From Jacky Wong at the WSJ:
It has been a bad year for many Chinese education stocks. Hong Kong-listed school operator China Maple Leaf Educational Systems has lost two-thirds of its market value since June last year, while shares of New York-listed Bright Scholar Education have halved over the same period.
…China’s education market does look promising. The country has 1.4 billion people, income is rising and parents are willing to splurge whatever it takes to ensure a good education for their children. Yet the sector—especially in basic education—is also highly sensitive for Beijing. The Chinese government has every interest in ensuring both that children aren’t fed politically wayward ideas and that parents aren’t upset by sky-high school fees or other evidence of profiteering.
Some companies have tried to diversify away from China. Bright Scholar, for example, has acquired two boarding schools in the U.K. and CATS Colleges, an international school network, in recent months. But it is unclear how good they are at running businesses outside of China.
There are still bright spots in the sector. Shares in New York-listed New Oriental Education, which offers after-school tutoring as well test-preparation courses, hit a record high last week.
Companies like Bright Scholar are trying to show the gov’t that they’ll do just about anything, in hopes of favorable private school regulations later this year, and therefore to get their stock price back on track. See this press release from a couple weeks ago:
FOSHAN, China, Aug. 21, 2019 /PRNewswire/ — Bright Scholar Education Holdings Limited (“Bright Scholar,” the “Company,” “we” or “our”) (BEDU), the largest operator of international and bilingual K-12 schools in China*, yesterday announced that it has entered into agreements with National Center for School Curriculum and Textbook Development (“NCCT”) and National Institute for Curriculum and Textbook Research (“NICTR”), to jointly establish a research base for fundamental education curriculum reform.
Under this agreement, the partners will collaborate to explore new ideas and build a classic example in advancing quality education as an ongoing initiative to deepen reforms in China’s national curriculum.
Translation: While we have no genuine desire for the gov’t to guide our curriculum, if it’ll make you happy, please go ahead and tell us all your ideas…just help us get our stock price back up!