The Fall of Chinese Training Stock
Following the Chinese government’s announcement of tightening regulations on “outside the classroom training”, Chinese education stock prices sharply dropped at the end of July. The stock price of some Chinese education companies, mostly in “outside the classroom training”, dropped as much as 70% overnight. Some listed companies are facing forced withdrawal from the US stock market as they no longer meet the basic requirements in terms of assets value, PL status and number of shareholders. This movement has been seen as a necessary “cool down” of China’s overheated out-of-classroom training industry by some. Despite COVID, there were 84,000 new training entities established in China in 2020 and nearly 50,000 new entrances in the first 5 months of 2021.