Reporter Li Zhu and Liu Wang report from Beijing.
Recently, the "Regulations on the Administration of Off-campus Training (Draft for Comments)" (hereinafter referred to as the "Draft for Comments") released on the official website of the Ministry of Education has aroused widespread concern from all walks of life.
The capital market reacted obviously, and on February 19, the A-share Year of the Dragon got off to a good start. **Education Index High**819%, among the 39 constituent stocks, 37 ** are in the red. Among them, Kaiyuan Education and Chinese ** rose by more than 20%, and All-Access Education rose by 1942%, Kede Education rose 1652%, *ST Doushen and Century Tianhong rose more than 13%. Onlly Education opened with a daily limit.
According to the China Association for Private Education, the "Draft for Comments" aims to promote the management of off-campus training in accordance with the law, and is neither "tightened" nor "liberalized". For academic institutions, the spirit of "double reduction" is still implemented, new institutions are not approved, and existing institutions are urged to operate in accordance with the law, so as to prevent flooding and create educational anxiety. For non-academic institutions, all localities can approve new institutions in accordance with regulations, strengthen daily supervision, ensure the quality of training, and promote reasonable pricing, so that they can become a useful supplement to school education.
Experts pointed out that the Draft for Comments is the first administrative regulation in China to specifically target the overall management of off-campus training, indicating that the management of off-campus training is gradually moving towards the rule of law, and has long-term applicability to regulate and protect the governance and development of the off-campus training industry. Zhang Jiayong, deputy director and researcher of the Institute of Institutions of the Chinese Academy of Education and Sciences, pointed out that this also clarifies the basic principles of public welfare of off-campus training, meets the needs of diverse cultural education, promotes the implementation of quality education, and becomes the basic positioning of school education as a useful supplement. For off-campus training institutions in the market, it is generally good. As long as there is a bottom line, abide by the rules, and be trustworthy, off-campus training institutions will have greater room for survival.
Classification management
According to the official website of the Ministry of Education, there are 20 articles in the "Draft for Comments", focusing on hot and difficult issues in the field of off-campus training governance, involving applicable objects, fees and hours, as well as the specific content of management departments and management.
Compared with the "Opinions on Further Reducing the Burden of Homework and Extracurricular Training for Students in the Compulsory Education Stage" (hereinafter referred to as the "Double Reduction") issued in July 2021, the draft clearly emphasizes categorical management. Article 2 clearly states that "the term "extracurricular training" as used in these Regulations refers to organized or systematic education and training activities carried out outside the school education system for the public, targeting primary and secondary school students and preschool children aged 3 to 6, with the main purpose of improving academic standards or cultivating interests and specialties. ”
Xiong Bingqi, president of the 21st Century Education Research Institute, pointed out that this is different from the previous rumors of "canceling off-campus training", affirming the role of off-campus training in improving students' academic level and cultivating interests and specialties. He believes that "as long as extracurricular training adheres to the positioning of school education as a supplement to school education and meets the differentiated choices and reasonable needs of the educated, it can work together with school education to provide high-quality education for primary and secondary school students." ”
The reporter of China Business News noticed that in the drafting instructions of the "Draft for Comments", the relevant expressions have also undergone new changes: for example, the qualitative education and training "become a useful supplement to school education", "face up to the training needs of parents", "clearly balance the rights and obligations of all parties", etc.
In this regard, Chu Zhaohui, a researcher at the Chinese Academy of Education Sciences, explained to reporters: "First of all, emphasizing the positioning of off-campus training as a 'useful supplement' affirms the positive role of off-campus training;'Meeting the needs of diverse cultural education' is to select subject training to meet the diverse growth and development needs of different students'Balancing the interests of all parties' is to keep the supply and demand of the market in a relatively balanced state as much as possible. Chu Zhaohui also mentioned that off-campus training, as a market behavior, naturally has market attributes, but the Draft for Comments clarifies that off-campus training needs to follow the basic principle of "public welfare".
Since the implementation of the "double reduction" policy in 2021, various education companies have begun to transform from an overly commercial operation model, and have turned to various new tracks by combining their own advantages, which mainly involve quality education, science and technology education, and intelligent hardware research and development.
Extracurricular training has also begun to focus on the essence of education, improve the quality of education and service levels, and the standards for third-party institutions to enter the campus have also been continuously improved, providing various rich and compliant resources for schools to carry out after-school services. For example, through the To G model, we provide affordable intelligent education products and services for ** and schools, and help balance high-quality resources in basic education.
From the perspective of the industry, the classification management of the "Draft for Comments" is clearer, and the future off-campus training will be classified according to disciplines and non-disciplines; Judging from the fact that the original "double reduction" document was more about non-subject education, such as "strict approval" and "strict prohibition", the expression of the "Draft for Comments" is more positive.
Relevant people in the education industry told reporters that the implementation level of various localities may gradually relax the strict management and approval of off-campus training institutions for compliant high school disciplines.
