The Supervision Storm Of Teaching And Training Industry In Primary And Secondary Schools Continues: IPO Of Leading Enterprises Or Slowing Down, Organization Layout, Quality Education

The education and training industry is facing a continuous regulatory storm.

On the afternoon of May 21, the 19th meeting of the Central Committee for comprehensive deepening reform deliberated and adopted the opinions on further reducing the burden of students' homework and off campus training at the stage of compulsory education. As a result, the "double reduction" policy, which has attracted much attention in the education and training industry, will be officially implemented.

In the view of industry insiders, with strong supervision, especially the release of detailed rules for follow-up standardized training institutions, the survival space of K12 related training institutions may be greatly affected. On the one hand, the reshuffle within the industry has been accelerated; On the other hand, a lot of investment may turn to other educational tracks.

Affected by this, the stock prices of educational institutions listed in the secondary market fluctuated significantly. The shares of New Oriental, tal and other companies were nearly cut off, and the holdings of tal and Jinglin were also reduced in the first quarter of this year; In the primary market, the financing and listing pace of K12 online education institutions in the head slowed down, and the crazy "top" capital gradually entered the investment cooling off period.

"In 2020, K12 online education industry will grow rapidly and the investment heat of capital will be very high. At the same time, Matthew effect appeared, and the head office took most of the funds. But scale and growth alone are not enough. Leaving aside some things at the capital level, the whole K12 online education industry is far from mature. " An investment bank personage to 21 century economy report analysis says.

First of all, he said, the regulation of K12 online education is not as clear as that of traditional education institutions. Secondly, the whole market has different opinions on K12 online education. After all, a large number of enterprises are still in the state of loss at this stage. The relevant departments have issued policies, and the listing standards of online education enterprises may become higher. This is also the hope that the relevant enterprises will not be hot money for the target circle of the above market, so as to force enterprises to move towards a healthy development mode.

Regulatory storm

In recent months, the supervision of the teaching and training industry has been introduced frequently.

On March 31, LV Yugang, director of the Department of basic education of the Ministry of education, said at a press conference held by the State Council of Singapore that it would strictly examine and approve off campus training institutions, strengthen the supervision of training content, innovate the management mode of charging, standardize training behaviors, and seriously investigate and punish illegal training behaviors.

There are also a lot of punishment cases for off campus training institutions. Since May alone, the Beijing Municipal Bureau of market supervision has first imposed an administrative penalty of warning and 2.5 million yuan fine on the operation gang and ape guidance; A few days later, the Beijing Municipal Education Commission informed a number of training institutions about illegal issues, including charging fees for more than three months or 60 class hours, resuming offline courses without authorization, ending the training later than 8:30 p.m., carrying out improper advertising propaganda such as low-cost marketing and selling anxiety, and teaching content exceeding the corresponding national curriculum standards; Guangzhou market supervision and Administration Bureau has recently found out that 12 off campus training institutions are suspected of false and illegal advertisements, which will be filed for investigation and punishment according to law on the basis of further investigation of the facts.

On May 21, the 19th meeting of the Central Committee for comprehensive deepening reform pointed out that it is necessary to comprehensively standardize the management of off campus training institutions, adhere to strict governance, and strictly investigate and deal with institutions that have problems such as unqualified, chaotic management, taking advantage of opportunities to collect money, false publicity, and collusion with schools to make profits. It is necessary to make clear the charging standards of training institutions, strengthen the supervision of pre fees, strictly prohibit arbitrary capitalization operation, and do not allow conscientious industries to become profit-making industries.

On May 24, there was a rumor on the Internet that the Education Commission of Haidian District of Beijing would implement the "three no's" at the latest at the end of July: classes, disciplines and quality education training institutions will not be allowed to go on the market or advertise during holidays. Since then, China capital education shares generally fell.

On May 25, the Education Committee of Haidian District in Beijing quickly refuted this saying, but at the same time pointed out that it would continue to standardize the management of off campus training institutions, adhere to strict governance, and seriously investigate and deal with the organizations with problems such as unqualified qualifications, chaotic management, taking advantage of opportunities to collect money, false publicity, and collusion with schools to make profits.

Chu Zhaohui, a researcher at the Chinese Academy of Educational Sciences, told the 21st century economic reporter that under supervision, the various behaviors of extracurricular training institutions need to be more standardized, especially to avoid training institutions becoming capital operation platforms, but to return more to education itself. As a result, investment in education and training institutions may be reduced. At the same time, he pointed out that the following supervision will mainly focus on the implementation of the spirit of relevant policies, which will also be the focus of local work in the next stage.

