The preschool education sector is under pressure across the board, with the three major education sectors of A shares , Hong Kong shares , and US stocks evaporating a market value of 15.4 billion yuan in one day!
htmlOn the evening of 15, the Central Committee of the Communist Party of China and the State Council issued an order to strictly manage private pre-school education to excessive profit-seeking, and made it clear that listed companies are not allowed to invest in profit-making kindergartens through stock market financing, and private kindergartens are not allowed to be listed separately or as part of their assets.
Affected by this, the Chinese education sector listed in the United States was the first to be under pressure. Honghuanglan Education plummeted by more than 50%, and Country Garden's preschool education stock Boshile once fell 30% during the session. Today, the A-share and Hong Kong stock education sectors were under pressure at the opening:
A-share early childhood education leader Weichuang shares hit the limit at the opening. After-hours Dragon and Tiger List data showed that it was sold by nearly 30 million by funds from two major institutions; the Hong Kong stock education sector was even more severe, Maple Leaf Education closed down 18.69%, and the four stocks, Tianli Education, Yuhua Education, Ruijian Education and 21st Century Education, all fell by more than 10%.
Faced with the sudden arrival of the policy, many listed companies in the three major markets responded urgently:
US stocks: Red Yellow Blue said that the company's management has held an emergency meeting to discuss opinions and regulations and will make strategic adjustments.
A shares: Qunxing Toys announced that it has decided to terminate the establishment of a kindergarten merger and acquisition fund and kindergarten acquisition; Hejing Technology said that the company has not directly involved in the establishment and operation management of kindergartens; Weichuang Co., Ltd. said that it is under internal research; Gaole Co., Ltd. said that the company has not invested in private kindergartens at present.
Hong Kong stocks: Tianli Education said it plans to convert six non-profit kindergartens into for-profit kindergartens; 21st Century Education said it held a special conference call on the afternoon of the 16th to express the company's position on the "Opinions".
The education sectors of the three major markets evaporated by more than 15.4 billion
US stocks Chinese education stocks were first affected. Honghuanglan Education plummeted 60% during the session, and had circuit breakers many times during the session, and finally fell 52.97% to close at US$7.83, with a market value of evaporated by RMB 1.788 billion. Boshile, a preschool education stock under Country Garden, once fell 30% during the session, and the final decline narrowed, down 16.71%, and its market value evaporated by 1.726 billion yuan. Overall, the overall market value of the Chinese education sector in the US stock market evaporated by 3.893 billion yuan yesterday.
A-share education sector was under collective pressure in the early trading, and Weichuang, the leader in early childhood education, opened at the daily limit. As of the close, the limit was not opened.
Weichuang shares after-hours dragon and tiger list data shows that the two institutional seats sold a total of 28.51 million yuan. It can be seen that in the face of policy uncertainty, institutional funds were the first to choose to escape.
In addition, Lisichen fell nearly 5%. Xiuqiang Co., Ltd., Angli Education, Tianshen Entertainment, Hejing Technology and others fell significantly in the early trading, and the intraday decline narrowed. As of the close, the decline was less than 3%. Overall, the overall market of the A-share education sector evaporated by about 2.466 billion yuan.
It is worth noting that the education sector in the Hong Kong stock market fell significantly, with Maple Leaf Education closing down 18.69%, and the four stocks of Tianli Education, Yuhua Education, Ruijian Education and 21st Century Education all fell by more than 10%. Hope Education, Bojun Education, China Chunlai, Huanglu, China Xinhua Education, and China Education Holdings fell by more than 6%. Overall, the overall market value of the Hong Kong stock education sector evaporated by about 9.067 billion yuan.
Listed companies responded urgently to
Yesterday, Honghuanglan Education once fell 60% during the session. Honghuanglan CFO Wei Ping responded urgently that there is no way to comment yet, and an emergency meeting is still being held within the internal department. But she also expressed that she had "no doubt support" for this new policy.
Today, Honghuanglan responded again that the company's management has held an emergency meeting to discuss opinions and regulations and will make strategic adjustments. The stock price may fluctuate in the short term. Whether to withdraw from the kindergarten listed capital will be waiting for further policy arrangements.
From the perspective of the A-share market, with the continuous development of the preschool education industry, many listed companies are involved in preschool education institutions, such as Weichuang Co., Ltd., Xiuqiang Co., Ltd., LED Light Technology, Angli Education, Qunxing Toys, etc. Faced with policy changes, many listed companies responded urgently.
Qunxing Toys:
Qunxing Toys issued an announcement in the morning stating that as of the date of disclosure of this announcement, the company has not invested any funds in the field of preschool education, has not invested in establishing any kindergarten merger and acquisition funds, and has not invested in the acquisition of any kindergartens, so changes in the national preschool education policy will not have any impact on the company.
In view of the company's controlling rights about to change, the national preschool education policy changes, and the company has not invested in establishing a fund and has not yet acquired a kindergarten, the company decided to terminate the establishment of a kindergarten merger and acquisition fund and kindergarten acquisition.
Hejing Technology:
Hejing Technology midday announcement stated that the company has not directly involved in the holding and operation management of kindergartens. Its current business layout is the "Smart Tree" early education cloud platform under the company's staked subsidiary Beijing Huanyu Wanwei Technology Co., Ltd. The business results of the "Smart Tree" depend on various factors such as the development status of the market and industry, the degree of execution of the business plan, and there is still uncertainty. Investors are advised to pay attention to investment risks.
