Nedgroup Investments: What regulations mean for our China Education portfolio

China Education, an investment holding company for private higher education services, is affected by the increased regulatory risk premium the market is panicking about, but in our opinion, it is not directly impacted by the latest regulations.

It does not conduct after school tutoring (AST) nor does it educate K-12 or below (compulsory education). Its focus is on higher education and vocational training - both of which are areas the government wants to put more capital and investment into. The situation remains quite fast moving. As can be seen from the recent actions in the US, the Chinese authorities have sought to clarify that the regulatory clampdown is specific to the education sector. We have nevertheless seen the prior regulatory clampdown in internet names roll into different sub-sectors of the market.  In most case...