IPO process of leading enterprises may slow down

In this context, K12 teaching and training institutions shuffle accelerated. For some top K12 online education institutions, the existing business form has also been tested, and slowed down the pace of listing and financing.

Take the two top online education institutions in the market as an example. In March this year, the homework group has hired Jin Bing, the former CFO of huanju group, as CFO (chief financial officer). It is generally believed that setting up CFOs is a sign of the company's preparation for listing. The company may land in the US stock market in 2021. The person in charge of the operation group told the 21st century economic report that "the company has no listing schedule.".

In February of this year, market rumors of ape coaching seeking a new round of financing of at least $1 billion, and the company may complete its listing in 2022. So far, the financing is still not the latest news exposure. In 2020, ape counseling completed three rounds of financing, with a total financing amount of 3.5 billion US dollars. The total amount of financing reached 2.35 billion US dollars. The financing amount of the two head companies accounted for 72.43% of the total financing amount of the whole industry last year.

As for whether the company delayed the financing and listing process due to policy factors, the relevant person in charge of ape guidance told the 21st century economic report that it was not clear for the time being.

The head of another online education company in primary and secondary schools, the head of education, has also had many IPO rumors in the United States. On May 20, the company officially submitted the prospectus and started IPO in the United States.

"The leader education may be that the IPO is almost ready, and it was intended to be listed this year, so no matter how the external environment changes, or according to its own pace in the IPO." A person in the education industry told the 21st century economic report that "its listing may also be driven by the capital side. No matter how bad the environment is, listing is also a way to exit."

For companies with relatively large size, such as homework help and ape guidance, considering the recent downturn in the share price of education listed companies in the United States, it is better to stick to the primary market and wait until the regulatory policy is clear before making further consideration, rather than rush to the market and face the uncertainty of valuation shrinkage.

A marketing person of an educational institution told reporters that according to the rhythm of previous years, the summer promotion war has started. When the promotion brings traffic, front-end sales, back-end head teachers and other personnel have to keep up. Now, due to the tightening of supervision, the promotion of various institutions is reducing, and it will not be able to use so many people to help traffic conversion in the future. Therefore, it is normal for a large company to adjust its personnel.

In response to the 21st century economic report, the person in charge of public relations of the operation group said that the company pays attention to the policy, complies with the law, operates well, and has no layoff plan.

Changing the track, planning the acquisition of quality education assets

In the face of the uncertainty of regulatory policies, investment institutions in the field of teaching and training as a whole tend to calm down, but there are still some hot spots in some parts.

An education industry investor told the 21st century economic report that the impact of regulatory policies on education investment is also specific. At present, there is no doubt that the primary and secondary education and K12 extracurricular counseling are most affected. "Especially in K12 extracurricular counseling, from hearing the rumors last year to the heated discussion before and after the two sessions, and now, we are waiting for the implementation of regulatory policies, and basically no more continuous investment." He said. He said that quality education projects such as "music, sports and beauty" will have more development opportunities. Because of the extra student time and market capital, we always have to find new places. However, they are also afraid that the supervision is too strict and the quality education project will be "hurt by accident", so most people in the industry are still waiting.

In addition, for the projects of vocational education, diploma education and education informatization, they are less affected by policies, but may have more advantages.

According to the statistics of the 21st century economic report, the financing enthusiasm of K12 teaching and training field has been greatly reduced this year, but there are still large amount of financing completed in the quality education direction of music, art, sports and programming, as well as vocational education, public examination training, and education informatization.

For example, in the direction of quality education such as music, sports and beauty, in January this year, we completed the b-round financing of 100 million yuan. In February, art treasure completed more than $40 million in round B financing. In March, beige education completed a round of financing of RMB 300 million. In the direction of adult education, chalk.com, a public examination training institution, completed a round of financing of 390 million US dollars in February this year, and curriculum education of vocational education and training institutions completed nearly 100 million yuan round B financing in May this year.

It is worth noting that many leading companies of K12 discipline education track have gradually entered the field of audio, sports and aesthetic quality education while following the policy direction and ensuring the compliance of existing business according to law. It is understood that the enlightenment products of ape guidance, vigorous education and headmaster education have been launched into quality courses such as art courses and music courses.

"We are really looking for ways to extend to the direction of quality education. In addition to setting up teams and stepping up relevant business layout, some head companies are also communicating with each other in the process of merger and acquisition of quality education companies." The investors told the 21st century economic report.