Tarena Sees Losses as Online Education Rivalry Heats Up
The stock in Tarena International Inc. (Nasdaq: TEDU) dropped over 7% intraday Friday to $4.74 per share after it reported flat half-year revenue and doubled net loss.
The education platform, with headquarters in Beijing, said that in the six months through June 2019, its revenue reached $128.6 million, up 3% year-over-year. Its net loss mounted 85% to $91.1 million, or $1.65 per American depositary share, according to the report.
Tarena has been transitioning to K-12 education from its core adult professional courses. The company said that its total student enrollments in adult education in the first half of 2019 decreased by 5% to 62,900 while its student enrollments in K-12 education more than tripled to 58,400.
The company also closed nearly 40 learning centers for adult education and added about 30 learning centers for K-12, totaling 142 units and 177 units, respectively.
The need for online education became especially apparent in the first quarter of 2020 in China during the peak of the coronavirus outbreak. According to data from the China Internet Information Center, China's online education users increased to about 259 million with a market size of $57.1 billion, reflecting a 16% year-to-year growth from the same period in 2019.
The booming industry has attracted the parent of viral short video app TikTok, ByteDance.
The world's most valuable startup, with a valuation of $75 billion, is now looking to provide tutoring to preschoolers and primary school students in China. The company started investing in education in 2018 through an online English platform, Gogokid. Now, it looks to expand in the sector.
"Education is critical to inspiring people 's potential, and education itself has great potential," Yiming Zhang, the founder of ByteDance, said in an internal letter in March cited by Chinese media.
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