(Yicai Global) July 27 -- Shares of East Buy Holding dropped after the e-commerce subsidiary of New Oriental Education & Technology Group started a three-day hiatus of its live-streaming shows to comply with regulations.

East Buy [HK:1797], previously known as Koolearn Technology Holding, slid 6.5 percent to close at HKD30.20 (USD3.90), or more than 40 percent down since early January.

East Buy’s self-operated stores and live broadcast rooms on Douyin, the Chinese version of TikTok, will be temporarily suspended due to certain rules, the Beijing-based operator said in a statement yesterday, without disclosing the specific reason.

The closure of East Buy’s Douyin stores is an emergency, Sun Dongxu, chief executive, said during a show last night. The firm was trying to redirect its user traffic to its self-operated mobile application with a 15 percent discount on products.

East Buy launched its own app in August 2022 and introduced a live broadcasting feature this month to increase traction as the growth of its live broadcast room on Douyin, which had over 30 million followers in early July, is slowing. Before its e-commerce fame, East Buy was known for after-school tutoring services, a field that has basically dried up since the country tightened its regulation on off-campus training in 2021.

Over 26,000 people were online at the same time watching the show on the app last night and sales exceeded CNY10 million (USD 1.4 million) for the day, East Buy said today.

The transformation has been successful as from June to November, the e-commerce marketer and seller earned CNY585 million (USD82 million) in net profit, reversing its deficit from a year earlier, according to the latest earnings report. Revenue surged almost four times to CNY2.1 billion (USD294 million).

Editors: Dou Shicong, Emmi Laine