Author | Tang Fei
Edit | Bell
The new expensive byte jump of the Internet has also failed to withstand the pressure of the "double reduction" policy and began to lay off staff substantially.
Prior to it, the share prices of a number of listed companies specializing in K12 online education have fluctuated sharply under the influence of the policy.
On July 26, the General Office of the CPC Central Committee and the General Office of the State Council issued the opinions on further reducing the burden of homework and out-of-school training of students in compulsory education (hereinafter referred to as "opinions"). In response to a reporter's question on the "opinion," a relevant responsible person of the Ministry of Education pointed out that the overall goal of the "double reduction" work is to reduce the burden, but this time it is clear that "within one year, the heavy homework burden of students, the burden of out-of-school training, family education expenditure, and the corresponding energy burden of parents will be effectively reduced, and all burdens will be significantly reduced within three years. "
Under the influence of the expectation of the double reduction policy, some large education companies, which were expanding rapidly last year, are adjusting themselves through layoffs, optimization and transformation to ensure that they can continue to operate.
1. A difficult pullback
After the announcement of the "double reduction" policy, the capital market reacted most directly.
On July 23, before the policy was officially issued, the share prices of the leaders such as New Oriental Education & Technology Group opened a sharp decline model. On the same day, New Oriental Education & Technology Group Hong Kong shares plunged 50% in intraday trading, closing down 40.61% at HK $30.2 per share, while New Oriental Education & Technology Group online fell 28%. Among the US-listed Chinese stocks that opened subsequently, Gaotu Techedu Inc. Group fell more than 63%, NetEase, Inc youdao fell more than 43%, NetEase, Inc English fell more than 40%, education fell more than 38%, and Zhangmen Education fell more than 35%.
After a weekend of brewing, Hong Kong A-share education stocks continued to plunge collectively when trading opened on July 26.
By the close of trading on the 26th, Hong Kong stock New Oriental Education & Technology Group was down 47.02%, New Oriental Education & Technology Group online was down 33.45%, Civic Education was down 45.45%, Excellence Education Group was down 42.45%, and the share price was less than HK $1.
In the A-share market, Doushen Education issued an announcement early in the morning, saying that in view of the fact that the company's existing large language learning service business income accounted for an increasing proportion of the company's operating income year by year, the "double reduction" policy would have a significant adverse impact on the company's operating income and profits. the company's share price immediately fell to the limit. Although Zhonggong Education announced that "the company did not carry out out-of-school training in the K12 phase, which does not have a significant impact on the company's main business," the share price of Zhonggong Education still fell by the limit.
For a moment, the market talks about the change of color in education. it seems that as long as the company with the word "education", whether it is a discipline training institution or not, its share price will fall first.
After another week of adjustment, the share prices of most education stocks have pulled back. as of the close of trading on August 6, Hong Kong stock New Oriental Education & Technology Group online closed nearly 24 per cent lower than on the 26th, while thinking music education pullback exceeded 46 per cent. Among the US-listed stocks, TAL Education Group pulls back nearly 33%, Gaotu Techedu Inc. Group pulls back more than 27%, NetEase, Inc youdao falls back 13%, New Oriental Education & Technology Group pulls back 8%, and education pullback 7%. In the A-share market, Doushen Education also adjusted back by 1%.
Between a fall and a rise, the panic caused by the news was released.
Looking back on the past year, the experience of the education unit can be said to have changed from heaven to hell. At the beginning of 2020, affected by the COVID-19 epidemic, local governments issued guidance on "suspension of classes and non-stop learning". For a time, the number and duration of online educational institutions increased, and online courses became the "darling" of the industry. The share prices of New Oriental Education & Technology Group, youdao, CHINA ONLINE EDUCATION GROUP and Gaotu Techedu Inc. Group (then known as "who to learn from") ushered in a big rise, and Yuanfudao and homework gang among the unlisted enterprises also received a number of financing within a year.
However, it took only a year for the whole industry to run blindfolded to an abrupt halt. Since June this year, news of layoffs on online education platforms such as Zhangmen Education, Gaotu Techedu Inc. Group, Pea thinking and vigorous Education has occurred one after another, and some experts predict that the hot K12 education will enter a long dormant period.
two。 Can change the business, not the pressure.
Under the heavy hammer, the "opinion" has also given the domestic education industry a beacon of reform.
Specifically, there are three major directions of reform: first, to return basic education to the status of taking the school as the main body, so as to avoid the pressure of early selection and examination of young students; second, to put the comprehensive qualities such as ideological and moral character and patriotic education in a more important position; third, vocational education is moving towards the same important position as general education.
