Dow Today – Chinese Tutoring Stocks Dive as Investors Fear Tough New Rules
By Yifan Wang
Chinese tutoring stocks dived in Hong Kong on Thursday, after the sector slumped overnight in the U.S. following reports that Beijing might soon release tough new restrictions on the booming industry.
Shares of New Oriental Education & Technology Group Inc., one of China’s largest and oldest tutoring operators, lost as much as 14%, while its online business unit Koolearn Technology Holding Ltd. was recently 3.7% lower. Tianli Education International Holdings Ltd. was last down 19%.
The sharp losses came after Reuters reported that Chinese authorities plan to launch a much tougher-than-expected crackdown on the country’s multibillion-dollar private tutoring industry, including trial bans on vacation tutoring and advertising restrictions.
The news sent U.S.-listed tutoring companies tumbling on Wednesday, with New Oriental’s New York-traded shares shedding 12% and peer TAL Education Group plunging 17%.
Beijing has been increasingly tightening its grip on the tutoring sector, as the government seeks to ease pressure on school children and reduce child-raising costs to boost China’s birth rate. The Education Ministry earlier this week opened an office to oversee after-school tutoring, after President Xi Jinping in recent months reiterated that regulators should rein in the off-campus tutoring market.
New Oriental shares in Hong Kong have dropped nearly 50% in the past three months, while TAL has shed more than 60% in New York over the same period.
Write to Yifan Wang at [email protected] Zoom.com
(END) Dow Jones Newswires
June 17, 2021 01:48 ET (05:48 GMT)
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