Compared to parents and students in tibet, who have had to transform into live streaming and develop sidelines to boost performance in the past two years, the education industry giants undoubtedly have a deeper understanding of the changes in the education industry.

Fortunately, a document in August seems to signal a policy shift for the education industry.

Along with the success of the industry giants' performances, how much has the education industry actually recovered now?

01

During the third quarter of the summer vacation, the third-quarter performance of several long-established education industry giants like New Oriental and TAL Education is also highly anticipated.

In the third quarter of this year, New Oriental's revenue reached $0.435 billion, a year-on-year increase of 30.5%, with a net income of $0.245 billion, a year-on-year increase of 48.4%.

Excluding the east buy business, New Oriental's core education revenue also reached $1.2782 billion, a year-on-year increase of 33.5%.

Another giant in the education and training industry, TAL Education, also saw significant revenue growth.

In the third quarter, TAL Education's revenue was $0.619 billion, a year-on-year increase of 50.4%, with a net income of $57.431 million, up 51.5% from the same period last year.

Xueda Education, as well as Koolearn and Excellent Education, whose third-quarter performance has not yet been announced, have all experienced significant growth.

Xueda Education's third-quarter revenue was ¥0.63 billion, a year-on-year increase of 15.7%, with a net profit of ¥14.19 million, a 50% decrease year on year. However, this year, Xueda Education's net profit attributable to the parent company reached ¥0.176 billion, a 50.16% increase year on year.

In the first half of the year, Excellent Education's revenue was ¥0.317 billion, up 68.1% year-on-year, with a net income of ¥54.415 million, an increase of 170% year-on-year.

In the first half of the year, K12 Online's revenue was 0.399 billion yuan, a year-on-year increase of 58.8%, with a net income of 82.652 million yuan, a year-on-year increase of 92.5%.

Along with the performance recovery comes the attraction of talent.

At the end of 2022, Yu Minhong revealed that New Oriental had about 0.05 million employees. However, in August of this year, the number of New Oriental employees increased to about 0.075 million.

In the 2025 fiscal year, New Oriental will release 0.015 million recruitment demands to society, with campus recruitment demands exceeding 0.01 million.

At the end of last year, Xueda Education, with only 846 employees, increased to 1785 by the end of June this year, almost doubling.

This year, Xueda Education is expected to hold over 200 campus recruitment events, planning to recruit over 2000 people.

On various social media platforms, more and more people are choosing to 'return' to the education and training industry.

In addition to individual career choices, many people have also benefited from the heyday of the education and training industry and still believe that it is a profitable industry.

The reality that education and training people must face is that, despite the outstanding performance of New Oriental and TAL Education, not the entire education and training industry is the same.

In the first half of this year, Gaotu and Youdao still reported losses for the first half of the year.

In the first half of 2024, Gaotu's revenue reached 1.957 billion yuan, a year-on-year increase of 38.7%, but its net income changed from profit to loss, with a net loss of 0.442 billion yuan.

Netease Youdao also achieved a revenue of 2.71 billion yuan in the first half of the year, a year-on-year growth of 14.5%, but the net loss reached 0.1 billion yuan. Although it narrowed year-on-year, in the previous two quarters, Youdao's net income was positive.

In the end, behind the performance of the education and training industry's growth engine, it is no longer the traditional K12 education.

In the third quarter, New Oriental's new business revenue increased by 49.8% year-on-year, already becoming the company's new growth engine. New Oriental's new business includes quality education, ai education hardware, smart education business, cultural tourism, and more.

Data shows that New Oriental's intelligent learning systems and devices have been adopted in approximately 60 cities, with approximately 0.323 million active paying users this quarter.

And TAL Education's growth engine has also shifted to quality education products and education hardware. In the third quarter, TAL Education's literacy business revenue increased by 80%, with the revenue from after-school small classes increasing by over 100% year-on-year.

Also bringing a substantial growth is TAL Education's learning machine. TAL Education CFO Peng Zhuangzhuang pointed out at the financial report meeting that currently, artificial intelligence learning devices are TAL Education's fastest-growing business line.

