Shanghai (China), Jan 10 (EFE) .- The Chinese giant of after-school education New Oriental lost 90% of its market value after the new regulations that the Chinese government approved for the sector in mid-2021, said the founder of the company, Yu Minhong, quoted today by the local press.
Less than a year ago, in February 2021, the market capitalization of the New York-listed company exceeded $ 33 billion, a figure that has now fallen to just over $ 3 billion.
New Oriental’s operating turnover fell by 80%, Yu explained in a message posted through his account on the WeChat social network that was reported in the official Global Times newspaper.
Likewise, the company spent almost 20,000 million yuan (3,148 million dollars, 2,768 million euros) in the severance pay of the approximately 60,000 employees that it dismissed, the return of the tuition fees that the students had paid or the breaking of the contracts of rental of their educational centers.
After closing a good part of his extracurricular courses, Yu assured that his company will now focus on “quality education” for segments such as university students or Chinese education abroad.
For its part, its online classes subsidiary Koolearn has opened a marketing system through live broadcasts (‘streaming’) that the company intends to use to transform itself into an electronic commerce platform focused on agricultural products, in line with the policy of “common prosperity” advocated by Chinese President Xi Jinping.
The New Oriental is one of the most representative cases of what was involved in Beijing’s regulatory campaign in the private after-school education sector, valued at up to 125,000 million dollars.
The new rules, announced in July last year, called for all companies offering this type of education on subjects taught during school hours to become non-profit organizations, and prohibited classes on holidays or weekends.
Some analysts pointed out that it was a measure to encourage Chinese families to have more children, since birth rates are decreasing in the country as the population ages, in part due to the high costs of raising children . EFE
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