NYSE-listed TAL said on Saturday it “plans to cease offering academic subjects to students from kindergarten through grade nine ("K9 Academic AST Services") in the mainland of China by the end of December 2021”.
Following TAL, New Oriental announced on Sunday it will also stop providing K-9 tutoring on academic subjects across China by the end of 2021.
Both of them expect that the cessation will have a substantial adverse impact on revenues for the current fiscal year and subsequent periods because K9 Academic AST Services accounted for a substantial majority of their total revenues.
According to New Oriental, revenues contributed by the part “accounted for approximately 50% to 60% of the company's total revenues for each fiscal year”.
The two companies are struggling to explore opportunities to provide education services in accordance with relevant rules and regulations.
Zhang Bangxin, founder and CEO of TAL, said in a letter on Saturday that they will continue to serve students aged 2-18 by providing business that is not related to K9 Academic AST Services; double down on edtech development for the digital transformation of the education industry; and advance overseas business and lifelong learning.
According to New Oriental, it will “shift its focus and resources towards educational products and services that are not related to K-9 Academic AST Services, such as its test preparation courses, language training courses for adults and educational materials”.
Koolearn (SEHK: 1797), New Oriental’s subsidiary offering online education services, announced on October 25 that it will stop offering after-school tutoring on academic subjects to K-9 students.