TAL Education’s Stock Sinks Despite Extracurricular Unit Denying Mass Enrollment Report(Yicai Global) March 15 -- Shares of TAL Education Group, a leading Chinese education technology firm, slumped despite its extracurricular training arm rebutting a media report that it had restarted large-scale enrollment in contravention of government policy.
TAL Education [NYSE: TAL] fell 10 percent in New York yesterday, after earlier slumping by as much as 22 percent. In pre-market trading today, it was down a further 2 percent to USD6 as of 4.24 a.m. local time.
Xueersi did not restart mass enrollment and will continue to strictly abide by China’s double reduction policy, the Beijing-based unit said on its official WeChat account late yesterday.
The so-called double reduction policy was introduced in July 2021 to ease the burden of after-school tutoring and homework on kindergarten to junior high students. Extracurricular courses, including sports and arts, were not banned. Since China began to rectify the off-campus training sector two years ago TAL Education’s stock price has plunged over 90 percent.
An article published on financial media site Cls.cn yesterday said Xueersi had restarted mass offline enrollment of preschool children for advanced courses that were instead named ‘extracurricular classes.’ The firm also claimed to be able to help kids to upgrade from kindergarten to primary school in its advertising material, the report added.
The report was likely related to the fact that some individual training centers had used misleading course advertising materials, Xueersi added, noting that it had launched an internal investigation.
Xueersi’s off-school training business for students at the compulsory education stage was closed on Dec. 31, 2021, the firm added, noting that it also strictly requires its training centers to comply with the policies.
In the nine months ended Nov. 30, TAL Education’s net loss narrowed by over 90 percent to USD96.2 million from a year earlier, according to its latest earnings report released on Jan. 19. Revenue fell 81 percent to USD750.8 million.
Editor: Futura Costaglione
