Education Cleanup Claims First Victim as OneSmart Halts Most Operations

Board approves ‘the suspension of all of the company’s education programs and learning centers in China,’ according to statement Key takeaways: OneSmart says its board has approved a halt in operations for all of its education programs and learning centers in China Chinese education stocks are dividing into two camps of above and below $1, with day traders emerging as the driving force for the latter By Doug Young The bloodbath among education stocks that used to be some of China’s biggest rising stars on Wall Street has claimed its…

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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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Clubhouse Tech Partner Agora Gets Wings Clipped in China Crossfire

Company’s shares have tumbled more than two-thirds from a February high on concerns related to its China roots Key Takeaways: Agora’s latest quarterly results show shortfalls in its earnings and margins due to rising expenses A year after a sparkling IPO, company’s stock has been hobbled by high-profile setbacks related to audio chat app Clubhouse and education giant New Oriental By Eric Auchard Agora Inc. (API.US), the Silicon Valley-based interactive video toolmaker with Chinese roots, was riding high, growing in myriad markets that powered a quadrupling of its stock between…

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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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Investors Bet on Older, Offline Plays Among Battered Education Stocks

Embattled sector braces for reckoning day in September when all private educators will be required to have government licenses Key points: China East Education’s rally owes to its newly announced share buyback, as well as growing confidence it will suffer less impact from an ongoing sector crackdown Older players like New Oriental and TAL Education also look well positioned to weather the cleanup By Doug Young There’s nothing like a fire at someone else’s home to divert attention from your own burning house. That’s the latest message coming from China’s…

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17 Education Offers Lesson in Localization

Company posts triple-digit revenue growth in first quarterly earnings report since IPO as it transitions from do-it-yourself learning to localized classrooms By Doug Young When is 153% revenue growth just a slight disappointment? The answer: When you’re 17 Education & Technology Group Inc. (Nasdaq: YQ), which just announced its first quarterly earnings report since its IPO late last year. And those results were decidedly mixed, with the company looking for gold in a crowded field of money-losing education firms. They’re all trying to tap the wallets of millions of Chinese…

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