search icon
      blog search icon

      RISE Education Cayman Ltd. (REDU) Stock Declining Today, Here’s How - Stocks Telegraph

      By Hassan Masood

      Published on

      August 23, 2021

      2:15 PM UTC

      RISE Education Cayman Ltd. (REDU) Stock Declining Today, Here’s How - Stocks Telegraph

      RISE Education Cayman Ltd. (REDU), an English language training services provider, has seen a loss in its share price in the current market. The share price of REDU stock decline to $0.78 after an increase of 3.63%.

      Update about quarterly earnings

      Earlier, during mid of August, REDU stock experienced a decline of 10.14% after the company announced that due to recent regulatory developments, the company decided to not release the quarterly earnings data. That news caused a massive plunge within the share price of REDU.

      Update on regulations

      During late June, REDU stock suffered a loss of 11.11% due to the release of updates on new regulations by the Chinese state authorities. According to details, the Chinese state media announced the opinions to alleviate the burden of homework and after school tutoring for students in compulsory education. The opinion directed that the institutions providing such services be registered non-profit. Number of other directives regarding the subject was issued as well. The company said in its statement that it was accessing the potential impact of the opinion on its business and said that it would continue to comply with all the rules and regulations issued by the state authorities.

      Response to media reports

      On July 23rd, REDU responded to the media reports about the considerations to impose regulations on after school tutoring services related to school subjects taught in the compulsory education system. The company said that it has not received any sort of official notification. After the response came out, REDU stock plummeted some 40.52%, and since then, hasn’t recovered.

      New enrollments in REDU

      In mid of July, REDU provided an update about the new enrollments for the second quarter of 2021. According to the details, the number of new students enrolled in regular courses stood at 3582, while during the equivalent period of 2020, the number stood at 3749. The number of students enrolled in rise courses stood at 6790, while during the equivalent period of 2020, the number for same stood at 2183. The company also said that its business performance during the quarter was impacted due to various market conditions. The offline operations during 2020 were suspended due to the impact of the COVID pandemic, causing an impact upon enrollment of students.

      REDU Financial results

      In late May, REDU announced the unaudited financial results for the first quarter of the fiscal year 2021, which ended March 31st. According to those, the COVID pandemic had an adverse impact upon the business of the company.  There was a temporary closure in RISE self-owned learning centers, but the proactive policies by the company stabilized its business. The total revenues stood at $39.9 million. The net loss attributable to RISE stood at $3.9 million. The total number of learning centers on March 31st stood at 525. Ms. Lihong Wang, Chairwoman and Chief Executive Officer of RISE said on the occasion that as life returns to normalcy with COVID-19 well under control in China, the company expects its business to get back on track.

      What’s lying ahead?

      Future times seem sanguine for REDU. The EPS for this year could grow by 85%. The revenue is estimated to increase to $294.87 million during next year. From these statistics, it is certain that the REDU stock is well on track to obtain financial success.

      More From Stocks telegraph