Chinese education service company should separate cram school business due to tightening regulations

As the Chinese government announced that it would tighten regulations on cram schools for elementary and junior high school students, private companies engaged in educational services would give up businesses such as cram school management and provide guidance and teaching businesses in fields other than learning. May be strengthened.¬†Analysts said yesterday about the outlook for China’s education services industry.

Following the Chinese government’s policy to require cram schools to be non-profit, the stock prices of educational service companies listed in Hong Kong and the United States, such as New Eastern Education Technology, TAL Education Group, and High School, will be on the 26th. It plummeted for two business days in a row.

Education service companies believe the new regulatory tightening will have a major impact on after-school learning services, but analysts expect some major players to take steps to reduce their impact on business. There is.

“Education service companies will have to give up their learning business for elementary and junior high school students,” said Don Lau, an analyst at Huaxing Securities.

UBS Global Wealth Management Chief Investment Officer Mark Haefele said after-school education services companies will separate businesses that provide services in line with the school curriculum and focus on other areas to avoid delisting.

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