Weichuang Co., Ltd.:
According to Securities Times e-company, Li Yizheng, secretary of the board and deputy general manager of Weichuang Co., Ltd., said, "This matter has a great impact on the industry. We are also studying internally. It is not convenient to publish opinions to the outside world before we understand clearly."
Gaole Shares:
Gaole Shares responded today that the company currently has no investment in private kindergartens, nor has any relevant plans to invest in private kindergartens, and the relevant regulations will not have an impact on the company's business.
Preschool education companies listed in Hong Kong also clarified today:
16 at noon, Tianli Education (01773.HK) issued an announcement: It plans to convert six non-profit kindergartens into for-profit kindergartens to comply with the opinions and requirements of the new preschool education regulations.
21st Century Education (01598.HK) held a special conference call on the afternoon of the 16th to express the company's position on the "Opinions" and clarify the company's future development direction in the field of early childhood education.
Strictly manage excessive profit-seeking of private preschool education
On the evening of 15, the Central Committee of the Communist Party of China and the State Council issued the "Several Opinions of the Central Committee of the Communist Party of China and the State Council on Deepening Reform and Standardizing Development of Preschool Education", which clearly stated that listed companies shall not invest in profit-making kindergartens through stock market financing, and private kindergartens shall not be listed separately or as part of their assets.
In terms of the capital market, in order to curb the excessive profit-seeking behavior of private kindergartens, the "Opinions" put forward five major requirements:
1. Social capital shall not control kindergartens and non-profit kindergartens organized by state-owned assets or collective assets through mergers and acquisitions, entrusted operations, franchise chains, using variable interest entities, agreement control, etc.; if the regulations have been violated, the education department shall work with relevant departments to clean up and rectify, and shall not increase capital and expand shares before the cleanup and rectification is completed.
2. For-profit kindergartens participating in mergers and acquisitions, franchise, and chain operations should file the agreements signed with relevant interest enterprises with the education departments at or above the county level and announce them to the public; local education departments should strictly review the qualifications, directions of management, curriculum resources, quantity and scale of management capabilities of relevant interest enterprises and kindergartens. In principle, for-profit kindergartens that implement franchise and chain activities should obtain provincial demonstration kindergarten qualifications.
3. Changes to the kindergarten control entity or brand franchise entity must be approved by the education department of the district and county where they are located. The organizer must go through the approval and registration procedures in accordance with regulations and perform asset delivery in accordance with legal procedures. When the kindergarten to which it belongs has problems in safety, operation, management, quality, finance, assets, etc., the organizer, actual controller, and the management agency responsible for the kindergarten operation shall bear the corresponding responsibilities.
4. Private kindergartens are not allowed to be listed separately or as part of their assets.
5. Listed companies are not allowed to invest in profit-making kindergartens through stock market financing, and they are not allowed to purchase profit-making kindergarten assets through issuing shares or paying cash.
CICC interprets the listing ban on private kindergartens, saying that private schools, especially private schools, have always been the focus of investors' attention. In this opinion, the requirement of private kindergartens to "can be classified, cannot be listed, and cannot be controlled by VIE structure" exceeds market expectations.
CITIC Securities analyst Jiang Ya believes that there is a mandatory change in the early childhood education assets held by existing listed companies. From the principle of not retrospectively speaking, there is a high probability that the early childhood education groups or listed companies that have already achieved capitalization will not be delisted or divested from the relevant assets, but there is actually a probability under extremely pessimistic expectations.
Everbright Securities analyst Cao Guangyu believes that although this policy curbs excessive profit-seeking of capital, leading to the hindrance of the path to capitalization in kindergartens, compulsory education and high school stages will not be affected for the time being. The objective of the "Opinion" proposes that the coverage rate of universal kindergartens (the proportion of children in public and universal private kindergartens in kindergartens) reaches 80%. Through policy regulation, creating school conditions for universal kindergartens for 80% of children can effectively reduce the burden on residents to raise their children, thereby helping to increase the population birth rate. The opinions themselves have nothing to do with compulsory education, high school education, and university education. Therefore, there is no need to worry too much about private schools in primary, junior and high school stages.
Xinhua Commentary: Kindergarten is not to make money
Xinhua News Agency issued a statement saying that preschool education is the "shortcoming" of my country's basic education. With the increase in the gap in social demand and resource supply, private capital has entered the early childhood education industry in recent years, which has helped to a certain extent to alleviate the problem of "difficulty in entering kindergarten", but has also made the conflict between capital profit-seeking and educational public welfare increasingly appear. Because it is profitable, the early childhood education industry has become a "feast" in the capital market, and early childhood education has become the "most expensive education".
Driven by profit-seeking, kindergarten sponsorship fees, donated tuition fees, air conditioning fees, etc. are emerging one after another. "Bilingual teaching", "art expertise" and "early potential development" have become footnotes for sky-high tuition fees. The conditions for running kindergartens are worrying, safety hazards are frequent, the quality of teachers is poor, and the teacher's salary is low, so the teaching quality cannot be guaranteed.
article points out that profit-seeking should not be the pursuit of preschool education, and public welfare is one of its fundamental attributes. Accepting education in kindergarten is crucial to a person's life, and has a far-reaching impact on developing intelligence, cultivating habits and promoting physical and mental health. It also lays the foundation for school education and lifelong education, which is a major issue related to the improvement of population quality. Emphasizing the public welfare attributes of preschool education has a fundamental, overall and pioneering role in promoting the overall improvement of national quality, social fairness, and poverty alleviation.
For those who run kindergartens with the goal of making money, please choose another way. Let preschool education return to the essence of teaching and educating people, and return to the pure land of kindergarten.
This article comes from brokerage China
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