China Said to Weigh Asking After-School Tutors to Go Non-Profit - Bloomberg

July 23, 2021 6:16 AM EDT

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(Updated - July 23, 2021 6:23 AM EDT)

China is considering asking companies that offer tutoring on the school curriculum to go non-profit, according to a report Bloomberg, citing people familiar with the matter.

The platforms will likely no longer be allowed to raise capital or go public, the report said, and listed firms will also probably no longer be allowed to invest in or acquire educations firms teaching school subjects. Foreign capital will also be barred from the sector.

The Bloomberg article states that local regulators will stop approving new after-school educations firms seeking to offer tutoring on China's compulsory syllabus and require extra scrutiny of existing online platforms. Vacation and weekend tutoring on school subjects will be banned.

Shares of New Oriental Education (NYSE: EDU), TAL Education (NYSE: TAL), and Gaotu Techedu (NYSE: GOTU) plunged overnight following the report.

Other related names include:

  • OneSmart International Education Group (NYSE: ONE)
  • Puxin Limited (NYSE: NEW)
  • 17 Education & Technology (NASDAQ: YQ)

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