Koolearn Photo: VCG
Chinese online education conglomerate Koolearn Technology Holding Ltd (Koolearn) has said it will stop offering subject-based off-campus training services for students in Kindergarten through 9th grade or grade 9. compulsory education in mainland China. This is the company’s latest move in its business transformation after the government introduced sweeping measures cracking down on China’s private education sector.
Such a decision was made in accordance with the new regulations and to ensure that the company’s operations are in full compliance with all applicable legal and regulatory requirements, said Koolearn, an online education company at New Oriental Education and Technology. Group Inc, in a statement opened to the Hong Kong Stock Exchange on Monday. The move will take effect before the end of November.
As the Hong Kong market closed on October 25, the company’s shares fell 3.46% to HK $ 5.02 ($ 0.64).
The services to be suspended target students in Kindergarten to Grade 9, the period of compulsory education in mainland China, which, based on the total contribution to income, accounts for 58-73% of the education segment K -12 of the company, report the media.
In the announcement, Koolearn said it will continue to operate its businesses that are not related to compulsory education in exploring new opportunities.
The board of directors expects the termination to have a material adverse effect on the company’s total revenue for the year ending May 31, 2022 and subsequent periods, according to the announcement.
In order to reduce the pressure on students and alleviate the financial cost for parents, the education department has issued relevant policies to implement load reduction measures and ban certain extracurricular tutoring classes.
Since the policy was implemented in August, the company’s shares have fallen by more than 80% and its market value has fallen by HK $ 230 billion.