Edited by Everbright Securities: the potential impact of the draft of the regulations on the implementation of the Civil Promotion Law on the private education industry-- comments on the policy of the private education industry"
Editor's note: under the influence of the policy, some Hong Kong education stocks fell more than 30% on Monday. Wise Vision Education announced that the company currently expects that the "revised draft" will not have any significant negative impact on the group, and the share price rebounded today.
Source: Futu Securities
Background of the event:On August 10, 2018, the Ministry of Justice promulgated the regulations on the implementation of the Law of the people's Republic of China on the Promotion of civilian-run Education (revised draft) (draft for review), which was studied and drafted by the Ministry of Education. The implementation regulations (draft for soliciting opinions) published on April 20, 2018 were further revised.
1. The influence of policy change on diploma education.
In the new content of Article 7 of the draft for Review, it is clearly stated that "when public schools participate in the establishment of non-profit private schools, they shall not obtain income by means of brand export." "this change will accelerate the decoupling and restructuring of more than 60 independent schools in the form of" lieutenant colonel ".It is helpful to speed up the integration and conversion of independent colleges by private higher education companies.In addition, articles 53 and 55 of the manuscript for review sayPrivate schools enjoy certain tax and land preferential policies.
Article 12 of the manuscript for Review is added, "those who implement collectivization in running schools shall not control non-profit private schools by means of mergers and acquisitions, joining chains, agreement control, etc. "Everbright Securities believes that this is to standardize the behavior of collectivization and isolate the risk of individual non-profit schools.Or completely negate the acquisition of non-profit private schools by collectivization, which has a limited impact on the private education industry. In addition, Article 45 of the draft submitted for Review is clear.Non-profit private schools allow related party transactionsHowever, transactions with related parties need to be supervised by educational administrative departments and human resources social security departments.
2. The impact of policy changes on private training industries.
Kmur12 training institutions are managed according to discipline and quality categoriesThe discipline category is short and long, the leader benefits; the quality training policy support, the space is huge. In addition, subject training needs to be examined and approved by the educational administrative department of the people's government at or above the county level, and quality training institutions can directly apply for legal person registration.
The vocational training industry (over the age of 18) will benefit from policy dividends.The regulations on the implementation of the Civil Promotion Law (revised draft) and the draft submitted for review both mentioned that vocational training institutions can directly apply for legal person registration, and the examination and approval process of vocational training institutions has been greatly simplified. Driven by the national policy dividend, the integration of industry and education and the cooperation between schools and enterprises will be the general trend, and the vocational education industry will usher in a period of rapid development.
Photo Source: PIXABAY
3 、Summary:The market has brought some panic to the differences in the interpretation of some of the contents of the manuscript for review. Everbright Securities believes that the negative impact on private education as a whole is limited at the practical level.
4 、Risk factors:Reputation damage caused by policy risks and unexpected events
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