TAL Education Group Provides Update on New Regulations

Rhea-AI Summary

TAL Education Group (NYSE: TAL), a leading K-12 after-school tutoring provider in China, faces significant regulatory changes following a policy issued on July 24, 2021. The policy mandates that tutoring institutions for compulsory education must operate as non-profits and prohibits foreign ownership and fundraising for such services. TAL anticipates a material adverse impact on its business operations due to these new restrictions, which may hinder its after-school tutoring services in China. The company is committed to compliance and is engaging with government authorities regarding these regulations.

Positive

• None.

Negative

• Anticipated material adverse impact on after-school tutoring services due to new regulations.
• Prohibition on foreign ownership may affect existing business structures.
• Restrictions on capital raising for academic tutoring businesses.

BEIJING, July 25, 2021 /PRNewswire/ -- TAL Education Group ("TAL" or the "Company") (NYSE: TAL), a leading K-12 after-school tutoring services provider in China, announced that, on July 24, 2021, China's official state media, including Xinhua News Agency and China Central Television, announced the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education (the "Opinion"), issued by the General Office of the CPC Central Committee and the General Office of the State Council.  The Opinion contains high-level policy directives about requirements and restrictions related to after-school tutoring services, including (i) institutions providing after-school tutoring services on academic subjects in China's compulsory education system, or Academic AST Institutions, need to be registered as non-profit, no approval will be granted to new Academic AST Institutions, and an approval mechanism will be adopted for online Academic AST Institutions; (ii) foreign ownership in Academic AST Institutions is prohibited, including through contractual arrangements, and companies with existing foreign ownership need to rectify the situation; (iii) listed companies are prohibited from raising capital to invest in businesses that teach academic subjects in compulsory education; (iv) Academic AST Institutions are prohibited from providing tutoring services on academic subjects in compulsory education during public holidays, weekends and school breaks; and (v) Academic AST Institutions must follow the fee standards to be established by relevant authorities. The Opinion also provides that institutions providing after-school tutoring services on academic subjects in high schools (which do not fall within China's compulsory education system) shall take into consideration the Opinion when conducting activities.

The Company will continue to comply with all applicable rules and regulations in providing educational services, including those to be adopted following the policy directives of the Opinion. The Company is carefully considering the provisions of the Opinion and assessing their implications for the Company's business. The Company expects the Opinion, related rules and regulations, and the compliance measures to be taken by the Company will have material adverse impact on its after-school tutoring services related to academic subjects in China's compulsory education system, which in turn may adversely affect the Company's results of operations and prospect. The Company will proactively seek guidance from and cooperate with government authorities in connection with its efforts to comply with the Opinion and any related rules and regulations.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Information regarding these risks and uncertainties is included in the Company's reports filed with, or furnished to the U.S. Securities and Exchange Commission. All information provided in this press release is as of the date of this press release, and TAL Education Group undertakes no duty to update such information or any forward-looking statement, except as required under applicable law.

About TAL Education Group

TAL Education Group is a leading K-12 after-school tutoring services provider in China. The acronym "TAL" stands for "Tomorrow Advancing Life", which reflects our vision to promote top learning opportunities for Chinese students through both high-quality teaching and content, as well as leading edge application of technology in the education experience. TAL Education Group offers comprehensive tutoring services to students from pre-school to the twelfth grade through three flexible class formats: small classes, personalized premium services, and online courses. Our tutoring services cover the core academic subjects in China's school curriculum as well as competence oriented programs. The Company's learning center network currently covers 110 cities. We also operate www.jzb.com, a leading online education platform in China. Our ADSs trade on the New York Stock Exchange under the symbol "TAL".

For further information, please contact:

Echo Yan
Investor Relations
TAL Education Group
Tel: +86 10 5292 6658
Email: ir@tal.com

Caroline Straathof
IR Inside
Tel: +31 6 5462 4301
Email: info@irinside.com

View original content:https://www.prnewswire.com/news-releases/tal-education-group-provides-update-on-new-regulations-301340650.html

SOURCE TAL Education Group

FAQ

What new regulations affect TAL Education Group?

On July 24, 2021, new regulations were issued that require after-school tutoring institutions to register as non-profits and prohibit foreign ownership.

How will the new regulations impact TAL's business?

TAL expects the new regulations to have a material adverse impact on its after-school tutoring services related to compulsory education.

Is TAL Education Group's capital raising affected by the new policy?

Yes, the new policy explicitly prohibits listed companies from raising capital to invest in businesses that provide tutoring for compulsory education.

What are the implications of the Opinion for TAL's operations?

The Opinion requires compliance with strict directives that may significantly hinder TAL's tutoring services and overall operations.