Chinese Edtech Firms Down As Home Country May Tighten Rules

© Reuters

By Dhirendra Tripathi — New York-listed shares of Chinese private tutoring companies looked like extending their losses for the second consecutive session on fears of a toughening regulatory landscape in the home country.

TAL Education (NYSE:), New Oriental Education & Technology (NYSE:) and Gaotu Techedu (NYSE:) were down 4.2%, 2.6% and 4.6% respectively in Thursday’s premarket session. They posted double digit losses a day earlier.

A Reuters report Wednesday said the new rules, which aim both to ease pressure on school children and boost the country’s birth rate by lowering family living costs, could be announced as early as next week and take effect next month.

A trial vacation ban, which adds to plans to bar online and offline tutoring on weekends during term time, could deprive tutoring companies of as much as 70%-80% of their annual revenue, the Reuters report said.

The trial ban means barring both online and offline tutoring over summer and winter holidays in Beijing, Shanghai and other major cities.






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