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COE

China Online Education Group

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About COE

China Online Education Group is a China-based company principally engaged in the provision of online English language education services. The Company operates an online education platform that provides online tutoring programs to students through the Internet. Its platform analyzes teachers' teaching aptitudes, feedback and rating from students, as well as background, and recommends suitable teachers to students according to their respective characteristics and learning objectives. The Company develops and tailors its curriculum to its interactive lesson format. The Company offers various courses, which include Classic English and Classic English Junior that are focused on the development of English communication skills. The Company also offers various specialty courses that are focused at situation-based English education and test preparation needs, such as Business English and International English Language Testing System (IELTS) Speaking.

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Market Capitalisation

$36.75M

Price-earnings ratio

-

Dividend yield

0.00%

Volume

74.06K

High today

$1.62

Low today

$1.55

Open price

$1.62

52-week high

$3.64

52-week low

$0.76


What is COE (China Online Education)?

China Online Education Group wants to help China speak with the rest of the world. Since most of us have been slow to learn Mandarin, they provide online English language education services to students in China and the Philippines. 

Also known as 51Talk,the company was founded in 2011 by CEO Jack Jiajia Huang. 51Talk is China’s largest online English education company, having developed three distinct business units to facilitate online lessons — Hello World American Academy, iNET and 51Talk Philippines.

Via their digital learning platform, AirClass, 51Talk offers one-on-one as well as group lessons. Its student curriculum is developed in-house and is tailored to give Chinese and Filipino students the ability to speak practical English.

51Talk currently operates out of Beijing, China.

Has the China for-profit tutoring ban affected COE?

Yes, the Chinese Communist Party’s (CCP) for-profit tutoring ban has severely impacted 51Talk.

Since the announcement of education sector reforms on July 24th, 2021, COE’s share price has lost more than 65% of its market value. COE’s price has dropped from US$3.36 to US$1.32 as of the beginning of March 2022.

What happened with the China ban?

As part of education sector reforms, the CCP announced that Chinese education companies were no longer allowed to raise foreign capital or even turn a profit. Effectively, all Chinese education companies now operate as non-profit organisations.

As per the Chinese Communist Party’s website:

“Curriculum subject-tutoring institutions are not allowed to go public for financing; listed companies should not invest in the institutions, and foreign capital is barred from such institutions.”

The education reforms were put in place by the CCP in an effort to make raising and educating children easier and more affordable. They also play a part in the CCP’s “Common Prosperity” program, a program designed to close the wealth gap between China’s richest and poorest.

Effects of the China for-profit ban on education stocks like COE

Since the CCP’s reforms were put in place, many other leading Chinese education company’s stocks have also plummeted over 60% in market value.

Some include New Oriental Education and Technology Group (NYSE:EDU), TAL Education Group (NYSE:TAL) and Gaotu Techedu (NYSE:GOTU).

Many of the CEOs of these companies are no longer billionaires.


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