FAST NEWS: Youdao Revenue Jumps 55% in Q3 Amid Diversification Drive

The latest: Online tutoring services provider Youdao Inc. (DAO.US) announced its revenue grew 54.8% year-on-year to 1.4 billion yuan ($215 million) in the third quarter. Meantime, its net loss narrowed sharply by 85.3% to 129 million yuan. Looking up: The company’s revenue from learning products grew 56% to 255 million yuan on strong growth for its smart learning hardware business. Revenue from its learning services also soared by 65.9% to 996 million yuan. Despite recording a loss for the quarter, the company’s loss margin from operations fell sharply to 9.3% from 99.8% in…

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Hailiang Education Walks Fine Line Between Growth and Raising Regulatory Ire

Company reports 38% profit growth for latest fiscal year, but its shares slip as it faces numerous regulatory challenges Key takeaways: Hailiang Education has reported solid revenue and profit growth for its latest fiscal year before sweeping regulatory changes took effect Company’s high-growth after-school tutoring services are likely to take big hit from regulatory changes, as future uncertainty weighs on its shares By Warren Yang Hailiang Education Group (HLG.US) is shaping up as a solid bet to survive China’s ongoing crackdown on privately-funded educators. But to stay that way it…

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FAST NEWS: New Oriental Suspends K-9 Curriculum-Based Classes, Sees Revenue Hit Up to 60%

The latest: Educational services provider New Oriental Education & Technology Group Inc. (9901.HK; EDU.US) announced plans to terminate its primary school curriculum-based tutoring services for students from kindergarten to 9th grade in all of its learning centers nationwide by the end of this year. Looking up: The move will put the company in compliance with new regulatory steps to rein in the after-school tutoring business, which will reduce the risk of future policy supervision. The company will use the pivot to explore new business opportunities such as test preparation and adult language…

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As After-School Tutoring Cleanup Wraps, 17 Education Looks Set to Stay the Course

Company announces a modest share buyback and reverse share split, signaling it intends to try to maintain its business and New York listing Key points: 17 Education has announced a $10 million share buyback and 4-for-1 reverse share split that will bring its stock price to around $4, based on its latest close Company currently gets more than 98% of revenue from K-12 after-school tutoring that for-profit companies can no longer offer following a government cleanup  By Doug Young With much of the regulatory uncertainty now out of the way,…

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FAST NEWS: Koolearn Forecasts Losing Up to 40% of Its Revenue After Education Cleanup

The latest: Koolearn Technology Holding Ltd. (1797.HK) said it will stop offering after-school tutoring services for kindergartners to ninth-year students (K-9) for academic subjects included in China’s compulsory education system. The Hong Kong-listed online arm of education giant New Oriental (EDU.US) said the cessation will take place by the end of November, according to a statement released after markets closed on Monday. Looking Up: The move, a response to China’s ban on such classes by for-profit companies, will remove a huge overhang for Koolearn, allowing the education services provider to…

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China East Education Shifts Into Conservative Spending Mode

Company discloses a go-slow program for spending $233 million in its coffers earmarked for development of five regional operating centers Key takeaways: China East Education has revealed it could take as long as 10 years to spend $233 million in remaining funds from its 2019 IPO earmarked for development of five regional centers Company’s conservative spending mode may reflect caution as it awaits results from China’s ongoing overhaul of its private education sector By Doug Young What do you do when the outlook for your industry looks extremely murky due…

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Gaotu Urges Investors to See Education Cleanup as ‘New Beginning’

Company says it will focus on professional education and more holistic learning courses going forward Key takeaways: Gaotu discloses K-12 education services targeted in government education cleanup accounted for 94% of its revenue in three months through June Company says it will focus on education for adults, test preparation and holistic-oriented ‘STEAM’ learning in the future By Doug Young Think of it as a new beginning, rather than the end, of an era. That was the message coming from former education powerhouse Gaotu Techedu Inc. (GOTU.US) in its latest financial…

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Youdao Offers Diversification Lesson as Education Crackdown Climaxes

Online tutoring services provider’s shares have rallied more than 30% since it reported big jumps in revenue across all business segments in the second quarter Key takeaways: •      Youdao’s revenue more than doubled in the second quarter from a year earlier, with all business segments performing strongly •      The results came as China cracks down on after-school tutoring services that account for less than half of Youdao’s revenue By Warren Yang Online tutoring services provider Youdao Inc. (DAO.US) is offering a real-life lesson on the virtues of diversification, as many…

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Education Crackdown Creates ‘Zombies Companies’ in Need of Transformation

Beijing municipal government’s new rules requiring non-profit status for after-school tutoring firms marks group’s latest setback Key points: Beijing has become the first major city requiring all after-school education companies to become non-profits, according to announcements from the companies Companies are unlikely to be shut down, but may have to sell core assets and look for new businesses to take advantage of their core skills and technologies  By Doug Young China’s bustling crowd of after-school tutoring providers are increasingly looking like field of “zombie companies.” That’s one key takeaway from…

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Education Stocks Could Offer Bargains – For Those Who Choose Correctly

Massive selloff saw Chinese educator stocks fall as much as 70% on Friday on fears government could ban them from operating for profit Key points: Latest government ‘opinion’ document could ban private after-school education companies from operating on for-profit basis Policy is likely to meet with industry pushback, and also protest from parents who see it as too extreme By Doug Young This week may look like any other for most people, but it has turned into a sudden life-or-death situation for many of China’s private education companies. The group…

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