We will make further efforts to recruit more students for Huali Vocational College Yunfu Campus and Huali Technician College Yunfu Campus, which commenced operations in September 2018 and September 2016, respectively. Those schools have significant potential to increase recruitment. We will continue to increase our teaching staff and increase the number of majors and curricula in Yunfu campuses to further improve the quality of our education and attract more students. Particularly, we started to offer five-year full-time vocational programs to students ofj unior high-school level at Huali Technician College in September 2018 to further expand student enrollment.

We also plan to upgrade Huali Vocational College (including both Huali Vocational College Zengcheng Campus and Huali Vocational College Yunfu Campus) from a school providing three-year junior college education to a school providing four-year undergraduate education. On January 25, 2017, the MOE issued the Opinion on the Establishment of Higher Education Institution During the Thirteenth Five-Year Plan Period (《關於“十三五”時期高等學校設置工作的意見》), which requires scientific planning of higher education institutions. On March 24, 2017, the Department of Education of Guangdong Province issued the Notice on Issues Concerning the Formulation of the Provincial Thirteenth Five-Year Plan of Establishing Higher Education Institutions (《關於編制省高等學校設置“十三五”規劃有關問題的通知》), pursuant to which the provincial Thirteenth Five-Year Plan of establishing higher education institutions (the “Provincial Plan”) shall be formulated before the approval of establishment of any higher education institution is granted. We plan to upgrade our Huali Vocational College according to the applicable laws and regulations as well as the latest requirements of the government authorities. Such upgrade plan is subject to the approval from relevant government authorities.

We also intend to continue to expand our school network in new geographic locations both in China and abroad. With encouragement of local government, we plan to establish a newj unior college in Jiangmen City, Guangdong Province to provide higher education and vocational education and grant junior college diplomas accredited by the MOE. Please refer to the section headed “– Planned Expansion” for details. In addition, as of the Latest Practicable Date, we had entered into letters of intent with local governments of Zhanjiang City and Huizhou City in Guangdong Province to explore the possibility of establishing new school or new campus in each city. Moreover, we are also in the process of establishing a new school in the United States to further expand and strengthen our brand. Please refer to the section headed “– Planned Expansion– A Higher Education Institution in the U.S.” in this prospectus for details.

In addition to setting up new schools by ourselves, we also plan to acquire new schools located in our preferred regions in the PRC, such as Guangdong Province, Henan Province, Sichuan Province, Shandong Province, Yunnan Province and Chongqing Municipality, and overseas countries in Southeast Asia and North America. As of the Latest Practicable Date, we did not have specific acquisition targets. We will take a variety of factors into account when selecting new school locations and potential acquisition targets, including demographics, potential demand, income trends, regional economic conditions, the level of local government support, the availability of suitable sites and existing market competition.

According to our current understanding and interpretation of the MOJ Draft for Comments, if the MOJ Draft for Comments is adopted in its current form, it may have the following implications for our expansion strategy:

(i) we may acquire schools that are permitted to be registered, and have not been registered, as for-profit private schools or non-profit private schools. When required to do so, we will register such acquired schools as for-profit private schools;

(ii) we may enter into cooperation with public universities with respect to independent colleges that have not been registered as for-profit private schools or non-profit private schools. However, if such independent colleges are required to register as