Home » Under the suppression of the Chinese Communist Party, New Oriental announced that it would stop operating mainland education and training services | Yu Minhong | Dashan Education | Excellence Education Group

Under the suppression of the Chinese Communist Party, New Oriental announced that it would stop operating mainland education and training services | Yu Minhong | Dashan Education | Excellence Education Group

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[Epoch Times October 26, 2021](Epoch Times reporter Li Bing comprehensive report) New Oriental Group, China’s largest education and training organization, announced a few days ago that it will stop operating out-of-school training services for subjects in the compulsory education stage in Mainland China. Recently, under the continuous suppression of the CCP’s “double reduction” policy, many large-scale education and training institutions in China have almost been “group annihilated.”

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On October 25, New Oriental Online announced on the Hong Kong Stock Exchange that the group will stop operating subject-based off-campus training services for compulsory education in Mainland China, which are provided to students from kindergarten to grade 9 (K-9 or compulsory education) in Mainland China. The termination is expected to take effect before the end of November 2021.

According to the announcement, the board of directors expects that the termination will have a material adverse effect on the Group’s total revenue for the fiscal year ending May 31, 2022 and subsequent periods.

According to the announcement, however, the board of directors expects that the Group’s profit will be positively affected in view of losses in the K-12 business segment for the two fiscal years ended May 31, 2021. The board of directors estimates that for the two fiscal years ending May 31, 2021, K-9 business accounts for approximately 58% to 73% of New Oriental’s K-12 education division based on total revenue contribution.

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According to a report by China Business News, as of the close of trading on the 25th, Hong Kong stocks New Oriental Online fell 3.46% to HK$5.02.

Since July of this year, the CCP has issued a number of restrictions on off-campus education and training institutions, including elementary and junior high school subjects that cannot attend classes on weekends and holidays, and the conversion of elementary and junior subject education institutions to non-profit institutions before the end of the year, etc. .

On July 24, the official media such as Xinhua News Agency and CCTV announced that the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council issued the “Opinions on Further Reducing the Burden of Compulsory Education Students’ Homework and Off-campus Training” (“double reduction” policy).

After the introduction of the policy, many listed education companies such as New Oriental, Dashan Education, Excellence Education Group, Kede Education, Sigle Education, Zhonggong Education, Doushen Education, etc. issued announcements in response to the policy’s impact on their businesses.

On the morning of July 26, New Oriental stated that these measures are expected to have a significant adverse impact on the out-of-school tutoring services related to the subjects of China’s compulsory education system.

The market opened on July 26, and the education sector of the Hong Kong stock market dived collectively.

As of 10:03 on July 26, Jiemian News reported that the leading education stock New Oriental-S fell nearly 40% in intraday trading, and plunged 35.89%; on July 23, New Oriental-S plunged 50%, creating the largest single in history. Daily decline, the total market value evaporated over 40 billion Hong Kong dollars during the day.

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Since the stock price high on February 19 this year, the stock price of New Oriental-S has fallen by as much as 87.8%, and the company’s market value has evaporated by HK$239 billion.

The founder Yu Minhong holds the most shares, holding 19,750,300 shares, accounting for 12.3% of the total share capital. According to the latest price, Yu Minhong’s personal worth has evaporated by nearly HK$29.4 billion.

According to the mainland “LatePost” quoted on September 24, at the New Oriental executives meeting at 10 am on September 17, Chairman Yu Minhong announced that offline enrollment of elementary and junior high school subjects will be suspended after the fall courses. Each city will gradually close teaching sites in the future.

This move will cause New Oriental to abandon its most important source of revenue. After-school tutoring services in primary and secondary schools account for 80% of New Oriental’s revenue in fiscal 2021.

At the same time as the closure of elementary and junior high school operations, New Oriental is also laying off staff. According to news, Yu Minhong said internally that the original plan was to lay off 40,000 employees by the end of August, but as of mid-September, fewer than 10,000 employees were laid off. An executive who participated in the meeting said that the number of layoffs will exceed 40,000 by the end of the year.

Editor in charge: Zhou Yiqian#

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