(Yicai Global) May 27 -- Shares in Laix surged over 15 percent in after-market trading after the operator of artificial intelligence-driven English language teacher app Liulishuo announced that it had made a quarterly profit for the first time since it was founded nine years ago.

Laix’s share price [NYSE:LAIX] bounced to USD1.81 yesterday. This is still well below the offering price of USD12.50 when the firm went public in 2018.

Laix raked in net profit of CNY12.2 million (USD1.9 million) in the three months ended March 31, according to its latest earnings report released yesterday. This is a huge turnaround from the CNY34.7 million the firm lost in the previous quarter and the CNY197 million (USD30.9 million) it hemorrhaged in the same period a year earlier.

The decrease was primarily due to stringent control of advertising and user acquisition costs as well as a drop in salaries and staff benefits due to better efficiency in personnel management, Shanghai-based Laix said in its earnings report.

Revenue, however, was down 13 percent year on year and 15.7 percent from the fourth quarter last year to CNY198.5 million (USD31 million).

China’s e-education sector has boomed since the outbreak of the Covid-19 pandemic last year as many schools turned to home learning. The sudden growth has led to intense competition among players, with regulators scrambling to catch up.

Excessive course work is a big burden on Chinese school students and the disorderly development of off-campus tutoring institutions has increased this burden, the central government said on May 21. It is necessary to standardize the management of these companies and punish those that do not meet requirements, charge unreasonable fees and make false pledges.

Earlier this month, two leading online tutors Zuoyebang and Yuanfudao were each fined CNY2.5 million (USD392,007) for sham advertising campaigns that deceived customers as they strove to drive up market share.

Editors: Dou Shicong, Kim Taylor