"Fiscal year 2022 has been a year full of challenges and opportunities," said Michael Yu.
China's private education services provider New Oriental Education (EDU:NYSE; 9901:HK) documented a downward revenue with expanded losses in its newly released financial reports for the fourth fiscal quarter and fiscal year ended May 31, 2022.
The total net revenues decreased by 56.8% year over year to USD 524 million for the fourth fiscal quarter of 2022. The decline was mainly due to the cessation of K-9 academic after-school tutoring services in compliance with the government policies in China.
The net loss attributable to New Oriental for the quarter was USD 189.3 million, compared to the loss of USD 45.5 million in the same period of the prior fiscal year.
For the fiscal year 2022 ended May 31, 2022, New Oriental reported net revenues of USD 3.11 billion, representing a 27.4% decrease year over year. The operating margin for the fiscal year 2022 further widened to -31.6% from 2.7% for the same period of the prior fiscal year.
Notably, the net loss attributable to New Oriental for the fiscal year 2022 topped USD 1.19 billion, while the giant reported an income of USD 334.4 million in the same period of the prior fiscal year.
The total number of schools and learning centers shrank to 744 as of May 31, 2022, representing a decrease 925 compared to 1,669 as of May 31, 2021.
It has been a year since the policy was formally introduced in July 2021, and the reaction is particularly obvious at the market level, with shares of publicly-listed companies in the industry, such as New Oriental Education, dropping to the bottom. The long-established language learning brand Wall Street English (Chinese: 华尔街英语) was also overwhelmed and filed for bankruptcy.
Other beaten-down Chinese for-profit after-school tutoring firms include Gaotu Techedu (GOTU:NYSE), Scholar Education (1769:HK), Beststudy Eductaion (3978:HK), New Oriental Education's online learning affiliate Koolearn Technology (1797:HK), Tencent-backed Yuanfudao and Alibaba-supported Zuoyebang.
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As of press time, its share price closed at USD 29 apeice, with a market cap of USD 4.92 billion.