According to the data from Luotu Technology, due to its higher unit price, TAL Education's learning machine has been consistently ranked first in sales in the first three quarters.

The giants in the education and training industry are seeking new paths, indicating significant differences in the current education and training industry compared to the past.

02

During the summer vacation this year in August, a document titled "Opinions on Promoting High-Quality Development of Service Consumer" mentioned that through the growth in education and training consumer spending, domestic demand would be boosted directly to promote economic growth.

It seems like the education and training industry has once again seen a springtime.

However, even up to now, the education and training sector has not regained its former glory. In fact, many extracurricular training institutions have been fined for conducting subject training without approval, with fines exceeding 0.11 million yuan for some institutions.

Looking into the reasons, this type of education and training is different from the traditional one.

What is encouraged in the document is to promote higher education institutions, research institutions, and social organizations to open up high-quality educational resources to meet the diverse and personalized learning needs of the general public.

In other words, what is being referred to here is non-disciplinary education and the education mentioned in the 'double reduction' policy, which have completely different meanings.

Nevertheless, in the specific implementation, will the relaxation of non-disciplinary education lead to a relaxation of overall supervision of educational institutions? The answer is highly likely yes.

Even if policies are relaxed, disciplinary education will inevitably face challenges.

In the year 2023 alone, more than 5600 primary schools closed. While this is partly due to the merging of township primary schools, it is clear that the trend of closures is gradually spreading.

Looking ahead to 2030, 2033, and 2036, middle schools, high schools, and universities will all face even greater enrollment pressure.

In the future, middle schools, high schools, and even universities will gradually follow the path of primary schools today. Disciplinary education, as a supplementary product of exam-oriented education, will also inevitably face a new round of challenges.

So, where is the way out for the education and training industry?

In fact, the recovery of the education and training industry this year is not entirely due to a shift in policies, but rather because the demand for education and training has only been suppressed, not completely disappeared.

For families with children, subject-specific training is undoubtedly a rigid demand. As long as the selection system of the college entrance examination exists, subject-specific training cannot completely cease.

Despite the previous "double reduction" policies causing a downturn in subject-specific training, the latest data still shows that in 2023, in China's online education sub-market, the proportion of primary and secondary school subject training still reaches 36%, occupying the largest market share, while quality education accounts for only 13%, just about one-third of subject-specific training.

Even the shares of vocational skills training and higher education training are higher than that of quality education, reaching 20% and 19% respectively.

This is because academic anxiety is almost a lifelong topic for the Chinese.

When children are young, they need to buy homes in good school districts, attend good elementary and middle schools, work hard to enter good high schools during the entrance examination, and the college entrance examination is the most important event in a person's life.

Even after becoming an adult and entering university, there are worries about further education, postgraduate entrance examinations, studying abroad, and even the need to learn vocational skills after starting work.

However, the market demand is shifting.

In recent years, the ratio of job vacancies for skilled workers in China has gradually exceeded 1.5 - for every 150 positions, there are only 100 job seekers, and the ratio for senior technicians even exceeds 2, with a gap of over tens of millions of people.

Meanwhile, the wages of blue-collar workers have been continuously increasing.

The '2023 Chinese blue-collar workforce employment research report' points out that over the past decade, the income of the blue-collar workforce has increased by as much as 225%. In comparison, over the past decade, white-collar income has only increased by 30%, which is only a quarter of the blue-collar increase.

The rise of blue-collar workers has become an increasingly close reality, and vocational education is also getting closer to us.

In March of this year, the Ministry of Education announced the establishment of 12 new specialty undergraduate colleges that have been filed, and in May, the Ministry of Education once again publicly stated its intention to establish 13 public vocational undergraduate colleges.

Cao Dewang of fuyao glass has invested billions to establish 'Fuyao Technology University' and also plans to start the first batch of enrollments this year.

In Jiangsu and Zhejiang, professional education is also being put on the agenda. The 'integration of higher vocational education and talent training reform' and the 'five-year higher vocational education' are gradually turning blue-collar workers into the backbone of small towns.

Among the share of online education, second only to academic education, it is not quality education or higher education training, but vocational skills training. This shift is the best explanation. (End of article)