Important to note here that IDP has sacrificed a significant royalty income that was previously paid by the British Council for IELTS testing in China in order to compete in China in the English testing market. IDP lacks the distribution capabilities to run the tests itself in China, so it's outsourced test delivery to New Oriental. New Oriental's commitment and capabilities to sell and deliver testing services unknown. New Oriental's competitors in the student recruitment business will certainly not steer students their way for English testing.
I can't see how this makes business sense and expect IDP to end up with much lower IELTS revenue from China than under previous arrangements.
Meanwhile, IELTS under strong competitive pressure from Pearsons in India and other South Asian markets.
I'm far more positive about recovery in the student recruitment business than I am about IELTS.
IEL Price at posting:
$3.73 Sentiment: Buy Disclosure: Held
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