SINGAPORE (Reuters) - China is considering asking tutoring firms to turn non-profit as part of a sweeping crackdown on the $120 billion industry, Bloomberg reported on Thursday, citing anonymous people familiar with the matter, pushing shares in the sector sharply lower.
The Bloomberg News report https://www.bloomberg.com/news/articles/2021-07-23/china-is-said-to-mull-turning-tutoring-firms-into-non-profits said that under rules being considered but which may change companies that offer tutoring could be asked to eschew profits and could be forbidden from raising capital or going public.
The sector is under scrutiny as part of a push to ease pressure on school children and the cost burden on parents.
Reuters reported in June that authorities were set to announce measures including trial bans on tutoring during summer and winter holidays.
Tutoring stocks tumbled on Friday, with Hong Kong listed shares of New Oriental Education and Technology Group falling 40% to its lowest since listing last year and shares in New York-listed TAL Education Group (NYSE:TAL) and Gaotu Techedu Inc roughly halving in pre-market trade.