The edutech company’s new alliance with a U.S. children’s media brand with more than a half century of history looks more promising than its earlier global expansion efforts
Key Takeaways:
- iHuman has formed a new partnership with U.S. children’s publisher Cricket Media, aiming to boost its three-year-old globalization drive
- The new partnership could help return the edutech company to revenue growth, following two years of declines amid sluggish demand in its home China market
Going global is all the rage these days among Chinese companies, most stymied by a slowing economy and heavy regulation at home. But doing business overseas is often easier said than done, and it’s far easier to announce new products and strategic alliances than actually deriving money from such efforts.
That might explain the muted reaction to iHuman Inc.’s (NYSE:IH) latest announcement of a new strategic tie-up with Cricket Media, a U.S. publisher of a children’s magazine with history dating back to 1973. Shareholders responded with a 3.6% drop for iHuman’s stock on Thursday after release of the announcement, which will see the two sides work together to bring Cricket’s work to the 21st century using some high-tech touches.
To be fair, iHuman also released its latest quarterly report on Thursday, and some of the negative reaction might have been in response to that. The report was a mixed bag, including continuing revenue declines but a return to profit growth for one of China’s older players in the edutainment space, whose roots date back to the former online game company Perfect World.
We should also point out that iHuman’s stock has been doing quite well in general lately, up around 80% so far this year amid a broader rally for many U.S.-listed Chinese stocks. Education stocks have fared well in the recent rally, as many that survived a major regulatory crackdown in 2021 and 2022 continue to recover from that.
The latest tie-up looks somewhat intriguing, …
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