The risk warning announcement was disclosed on Dongguan Kingsun Optoelectronic Co.Ltd(002638) 5, saying that the implementation of the “double reduction” price limit has a great impact on the operation of Longwen education, a wholly-owned subsidiary of the company.
Specifically, on July 24, 2021, the central office and the State Office issued the opinions on further reducing students’ homework burden and off campus training burden in the stage of compulsory education. Subsequently, the relevant competent departments issued a series of landing policies on regulating off campus training, which put forward a series of normative requirements for the education and training industry.
Recently, the local education departments where Longwen education mainly operates in Beijing, Shanghai and Guangzhou have successively issued notices on the management of after-school training fees for disciplines in compulsory education, including the implementation of government guidance price management for after-school training fees for disciplines in the stage of compulsory education, the implementation of charging behavior supervision, and the issuance of relevant charging standards and standard course duration, The charge per unit class hour decreased by more than 70% compared with the original market charge. Dongguan Kingsun Optoelectronic Co.Ltd(002638) said that according to the current price limit, the difficulty of maintaining profit and loss balance of discipline after-school training will be greatly improved, and the fees for Discipline after-school training for ordinary high school students will be implemented by reference.
Previously, Dongguan Kingsun Optoelectronic Co.Ltd(002638) issued the risk warning announcement on the significant impact of the “double reduction policy” on Longwen education, a wholly-owned subsidiary, which said that given that Longwen education accounts for more than 50% of the company’s operating revenue and profit , the huge policy changes in the education and training industry will have a significant adverse impact on Longwen education and the company’s overall operation.
Image source: Dongguan Kingsun Optoelectronic Co.Ltd(002638) announcement
Dongguan Kingsun Optoelectronic Co.Ltd(002638) said that Longwen education is one of the main business income and profit sources of the current company . As an existing discipline training institution, with the implementation of local policies, Longwen education is further limited in charge pricing, teaching duration, advertising management, holidays, winter and summer vacation Discipline Training for students in the stage of compulsory education shall not be carried out on weekends. The above price limit measures will have a significant adverse impact on the profitability of Longwen education.
In addition, affected by the “double reduction policy”, in the third quarter of Dongguan Kingsun Optoelectronic Co.Ltd(002638) 2021, an impairment provision of 249 million yuan was made for the goodwill formed by the acquisition of Longwen education. As of September 30, 2021, the recoverable amount of goodwill formed by the company’s acquisition of Longwen education is 194.3259 million yuan. There is still the possibility of partial or full impairment of the remaining goodwill in the future.
Dongguan Kingsun Optoelectronic Co.Ltd(002638) said that the board of directors and management of the company will continue to pay attention to relevant progress and minimize adverse effects .
On the same day, Dongguan Kingsun Optoelectronic Co.Ltd(002638) also announced that it had recently received the decision on administrative supervision measures issued by Guangdong securities regulatory bureau. Guangdong Securities Regulatory Bureau conducted an on-site inspection on Dongguan Kingsun Optoelectronic Co.Ltd(002638) and found that Dongguan Kingsun Optoelectronic Co.Ltd(002638) had problems in information disclosure, financial accounting, insider information management and so on.
According to the information on Longwen education’s official website, founded in 1999, it is a training institution focusing on providing comprehensive education services and advocating personalized teaching for children and adolescents aged 6-18. By 2021, Longwen education campus covers nearly 20 cities such as Beijing, Shanghai, Guangzhou, Wuhan, Suzhou, Zhengzhou, Chongqing, Nanning and Foshan.
In the secondary market, Dongguan Kingsun Optoelectronic Co.Ltd(002638) 5 the daily limit rose to 2.21 yuan / share. So far, its total market value is 3.329 billion yuan.
(Zhongxin Jingwei)
