China Maple Leaf Educational Systems Ltd.’s shares plunged to their lowest in six months, amid concerns that the country’s largest operator of private international schools may be affected by an October 19 move by Shanghai’s city officials to tighten education policy in the city.
Maple Leaf’s shares fell for the fourth day, tumbling as much as 7 per cent to HK$5.22 on the Hong Kong stock exchange, their lowest intraday low since April.
Foreign companies that manage schools on the mainland are limited to operating kindergartens and upper secondary schools, according to an October 19 held by the Shanghai Municipal Education Commission, which was confirmed by the commission’s WeChat account.
These joint-venture operators are not allowed to operate primary and lower secondary classes outside China’s public education curriculum, the commission said, in statement reaffirming the country’s “educational sovereignty.”
The government is studying to “further regulating” the private schools, according to the statement.
“There could be short term impact as investors are very risk sensitive at this moment when the market is volatile,” said Eugene Mak, an analyst at China Merchants Securities.
He said it is too early to say the actual influence on the schools and need to wait until more details to be announced.
Dalian-based Maple Leaf offers international education for over 17,700 students from preschool to upper secondary school (K12) in 11 Chinese cities.
All of its high school graduates are sent to universities abroad, with about 70 per cent of them going to Canada.
It opened Maple Leaf International High School in Shanghai in 2013, serving students aged 16 to 18 years.
Article source: http://www.scmp.com/business/companies/article/2039841/maple-leaf-shares-plunge-shanghai-city-tightens-rules-operating