(Yicai Global) Jan. 18 — Shares of Koolearn Technology Holding plunged despite the Chinese education technology firm swinging into the black in the first half of its fiscal 2023.
After sinking by as much as 11.4 percent this afternoon in Hong Kong, Koolearn [HKG: 1797] ended 8 percent lower at HKD61.90 (USD7.91), while its biggest shareholder, New Oriental Education & Technology Group [HKG: 9901], fell 7.6 percent to HKD31.50. New Oriental’s New York-listed stock [NYSE: EDU] slumped 12 percent yesterday to USD37.53.
Net profit was CNY585 million (USD86.3 million) in the six months ended Nov. 30, versus a net loss of CNY544 million a year earlier, according to Koolearn’s financial report released yesterday. Revenue soared 266 percent to CNY2.1 billion (USD309.8 million).
Growth was mainly driven by major progress in the firm’s strategic shift to self-operated products and e-commerce live-streaming from online education. Revenue from Oriental Select, Koolearn’s live-streaming studio, accounted for 85 percent of the total.
Koolearn set up Oriental Select in the fiscal year 2022 to sell farm produce, daily necessities, and books through live broadcasting on Douyin, TikTok’s sister app in China, Tencent Mall, and other social media platforms.
Most of Koolearn’s CNY4.8 million gross merchandise volume came from Douyin, with 70 million paid orders for third-party and self-operated products in the first half of fiscal 2023, the company added. Koolearn has more than 35 million followers across six accounts on the platform.
The number of students enrolled in Koolearn’s college education segment rose 14.5 percent to 315,000 between May 31 and Nov. 30 from the same period a year earlier. Revenue from institutional clients was CNY19 million (USD2.8 million), down 43 percent.
Koolearn’s board has proposed changing the firm’s name to East Buy Holding to better align the company with its current and future business direction, according to a filing with the Hong Kong Stock Exchange on Jan. 5.
“Our current name does not fully encompass all of our current business lines and the brands that we are best known for with our customers and in our primary location of operations, being Mainland China,” the board said.
“As part of our Group’s reassessment of our business focus and strategic direction, we recognize a shift in our focus towards live-streaming e-commerce and the potential for growth that this area brings to our Group in the long term,” it said.
Editors: Shi Yi, Martin Kadiev