In addition to the industry itself, the entire capital market is also looking forward to the compliance response of enterprises.Because since the announcement of the policy, Chinese education companies have experienced a precipice decline, and their market capitalization has evaporated obviously.

Among them, TAL Education Group, whose share price once rose to US $90.96, has fallen 93.85% so far this year to US $4.40. New Oriental Education & Technology Group, whose market capitalization once reached US $31.619 billion, is currently hovering around US $3.326 billion, which is only about 10% of that at the high level. CHINA ONLINE EDUCATION GROUP, who focuses on 1-to-1 Filipino foreign teachers, has also fallen 89.71%.

This is the performance of the US education sector. Dashan Education in the Hong Kong education sector is also down 46.3%, and Excellence Education Group is down 82.56%.

All this suggests thatThe discipline training industry at the stage of compulsory education is rapidly declining.

So, how deep is the impact of this double reduction policy? Where should the transformation be explored? How will public schools and the education market work together? With these questions, 36Kr Holdings combined with the exchanges of many people in the industry, looking forward to bringing answers.

Limited access to talents and funds, and the end of discipline training at the stage of compulsory education.

From the "double reduction" policy, we can see that the extracurricular discipline training industry in the stage of compulsory education has become a key normative area. The whole document strictly controls the operating space of the subject training industry mainly from the aspects of qualification approval, capital access, school space, marketing and so on. It can be predicted that the industry venture capital boom in compulsory education from the beginning of 2014 will no longer exist, and capital actions such as listing and mergers and acquisitions will no longer be the exit path for investors and operators.

In other words, discipline training at the stage of compulsory education has been unprecedentedly restricted.

First of all, the "opinion" requires that no new off-campus institutions for subject training should be approved, and that existing institutions need to be registered as non-profit organizations. at the same time, the "opinion" also mentions that training institutions are not allowed to poach school teachers with high salaries. For the current situation of the education industry, these two points not only lock the number of practitioners in the industry to a large extent, but also limit the influx of talents.

In terms of market access funds, many discipline training institutions are also directly faced with cash flow risk.

Secondly, the opinions stipulate that all discipline training institutions shall not be listed for financing, and listed companies shall not invest in discipline training institutions through stock market financing, nor may they purchase the assets of discipline training institutions by issuing shares or paying cash; foreign investors may not hold or participate in subject training institutions through mergers and acquisitions, fiduciary operations, joining chains, using realizable interest entities, etc. In terms of the use of funds, the opinion also requires that the funds of discipline training institutions will be used in the management of training operations to clarify the non-profit nature of the institutions.

Then in the space of running a school, discipline training institutions have also encountered all-round restrictions. In terms of school time, it is required that out-of-school training institutions should not occupy national statutory holidays, rest days and cold and summer holidays. This limited time almost completely coincides with the current time of out-of-school discipline training, and the school-running space of discipline training institutions is sharply reduced.

Finally, at the marketing level, off-campus discipline training advertisements have been banned in all directions: the opinion once again clearly stipulates that all kinds of billboards and network platforms in mainstream media, new media, public places and residential areas are no longer allowed to publish or broadcast off-campus training advertisements. And primary and secondary schools, kindergartens are not allowed to carry out commercial advertising activities related to out-of-school training, primary and secondary schools and kindergartens are not allowed to publish or publish advertisements in disguised form, such as teaching materials, auxiliary materials, exercise books, stationery, teaching aids, school uniforms, school buses, etc.

In addition to K12, the double reduction New deal also puts forward clear requirements for preschool training, photo search questions, foreign teachers, and so on.

Specifically, "opinions" directly name and ban "photo search questions" and other functions that encourage students to think lazily. This is a hit for most of the K12 item bank online education products with related functions.

The use of overseas teaching materials and curriculum resources for teaching, teaching for foreign personnel abroad and online training for preschoolers have also been suspended. These related prohibition policies will directly affect CHINA ONLINE EDUCATION GROUP, VIPKID and other educational enterprises that widely use overseas American or Filipino teachers to teach online.

