Baseball player Satchel Paige once said, “Work like you don’t need the money. Dance like nobody’s watching.”
If you rearrange the words to say “Make money like you’re dancing”, you get closer to the idea of how profitable the dance school business in Hong Kong really is.
Consider SDM Jazz and Ballet Academie, which submitted a listing proposal to the Growth Enterprise Market with plans to raise no more than HK$100 million this year, according to a local paper.
With more than 4,600 students in 20 outlets, SDM has made over HK$10 million in the last two years with annual turnover in excess of HK$40 million. The profit margin makes the two biggest listed companies in the city – HSBC and China Mobile — look like they’ve got two left feet.
In a city where dance shows are hardly ever filled to capacity, why is the number of jazz and ballet operators on the up in Hong Kong? Last year there were 136 of these kinds of operators, up 30 per cent from 102 five years ago.
The one-word answer is kids. Not that kids are particularly fond of dancing — it’s more about the parents wanting them to have a sought-after dance qualification.
In one interview, leading Hong Kong ballet light Jean M Wong, who runs one of the best ballet schools in Asia, admitted that it’s often the parents, not the kids, who want to learn ballet to get a Royal Academy of Dance certificate.
But isn’t the same thing as a child getting an eighth grade piano certificate? Yes, except almost every child has this kiddie equivalent of a bachelor’s degree, so parents are looking for more exotic interests.
The South China Morning Post reported three months ago on a five-year-old girl aiming to become an assistant dance teacher next year after passing 11 international dance exams in one day when she was four.
SDM certainly appears to have parents in mind with its mission to “provide more than 300 performance opportunities to students annually, including competitions, performances and cultural exchange programs. All these activities can enable our students to build up confidence, friendship and team spirit.”
With TVB artists among the parents of its students, SDM charges more than HK$9,000 per student per year. Fees rise to more than HK$1,000 a month for students preparing for the Royal Academy of Dance certificate.
But even with all this hoofing and soft-shoe shuffling, dance performances are not the favourite pastime of most Hong Kong people. In fact, the government subsidizes most dance performances.
The Hong Kong Dance Company’s annual report shows that HK$33.4 million of the organization’s HK$44.5 million in revenue in 2012/3 was from government subvention. Even then it made a loss of more than HK$1 million.
SDM will join a group of educational listing candidates such as Nord Anglia Education and Maple Leaf International School that are seeking fresh capital for expansion.
This booming business gives owners the chance to cash out their original investments but also allows parents who pay expensive tuition fees to hedge their education exposure.
It’s one of the finer financial points of dance worth appreciating.
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