The latest: Online education company Koolearn Technology Holding Ltd. (1797.HK) said its interim loss for the six months through last November narrowed by 19.3% year-on-year to 544 million yuan ($85.9 million), according to an announcement issued late on Friday.
Looking up: The group’s total revenue for the period decreased by 15.3% year-on-year to 573 million yuan. But its costs also fell by 23.5% to 400 million yuan, mainly due to the phasing out of its K-9 business under China’s recent new education regulations.
Take Note: The company’s university education business and the number of fee-paying university students, which are not affected by the new education policy, also recorded decreases of 8.5% and 8%, respectively, mainly due to adjustments in its core products and marketing strategies.
Digging Deeper: China’s private education sector is fighting for its survival amid an ongoing regulatory overhaul that has banned for-profit companies from offering K-9 courses in core curriculum areas. Yu Minhong, chairman of New Oriental Education (9901.HK, EDU.US), Koolearn’s parent, recently said that his company will transform its business to live streaming e-commerce, among other things. Koolearn has said it is fully committed to this new business, and plans to leverage its existing online education facilities and technology to develop that area in cooperation with its parent. It has begun trying out livestreaming activities on well-known short-video platforms such as Douyin. New Oriental’s future goals include promotion of agricultural products and related products from different parts of China through its livestreaming business to help develop the nation’s agricultural industry
Market Reaction: Koolearn’s shares surged more than 14% to HK$5.25 when trading began on Monday. But the stock is still down more than 80% from its high of HK$30.05 last January.
Translation by Jony Ho
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