TAL Education slumps 6% on ceasing K9 Academic AST Services by year-end

TAL Education Group slumped 6% in after hours trade last night after the company plans to stop offering academic subjects to students from kindergarten through grade nine in the mainland of China by the end of December 2021 in compliance with the opinion and applicable rules, regulations and measures.

The company expects that the cessation will have a substantial adverse impact on the Company’s revenues for the FY2022 and subsequent periods as the revenues from K9 Academic AST Services accounted for a substantial majority of the Company’s total revenues in FY21.

Chinese tutoring firm will continue to operate and develop the portion of its business that is not related to K9 Academic AST Services, and will also explore other opportunities to provide education services in accordance with relevant rules and regulations.

China imposed non-profit status on tutoring firms in July. The tutoring firms has eroded almost 90% of its value on tougher regulations.

TAL -5.7% after hours to $4.15

Author: Gaurav Batavia, Seeking Alpha