Koolearn Photo: VCG

The Chinese online education conglomerate Koolearn Technology Holding Ltd (Koolearn) said that they will stop offering subject-based off-campus training services for students of K-9 or the compulsory education period in the Chinese mainland. This is the latest move of the company in its business transformation after the government introduced sweeping measures clamping down on China's private education industry.

Such decision was made in accordance with the new regulations and to ensure that the company's operations fully comply with all applicable legal and regulatory requirements, Koolearn, an online education company under New Oriental Education and Technology Group Inc, said in an open statement at the Hong Kong Stock Exchange on Monday. The move will take effect before the end of November.

On the closing of the Hong Kong market on October 25, stocks of the company fell 3.46 percent to HK$5.02 ($0.64).

The services to be halted target students from kindergarten to grade 9, the compulsory education period in the Chinese mainland, which based on total revenue contribution accounts for between 58 and 73 percent of the company's K-12 education segment, media reports.

In the announcement, Koolearn stated that it will continue to operate its businesses that are not related to compulsory education in exploration of new opportunities.

The board of directors expects that the termination will have a material adverse effect on the total revenue of the company for the fiscal year ending May 31, 2022 and subsequent periods, according to the announcement.

In order to reduce the pressure on students and alleviate the financial cost to parents, the education department issued relevant policies to implement burden reduction measures and ban some extracurricular tutoring classes.

Since the implementation of the policy in August, the company's stocks have fallen by more than 80 percent and its market value shrunk by HK$230 billion.