Zhang Jiayong pointed out that, to a certain extent, the Draft for Comments moderately relaxes the supervision of off-campus training, but does not put forward clear requirements for off-campus training institutions in terms of financing, investment, listing, overseas teaching materials and personnel use.
Previously, the education industry faced strict financial regulation. At the end of 2021, the Beijing Stock Exchange issued the Guidelines for the Application of Business Rules for Public Offerings and Listing to Unspecified Qualified Investors on the Beijing ** Stock Exchange No. 1, which pointed out that the issuer shall not be an enterprise engaged in pre-school education, academic training and other businesses.
It is worth noting that the new regulations also have a certain degree of flexibility, showing the characteristics of adapting measures to local conditions, not only canceling the rigid regulations on the duration and time period of training, but also handing over the decision-making power of fees to the local government, and the provincial people's first to formulate fee management measures.
Meet diverse needs
The industry believes that the new regulations put forward higher requirements for market institutions and also provide a direction for institutional transformation. On the premise of complying with policies and regulations, it is the key to the development of market institutions to continuously improve the quality of their own services and meet the needs of students and parents.
An Guangyong, an expert of the Credit Management Committee of the China Mergers and Acquisitions Association, said that the future regulatory trend is to carry out refined and rational adjustments on the basis of norms, and in the long run, it is actually to promote the healthy and sustainable development of the industry, remove bad institutions in the market, and promote educational fairness. Therefore, while "retracting", the long-term development of the industry has been rationalized and "relaxed", providing a clear development direction and space for compliant educational institutions.
Minsheng ** Research Report believes that the core of the "Draft for Comments" is to standardize and ensure the long-term governance and development of the off-campus training industry, which plays an important role in the long-term healthy development of the industry and the long-term expectations of investors.
Judging from the summer of 2023, the year-on-year growth rate of New Oriental, Good Future, and Xueda Education will reach 30% to 50%, returning to rapid growth. Minsheng believes that the underlying reason is that after the impact of "double reduction", the industry is cleared obviously, but the demand is still there, and the scale of the head enterprise, teaching and research, and financial advantages are still there, and the mismatch demand is undertaken. The cost clearance + expense optimization + increase in the utilization rate of outlets promoted the recovery of profits beyond expectations, and the summer profit margin of some companies was close to the high point before the "double reduction".
The reporter has combed through the official websites and official policies of the 12 Ministry of Education's basic education comprehensive reform experimental zones and found that the development of moral, intellectual, physical, aesthetic and labor education has become the focus of emphasis since the fall semester of 2021. Cao Zhe, Chief Investment Officer of Avenzhiluo, pointed out that at present, diversified development has gradually become an industry trend, expanding business areas, and the non-academic training market is worth paying attention to.
From the perspective of leading enterprises, New Oriental, Ape Counseling, and Good Future all have their own quality education investment layouts. For example, Wanyu Fangfei, which provides ice sports training for teenagers, has received 10 million Series A financing from New Oriental; Xueersi Shenzhen and other campuses have also changed their business scope and added training in subjects such as physical education.
The drafting instructions directly indicate that while promoting the management of extracurricular training in accordance with the law, it is necessary to face up to the reasonable training needs of parents, and put forward measures such as encouraging and supporting various extracurricular venues (institutes) such as children's palaces, science and technology museums, and museums to carry out extracurricular training, and guiding non-academic extracurricular training institutions to participate in after-school services in schools.
Zhang Jiayong said that meeting the diverse needs of cultural education can promote the implementation of quality education and become the basic positioning of school education. For such off-campus training institutions, there will be more room for survival.
It is understood that the listed education companies that carry out research trips include New Oriental, Good Future, Onlly Education, iFLYTEK, etc. Relevant financial report information shows that New Oriental's study tour business has been carried out in more than 50 cities across the country, and iFLYTEK will establish an AI research tour project in 2023.
In addition, the reporter also found that as the leading listed company specializing in research travel, the 2023 semi-annual reports of Century Mingde and ST Zhongkaiguo showed that the revenue of the two companies increased in the first half of the year79%, with a maximum revenue increase of nearly 20 times.
Yuan Yuan, a researcher and travel practitioner, pointed out that at present, science education emphasizes more on-site research and operation, and science and technology venues and scientific research sites of corresponding enterprises have become important venues for carrying this teaching service. Judging from the "research and development" that lasted from last year to this year's Spring Festival, the services provided by these venues not only promote the high-quality development of education, but also stimulate the growth of tourism and consumption.
Chu Zhaohui pointed out that public institutions such as museums, cultural centers and science and technology museums need to play a more active role, and off-campus training institutions, as commercial institutions, usually need to use their own unique advantages to cooperate with them to form complementary resources.
The new regulations mention that the relevant application for a school license shall first be defined and approved by the competent industry management authorities (science and technology, culture and tourism, sports, etc.), but the specific details are not explained.
At present, the "Regulations" are still in the consultation period. The implications of these transformations mean that educational institutions need to follow policy guidance while finding new growth points and innovation paths to adapt to changes in the regulatory environment and escalating market demands.