Private education tycoons lose billionaires' club seatsTop News | Bloomberg and Karen Ng 27 Jul 2021
Mainland education tycoons have been hit hard by Beijing's regulatory tightening on the private education sector, with at least two of them demoted from the ranks of billionaires.
Beijing released new regulations that ban companies that teach school curriculums from making profits, raising capital or going public in an effort to boost the country's birth rate by lowering family living costs.
Gaotu Techedu founder Larry Chen Xiangdong lost his billionaire status after his wealth plunged more than US$15 billion (HK$117 billion) to US$336 million, according to Bloomberg Billionaires Index.
Gaotu "will comply with the regulations and fulfill social responsibilities," said Chen, the former school teacher who had turned himself into one of the world's richest people, on Weibo. Gaotu's counterparts listed in the Hong Kong market like New Oriental Education and Technology made similar statements yesterday.
Yu Minhong is another former billionaire. The chairman of New Oriental Education lost US$685 million.
TAL Education chief executive Zhang Bangxin's fortune also took a massive hit, falling to US$1.4 billion after shedding US$2.5 billion when the company's shares plunged.
Goldman Sachs expects revenue of the tutoring stocks to slump at least 70 percent in the next three years. Its one-year price targets on the stocks would be decreased by 78 percent on average.
Private higher education group Edvantage said the new regulations, which mainly target school curriculum tutoring institutions, would have no impact on its operation.
Its shares plunged 12 percent yesterday despite posting a nearly 50 percent jump in the revenue for the nine months ended May 31.