Benzinga | Jul 26, 2021 06:48AM EDT

First High-School Education Makes Statement About New Regulations From the Chinese Government Regarding New Regulation: 'The Company's Existing Business is Expected to Operate in a Normal Fashion"

First High-School Education Group Co., Ltd. ("First High-School Education Group" or the "Company") (NYSE:FHS), the largest operator of private high schools in Western China and third largest operator in China[1], announced that, on July 24, 2021, China's official state media, including Xinhua News Agency and China Central Television, announced the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education (the "Opinion"), issued by the General Office of the CPC Central Committee and the General Office of the State Council. The Opinion contains high-level policy directives about requirements and restrictions related to after-school tutoring services, including (i) institutions providing after-school tutoring services on academic subjects in China's compulsory education system, or Academic AST Institutions, need to be registered as non-profit, no approval will be granted to new Academic AST Institutions, and an approval mechanism will be adopted for online Academic AST Institutions; (ii) foreign ownership in Academic AST Institutions is prohibited, including through contractual arrangements, and companies with existing foreign ownership need to rectify the situation; (iii) listed companies are prohibited from raising capital to invest in Academic AST Institutions; (iv) Academic AST Institutions are prohibited from providing tutoring services on academic subjects in compulsory education during public holidays, weekends and school breaks; and (v) Academic AST Institutions must follow the fee standards to be established by relevant authorities. The Opinion also provides that institutions providing after-school tutoring services on academic subjects in high schools (which do not fall within China's compulsory education system) shall take into consideration the Opinion when conducting activities.

The Company will follow the spirit of the Opinion and comply with all relevant rules and regulations in providing high school education services. The Company's existing business is expected to operate in a normal fashion, and the Company will further communicate with the competent authorities for guidance on the college entrance examination tutorial training business.