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US-listed Chinese edtech stocks plunged a combined 48%, dropping for the third day in a row after China stressed the need for regulations for both online and offline after-school training institutions.
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The Chinese government made the remarks at a meeting on friday, according to a Xinhua report. The announcement led to the plunge in the share price of GSX techedu (GSX:NYSE), TAL Education Group (TAL:NYSE), New Oriental (EDU:NYSE), China Online Education Group (COE:NYSE) and OneSmart International (ONE:NYSE) – by 12.05%, 17.11%, 18.29%, 19.16% and 10.45% respectively.
The meeting reviewed and adopted guidelines on assessment mechanisms for advances in science and technology and to deepen pricing reforms in medical service issues, along with other suggestions such as on deepening reforms of the compensation system for ecological protection and on strengthening the protection and inheritance of historical culture in urban and rural development.
At the meeting, President Xi Jinping called for better use of the assessment mechanisms to stimulate enthusiasm among science and technology personnel and early achievement of technological self-sufficiency.
He demanded efforts to give full play to the main role of schools in teaching and education while stressing the need to regulate after-school training institutions both online and offline.
This policy could completely prevent new learning center expansion, advertisement and price hikes, according to Credit Suisse analyst Alex Xie. However, it would have a limited impact on New Oriental's FY22 earnings estimate. Xie sees 'relatively low risk' exposure to the new regulation in the K12 tutoring sector.
The Influence of Leadership Change in Latin American Countries on Chinese Enterprises(One)
Sep 04, 2024 09:50 PM
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Sep 04, 2024 08:37 PM