Under the guidance of this direction, with the deployment of the work around the double reduction in various places, the window for the adjustment of educational institutions is getting shorter and shorter, and rapid adjustment is a choice that every institution must make.
At the end of July, Yuanfudao, a K12 unicorn enterprise, announced the transformation of quality education and launched the scientific enlightenment education product "Pumpkin Science". The product was jointly built by Yuanfudao and the original zebra R & D team and began trial operation in May 2020. most of its users are introduced by seed users.
A month ago, TAL Education Group's children's English brand "Libu English" changed its name to "Libu" and launched the offline learning space-Libu Children's growth Center. After the brand upgrade, Li step weakens children's English attributes and further expands the category of quality education products, including English drama, eloquence, aesthetic education, calligraphy, wisdom, chess and so on. On July 7, TAL Education Group integrated three sub-brands, namely, the Light Boat postgraduate entrance examination Group, the full score in 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 the 13th, TAL Education Group launched the after-school care brand "Bixin". Its main business is to provide after-school pick-up, meals, homework, independent promotion and other services from Monday to Friday.
New Oriental Education & Technology Group has also transformed into quality education and off-campus trusteeship services. New Oriental Education & Technology Group set up a new subsidiary, Yunnan New Oriental Education & Technology Group Education and training School, in Yunnan, covering campsite services, sports competition organizations, retail rental of sporting goods and equipment, and off-campus trusteeship services in primary and secondary schools.
A number of A-share listed education companies recently announced that they will adjust the focus of their business, among which Onli Education will increase the expansion of business in the fields of vocational education, international and basic education, and quality education; University Education plans to provide quality, science and technology and other course products and teaching services at the stage of compulsory education, and explore business in vocational education and other areas.
Excellent Education, on the other hand, has launched a series of quality education brands, such as excellent Chinese, excellent creators, thinking Planet, and so on. and in go, dance, art, calligraphy, football, basketball, badminton and other areas of quality education.
In addition to the transformation to the field of quality education, some companies have set their sights on the vocational education market. Gaotu Techedu Inc. 's official website has been labeled as adult education, and now has subdivided tracks such as practical English, Japanese, accounting, civil servants, teachers, medical examinations, postgraduate entrance exams, CET-4 and CET-6 and IELTS.
Byte jump also extends the educational business to the field of postgraduate entrance examination and textual research. It is reported that on May 6, byte bought a stake in the learning service platform for college students, "Learning Xiaoyi", and completed the upgrade of "Learning Xiaoyi" and added services such as "online course expansion" and "textual Research Learning".
However, this transformation is not achieved overnight. Wang Qinglin, director of Shandong Taishan Educational Innovation Research Institute, said, "No matter which direction you transform, you will face huge difficulties because of the transformation of the original core products. The corresponding personnel and organizational structure are faced with major adjustments, and costs and risks soar. "
The transformation is also faced with another direct problem-the shrinking market space. According to the data of Deloitte, the market size of China's K12 education industry is 2.9 trillion yuan in 2020. According to the data from iResearch Consulting, the market scale of quality education and vocational education in 2020 is 324.1 billion yuan and about 600 billion yuan respectively, and the sum of them is only a fraction of the scale of K12.
The overall plate is smaller, but there are a lot of players, and the future competition may be as fierce as that of K12.
In other words, they can never return to the glory of the past.
3. Summary
In the Peach Blossom Fan written by Kong Shangren in the Qing Dynasty, there is a saying that "seeing him rise Zhu Lou, watch him feast guests, see his building collapse." "
In the past two years, online education has also experienced a thrilling experience of "rising Zhu Lou" and "Building collapse". Now, with the pullback of most education stocks, after the panic, the market has gradually returned to rationality.
There is a saying that "others fear I am greedy". At a time when the whole industry is facing structural adjustment, some institutions see it as the best time to enter. Guoxin Securities pointed out in the research newspaper that it is optimistic about the future development of the vocational education sector, and suggested that attention should be paid to the transformation of teaching and training leaders, saying that now is a good opportunity for layout.
However, what investors need to think about and pay attention to is that these companies that have survived the fierce market competition, have excellent abilities in all aspects, have considerable brand influence and accumulate resources, what are the development opportunities after the transformation, and whether the prospects match the current pricing? Can it form new business, new logic, new appearance and new investment opportunities?
For any enterprise, transformation is a great challenge, which requires considerable determination and courage, as well as certain opportunities and cycles. We will also continue to pay attention to the performance reports and related developments of various companies.