(Yicai Global) July 26 -- China’s education technology companies such as TAL Education Group and Goat Techedu need to overhaul their businesses, according to experts, after the authorities ordered them to register as non-profit organizations and prohibited them from listing on the stock market and raising funds from overseas investors.

Edtech firms may shift focus to the adult, vocational and quality training fields, which are not covered by the ban, Dai Yun, former vice president of 51Talk and co-founder and Chief Academic Officer of Putao Zhixue, told Yicai Global.

The authorities issued new regulations on July 24 targeting private tutors and online educators that provide academic-related classes to students from kindergarten to 12th grade, with the aim of reducing the study workload during compulsory education years.

The measures are stricter than rumors led anyone to expect, said Xiong Bingqi, president of the 21st Century Education Research Institute. Established institutions will need to delist or spin off their assets, while those preparing to go public will have to abandon their plans.

Providers should offer different services such as summer schools or after-school programs because there is still huge demand from parents, Xiong said.

It will also take time before the measures are fully implemented. China first needs to properly deal with delisting, divesting, refunds, and the re-employment of staff from the sector, said Liu Lin, president of the China Association for Non-Government Education.

Teachers at private education provider New Oriental Education & Technology Group are afraid classes will not start next month, an English teacher who has just resigned from the Beijng-based company told Yicai Global. If classes are suspended, they may lose their jobs.

Editor: Futura Costaglione