Listed Chinese Education Companies Transfer Training Companies by Subjects – Pandaily

Listed Chinese education companies are ending the last off-campus training services for required subjects to restructure and transform their business models, the 21st Century Business Herald reported on Friday.

Recently, the listed company Dongguan Kingsun Optoelectronic Co., Ltd., (Dongguan Kingsun), the listed company in Hong Kong Beststudy Education Group (Beststudy Edu) and the listed company in the United States China Online Education Group (51Talk) announced that they will transfer their training assets based on the program for the price of 1 yuan or 1 US dollar. Meanwhile, 51Talk’s main online English tutoring business for teens has been shut down, but their AI Enlightenment courses and adult English services are still available in China. It should be noted that 51Talk has made profits for several consecutive quarters. According to a financial report released on March 24, the company’s net profit in 2021 was 106 million yuan ($16.7 million).

Under China’s so-called “double reduction” policy, curriculum-based educational institutions are not allowed to approach the public for funding, and capitalization operations are strictly prohibited. An insider of the listed company said, “The business of the company needs to be transformed. If non-compliant businesses are not divested, it is difficult for new businesses to fund themselves.

After divesting their original businesses, new focus areas of these public companies were defined to cover quality education, vocational education, after-school programs and overseas businesses. However, training companies based on the original curriculum were acquired at a high price or are still profitable – thus the fairness of 1 yuan asset transfers has been questioned.

Dongguan Kingsun received a notice from the Shenzhen Stock Exchange (SZSE) on March 15, asking it to explain the reasons and rationality for the large discounts on the transaction.

In addition to the transfer of 1 yuan, some listed companies choose to close directly. On March 30, Dashan Education, a K12 off-campus education institution headquartered in Zhengzhou, Henan Province, released its 2021 annual results. According to the announcement, since August 2021, off-campus education enterprises for Chinese, Mathematics, English and other compulsory subjects have been liquidated, and most self-contained teaching centers have been closed.

At present, the transformation direction of these education stocks has been clarified and can be summarized into education enterprises related to K12, vocational education, and overseas activities. K12-related education businesses can be divided into quality education, after-school program, tutoring for returning students, and more, aimed at original K12 customers.

SEE ALSO: New Oriental Education Shuts Down K9 Education at Beijing Foreign Language School

51Talk will internationalize its existing activities. In the fourth quarter of 2021, the company’s net cash income from overseas operations reached $2.9 million, and it is estimated to be between $4.4 and $4.6 million in the first quarter of this year. year.

Comments are closed.