On July 23, the volume of Hong Kong's online education concept stock fell in the afternoon. New Oriental Education & Technology Group-S closed down more than 40%, while Civic Education and New Oriental Education & Technology Group online both fell more than 28%.
Following the collapse of education stocks in Hong Kong, US education stocks collapsed across the board, with TAL Education Group down more than 70 per cent, Gaotu Techedu Inc. more than 60 per cent, New Oriental Education & Technology Group down more than 50 per cent, CHINA ONLINE EDUCATION GROUP and RISE Education Cayman Ltd down more than 40 per cent, 17 Education & Technology Group, OneSmart International Education Group Ltd, Zhangmen Education and Puxin Ltd down more than 30 per cent.
Emergency response from relevant companies
TAL Education Group, 17 Education & Technology Group, New Oriental Education & Technology Group and CHINA ONLINE EDUCATION GROUP all said on their website that the company took note of some English and Chinese media reports that Chinese regulators were considering a new set of regulations. it involves after-school tutoring services related to subjects taught in China's compulsory education system. In response, the companies said that the regulation had not yet been published, had not received a formal notification of the regulation, and would not comment on market speculation.
Zhangmen Education also responded that according to the media, Chinese regulators will issue new regulations to strengthen the supervision of after-school tutoring services. As of the date of this press release, the company has not received any formal notification of the new rules and regulations for press coverage. The company will pay close attention to the regulatory development of China's education industry.
Institutions: training institutions are advised to transform as soon as possible
Before the opening of Hong Kong stocks yesterday, China International Capital Corporation sharply reduced the target price of education stocks.China International Capital Corporation saidOn May 21, the 19th meeting of the Central Committee for comprehensively deepening Reform was held, which examined and adopted the opinions on further reducing the burden of homework and out-of-school training on students at the stage of compulsory education. It is expected that the follow-up of the "double reduction" policy will be published, and the standardized management of the education and training industry is unprecedented.
Subsequently, CICC chose the more pessimistic regulatory scenario as the benchmark assumption and lowered New Oriental Education & Technology Group's online target price by 70 per cent. In ADR, it lowered New Oriental Education & Technology Group's target price by 53% to US $9.2, TAL Education Group's target price by 67% to US $29, and the target price by 15% to US $29.
And for this,CITIC published a research report suggesting that training institutions should be transformed as soon as possible.CITIC said that the double reduction potential policy direction or focus on three limits: limit the number of training institutions, limit class time, limit prices. Excessive capitalization may also be limited. At the same time, by enriching the supply in the school and the reform of the mechanism of further study, we can gradually alleviate the pressure of further study in the lower age group and reduce the demand for subject training. For discipline institutions, the future policy environment may be very difficult and uncertain, so it is recommended to transform as soon as possible, and high school training and quality training are relatively easy to cut into.
It is suggested that discipline training institutions should transform or even change careers as soon as possible. We judge that the "double reduction" policy is only the starting point for standardizing discipline training in the stage of compulsory education, and there are a large number of potential supporting policies and continuous strict supervision in the future. For disciplinary institutions, we suggest the transformation to the following directions: 1) High school training: short-term or no major policy risk. 2) quality training: the policy is more encouraged. However, with the influx of capital and the gradual entry of giants, the competition for quality training may be intensified in the future. 3) Vocational education: the policy is very encouraging, but we judge that we will also supervise the advance collection of vocational training institutions in the future, and we need to make plans in advance. 4) Educational science and technology and educational informationization: bright prospects and full of opportunities.
In the aspect of educational informatizationRecommended by CICC Research Daily$iFLYTEK (002230.SZ) $And suggest to pay attention to squirrel AI (unlisted), Takagi education (unlisted),$Danghong Technology (688039.SH) $、$youdao (DAO.US) $。
Will vocational education be the next track?
In recent years, vocational education policy has continued to be positive. In June 2021, the Vocational Education Law (revised draft) was submitted to the standing Committee of the National people's Congress for deliberation. It is mentioned in the draft"Vocational education and general education are two different types of education, which have the same important status."It defines the legal status of vocational education.
In recent years, in order to alleviate the pressure of market employment, achieve high-quality employment and comply with the trend of lifelong learning, vocational education has been highly expected, and the state has successively launched a "combination of vocational education policies": in 2019, the State Council issued the National Vocational Education Reform implementation Plan ("20 articles of Vocational Education"). Recently, the "Vocational Education Law (revised draft)" was submitted to the 29th meeting of the standing Committee of the 13th National people's Congress for deliberation, providing policy and legal support for the development of vocational education; aiming at the subdivided areas of vocational education, support measures such as vocational education college entrance examination system, "1x" certificate, integration of industry and education, and school-enterprise cooperation have also been introduced one after another.
Oriental Securities said in this regard that vocational education has a bright future and a bright future.Driven by the top-level design, the equal status of general vocational education is clear, and the construction of modern vocational education system is expected to form a complete "secondary vocational, higher vocational and undergraduate vocational education training system". Under the pluralistic school-running pattern, the integration of industry and education and the cooperation between schools and enterprises have become an important driving force. No matter from the national policy and industrial characteristics, social forces play a strong role in vocational education, we are optimistic about the academic and non-academic education companies in the vocational education track as a whole.
Oriental Securities suggests paying attention to brand non-academic training.$Secondary Public Education (002607.SZ) $、$intellectual education (003032.SZ) $The ability of industry-education integration is outstandingNeusoft Education (09616.HK) $、$Hope Education (01765.HK) $、$Huaxia audio-visual education (01981.HK) $Vocational education teaching ability & excellent reputation$Chinese Education Holdings (00839.HK) $、$Yuhua Education (06169.HK) $、New higher Education Group (02001.HK) $、Zhonghui Group (00382.HK) $、$China Science Education (01890.HK) $。
Guoxin Securities (Hong Kong) believes thatThe only sector with clear policy support and clear growth in the education industry is higher education-vocational education. the final landing of the regulations on the implementation of the Civil Promotion Law and the draft career revision have laid a policy foundation for private capital to play an important role in the field of vocational education. In response to the direction of vocational education reform, but also in order to further improve the quality of running schools and the employment rate of graduates, private higher education groups can do further ploughing in the direction of industry-education integration.
The bank recommends focusing on the following companies:$Chinese Education Holdings (00839.HK) $、$Yuhua Education (06169.HK) $、New higher Education Group (02001.HK) $、Zhonghui Group (00382.HK) $、$Hope Education (01765.HK) $、Neusoft Education (09616.HK) $、$livelihood education (01569.HK) $。
Hurun, a foreigner who knows most about "Chinese entrepreneurs", once mentioned on a program a major trend in which the richest man in the education industry has changed over the past three decades:
More than a decade ago, the richest man in the education industry was Yu Minhong of New Oriental Education & Technology Group. At that time, knowing English was regarded as the core competitiveness of talents in the era of globalization. Five years ago, the richest man in education became Zhang Bangxin, who thought about learning. Thinking for the sake of learning can help children get into a good school. About two years ago, they were also surpassed, and the richest man in education became Li Yongxin of Zhonggong Education. With the changes in the internal and external economic environment, the training of civil servants has become hot.
Hoogewerf said: from the changes in the demand for education, we can have a new understanding of China's economy, from the English test to the college entrance examination to the public entrance examination, which is such a wonderful story.
At present, the education industry may face great changes, and what kind of education will take over in the future?
What subdivisions of the big education industry do you think are worth paying attention to?
You are welcome to express your views in the comments section.