(Yicai Global) Oct. 26 -- Shares of Koolearn Technology Holding fell after the Chinese online education platform said it will stop teaching kindergarten to ninth-grade children to comply with new regulations on the off-campus education sector.

Koolearn [HKG:1797] closed down 4.6 percent today at HKD4.79 (62 US cents), giving it a market cap of HKD4.8 billion (USD620 million). The shares have dropped over 80 percent so far this year.

The board of Koolearn, a unit of education technology provider New Oriental Education and Technology Group, said the decision to pull out of so-called K-9 education before the end of this month would have a significant impact on revenue, according to the statement the Beijing-based firm released late yesterday.

But given that its K-12 tutoring business has not yet turned a profit, it will have a positive impact on profitability, it added.

China’s online education sector has been overhauling itself since government guidelines were issued in July aimed at reducing the ‘twin pressures’ of excessive homework and off-campus tutoring on students in compulsory education.

Kooleran’s kindergarten-to-grade 12 business logged CNY787 million (USD123.3 million) in revenue in the fiscal year ended May 31, it said. Business income was CNY1.4 billion (USD219.4 million) in the period. The K-9 business contributed over 30 percent to overall income and also accounted for 58 percent to 73 percent of its K-12 business in the past two years.

The loss from its K-12 business reached CNY25 million (USD3.9 million) in the past fiscal year, during which the firm’s overall gross profit was CNY412 million, it added.

Editor: Futura Costaglione