Shares of China-based education companies took a beating in Friday, amid media reports that the Chinese government is mulling new regulations concerning after-school tutoring services.
Citing anonymous people familiar with the matter, Bloomberg reported that the People’s Republic of China is considering asking tutoring companies to turn nonprofit.
Following those reports, the top-10 biggest premarket decliners were littered with the U.S.-listed stocks of China-based education companies.
New Oriental Education & Technology Group Inc.’s stock
led the pack, plunging 67% ahead of the open toward a six-year low, on premarket leading volume of 139.2 million shares.
The company said it’s policy is not to comment on market speculation, but issued a statement regarding reports from both English and Chinese language media outlets that PRC regulators were considering new regulations: “The regulations have not been published, and the company has not received official notification of the regulations.”
Gaotu Techedu Inc.’s stock
was the second-biggest decliner and third-most active ahead of the open, as it plummeted 63% on 12.4 million shares. The company issued the identical statement as New Oriental Education, saying it “has not received official notification of the regulations.”
Shares of TAL Education Group
were the second-most active with 29.2 million shares traded, and tumbled 60% to be the third-biggest decliner.
Elsewhere, shares of 17 Education & Technology Group Inc.
dove 40%, China Online Education Group
dropped 31%, Youdao Inc.
sank 30%, RISE Education Cayman Ltd.
dropped 29% and Zhangmen Education Inc.
fell 27%. Bright Scholar Education Holdings Ltd.’s stock
China Online Education, 17 Education & Technology and Zhangmen Education have issued identical statements as New Oriental Education and Gaotu Techedu regarding the media speculation.
The stocks’ selloff comes as the iShares MSCI China exchange-traded fund
declined 2.7% premarket while futures
for the S&P 500 index