizhou School, the Central School and the Northeastern School in Southwestern, Central and Northeastern China, and the construction of the Northwest School will commence in the second half of 2017.

The Group provides high quality higher education in a wide selection of fields in applied sciences. Its courses are designed to equip students with practical and readily applicable skills, helping to prepare them for job market. It achieved industry-leading graduate employment rates, with over 98% of its graduates from 2013 to 2015 by the end of their year of graduation, according to Frost & Sullivan. Furthermore, the Group is one of the fast-growing higher education groups focusing on applied sciences in China in terms of the number of students enrolled at the end of the past three school years, with its overall student enrolment growing from 46,460 in 2016/2017 academic year to 54,290 in 2017/2018 academic year, including total 39,226 students in Yunnan, and Guizhou school which the Group operated and total 15,064 students in Central China and Northeast school which the Group invested. The Group has been included as a constituent stock of the Hang Seng Composite Small Cap Index and the Hang Seng Consumer Goods & Services Index in the Hang Seng Composite Index Series in August 2017, and has been included as a constituent stock of the MSCI China Small Cap Index in November 2017.