For online non-disciplinary training, in addition to completely banning preschool (3-6 years old) children from participating in online training, the opinion also strictly forbids offline discipline training for preschool children in the name of preschool class, preschool street succession, and thinking training class, and foreign language enlightening training is also included. These regulations will also directly affect online educational institutions that cover preschoolers.

The transformation to quality education, child care and vocational education has begun.

In fact, before and after the release of the policy, a road of transformation to quality education, adult vocational education and child care has been quietly launched in the training industry.For medium-sized and large training institutions whose main users are the C-end market, this may be their best choice.

On July 7, TAL Education Group announced the integration of three sub-brands, namely, the Light Boat postgraduate entrance examination Group, the full score of the Light Boat examination, and the Light Boat study abroad, to launch the TAL Education Group canoe brand and enter into the field of vocational education. On July 13, an official account named "Bixin Better Me" announced that Bixin after-school growth Center was coming, and it was also indicated in the official account that it was a brand under TAL Education Group. According to reports, "Bixin" will focus on children's after-school learning experience, including after-school pick-up, meals, homework, self-promotion and other services.

Also in July, New Oriental Education & Technology Group began to recruit teachers of quality education such as art and calligraphy on the official website and KANZHUN LIMITED and other recruitment channels.

In addition, the quality education industry has become eager to try because of the release of the policy."expanding disciplines" has become the key word of all kinds of quality education marketing in July. On July 17, a new media in the industry whose main audience is educational institutions launched the online quality education product design course, which focuses on how to transform the subject education products into quality education product development.

On July 20, the STEAM education brand Tongxin products also released the program expansion plan, in which the childlike innocence products directly told K12 institutions that "using the existing source of students, rapid expansion programming through short-term experience classes is the most convenient way for K12 institutions to break the situation."

Resources are gradually flowing back to public schools

Similarly, in the "opinions", a lot of safeguard measures are also put forward for after-school service, which provides a window opportunity for extracurricular training institutions to a certain extent. In particular, the business has shifted to relatively flexible small and medium-sized training institutions.

「For us, there are two main choices: the first is to enter the school after-school service, in fact, we have already started to serve the school; the second is to serve parents in need. "A director of Guangzhou offline training institution told 36Kr Holdings. It is understood that this organization originated in Guangzhou and currently has many campuses in Guangzhou. Math excellence is its advantage. Just three days before the policy was released, many students were still doing summer math training in the classroom.

The supervisor revealed that the organization of some classes in the campus is entirely based on the spontaneity of parents. "parents have this need, but if the policy is issued, it will be very difficult for new teachers in the industry. Because nowadays, it is very common for parents to work in self-organized classes, but they are mainly recognized as accomplished and experienced teachers. "the worry about the industry is more than that, and he also believes that the transformation of small institutions is relatively easy, because the main teams of small institutions are still backbone teachers, but for medium and large educational institutions, if they have not accumulated before, a sudden shift to serving B-end public schools or expanding programs may not solve the financial stress crisis in the short term.

"in medium and large institutions, teaching, research and teaching are strictly separated. The widespread use of young teachers and the use of polished courses by new teachers were once the core competitiveness of these institutions, but they will be at a disadvantage when demand returns to parents. Because parents who have the need and ability to organize classes will not choose such teachers. For the whole industry, there may not be any opportunities for new teachers. "

In addition to the direct participation of regional institutions in the after-school service of local schools, many large-scale quality education companies continue to pour into the market of serving schools.

Programming Cat, a programming education technology company, is one of them. "programming cats have long begun to provide programming education solutions for training institutions, primary and secondary schools, and other B-end business modules. at present, we are also increasing investment in the layout of B-end business modules, which has brought about some changes in income structure accordingly. Li Tianchi, founder of the programming cat, told 36Kr Holdings. "in the past, the advertising-driven, horse-racing enclosure was not a benign approach, which plunged the industry into a certain degree of vicious competition. Li Tianchi added. He believes that serving schools will become a trend in the future, but it will test enterprises' accurate grasp of the needs of schools and their understanding of the policy environment.

And this trend may also be being verified by the capital market. Some listed companies that serve the needs of school education informatization and educational equipment have not been significantly affected by the decline in education share prices, which are still up more than 10% year-to-date.