UPDATE: Benchmark Downgrades China Online Education Group (COE) to Hold
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Benchmark analyst Fawne Jiang downgraded China Online Education Group (NYSE: COE) from Buy to Hold.
The analyst comments "Along with our sector downgrade, we are downgrading COE from Buy to Hold. We expect the Opinions on Further Alleviating the Burden of Homework and After- School Tutoring for Students in Compulsory Education (the Opinion) released by the China government over the weekend will have a profound impact on in the AST industry and adversely change the course of the operation and the financial outlook of the industry participants. We acknowledge there is salvage value in COE stock, but its current business model could be at substantial risk engaging out-of-the- country foreign teachers, depending on if they will be defined as an Academic AST service provider. Our downgrade reflects our limited visibility on the long-term outlook on top of the uncertain timeline as to how long it will take for the dust to settle. As such, we have decided to step to the sidelines."
Shares of China Online Education Group closed at $3.80 yesterday.
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