Aug 03, 2021 09:07 PM

Chinese Tutoring Firms Cancel Earnings Releases Amid Regulatory Crackdown

A New Oriental school in Shanghai on Aug. 22, 2018. Photo: VCG
A New Oriental school in Shanghai on Aug. 22, 2018. Photo: VCG

Two of China’s largest U.S.-listed private tutoring firms have cancelled the release of their latest earnings reports, after Beijing radically altered the landscape with new regulations that will ban many in the sector from making a profit.

New Oriental Education & Technology Group Inc., the Asian nation’s biggest private tuition provider, and TAL Education Group both said on Friday that they had cancelled the disclosures and calls with investors “in light of the recent regulatory developments.”

Neither company provided specific reasons for the move. New Oriental previously said it would release its report for the fourth quarter of last year on Tuesday in the U.S., while TAL said it would disclose its results for the first quarter of its fiscal year, which starts in March, on Thursday.

More than $100 billion has been wiped off the market value of Chinese education stocks since the government announced sweeping new regulations last month that require private tuition firms to register as nonprofit entities and restrict the scope of their business.

The proclamation comes alongside other crackdowns that have also ensnared technology firms like ride-hailing giant Didi Chuxing, gaming monolith Tencent Holdings Ltd. and e-commerce titan Alibaba Group Holding Ltd.

The new rules also ban local authorities from approving new private education firms that teach primary and secondary school subjects, bar existing companies from conducting share sales and restrict flows of foreign capital into the sector.

The move has plunged China’s freewheeling private tuition industry into turmoil, with some companies responding by laying off staff and frantically expanding services that are likely to be unaffected by the rules.

In a sign of how the regulations will work in practice, the State Council — China’s cabinet — said on Friday that the ability of provincial governments to reduce the study burden of children in primary and secondary schools would factor into overall assessments of their educational work.

Local officials will also be expected to manage how much time children spend doing homework assignments, sleeping, using mobile phones, reading and taking exercise, the State Council said in a policy plan.

The price of New Oriental’s and TAL’s New York-listed shares have respectively plummeted by 66% and 72% since July 22, the last trading day before the rules were released. New Oriental closed down 3.98% on Monday at $2.17, while TAL closed down 3.79% at $5.84.

Neither company responded to Caixin’s requests for comment. Both previously said they would comply with the regulations.

A spokesperson for rival firm Gaotu Techedu Inc., which is also listed in New York and has declined by 68% since July 22, said the company had not confirmed any details of its next earnings release.

Contact reporter Matthew Walsh ( and editor Flynn Murphy (

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

You've accessed an article available only to subscribers
Share this article
Open WeChat and scan the QR code
Get our CX Daily, weekly Must-Read and China Green Bulletin newsletters delivered free to your inbox, bringing you China's top headlines.

We ‘ve added you to our subscriber list.

Manage subscription
Caixin Biz Roundup: China’s Door Will Only Open Wider, Liu He Tells Davos