A teacher instructs as students practise electronic assembly at Nanchuan Longhua Vocational High School of Chongqing in southwest China's Chongqing File Photo: Xinhua

Specialized vocational education for adults is set to become an emerging trend as Chinese education companies shift their business model, as reports showing a noticeable reallocation of capital from private tutoring sector to vocational education. 

Meanwhile, US-listed Chinese education enterprises have been living through a period of transition  on top of recovering from the financial hit caused by their stocks plunging as a result of the government's clamp down on China's private education industry, analysts said.

There were 29 financing events in the education industry, raising a total of 14.74 billion yuan ($2.28) with 11 events related to vocational education, according to a report targeting financing data in the nation's education industry in July released by iiMedia Research. 

As most US-listed Chinese education enterprises had targeted k12 education businesses, the crackdown on private tutoring sector have had significant impact on their financial performances and stock market value, many believe this market value will  gradually recovered if the companies are willing to shift their businesses to vocational education,  Zhang Yi, CEO of iiMedia Research Institute, told the Global Times on Tuesday.

Zhang noted the expansion of the vocational education market aligns with the nation's long-term development in the education sector, and transforming into vocational education is the best way for US-listed Chinese education companies to recover and further develop if they wish to remain viable within the education economy. 

The total financing amount in the field of vocational education contributed 12.22 billion yuan out of the total amount of 14.74 billion yuan, accounting for 82.9 percent of the total capital raised in the education industry in July, said the report. 

Since 2016, the market size of vocational education industry has been continuously growing from 88 billion yuan to 141.5 billion yuan in 2020, and is expected to reach 171.9 billion yuan in 2021. 

As for the recovery of the financial performances of US-listed Chinese education companies, Zhang pointed out that there has been a sharp decline reflected in financial reporting, and that affected firms will still take a while in between one to three years to recover from the hit and transform their business models.

Moreover, these companies will also diversify in their operation model, such as cooperating with companies providing related services, said Zhang, emphasizing that mergers and acquisitions will be a major development mode and a more rapid way for their future growth and expansion. 

Global Times