(Yicai) May 7 -- Dongfang Optimization Beijing Technology, an associated firm of Chinese livestream e-commerce firm East Buy Holding, was penalized for practicing travel agency business without a business permit.

The Beijing Municipal Bureau of Culture and Tourism fined Dongfang Optimization CNY13,000 (USD1,835) on April 29, the cultural market law enforcement agency announced on its website yesterday.

Dongfang Optimization got a domestic and inbound travel agency business permit before the fine was issued, corporate data platform Tianyancha showed on April 27. East Buy, a unit of China's New Oriental Education and Technology Group, has not replied to Yicai's inquiries regarding the penalty yet.

Set up in October 2021, Dongfang Optimization added "attracting tourists and providing consultation services as a travel agency outlet" to its business scope last August. Yu Minhong, founder of New Oriental, indirectly holds a 99 percent stake in the firm. 

New Oriental began laying out a cultural tourism business in July 2022, with East Buy launching "outdoor livestreaming events" to sell featured commodities and advertise local culture and tourism by working with provincial government departments.

East Buy held livestreams in Gansu province last July, while Yu and his team advertised local tourism by introducing featured agricultural products and selling "Gansu-Qinghai circular sightseeing" tour packages during the events.

Yu has been placing great expectations on the cultural tourism industry. Earlier this year, he said that New Oriental's related business has grown from a department into a firm that will go public independently as a third listed company after New Oriental and East Buy.

New Oriental and East Buy have not yet unveiled financial data about the cultural tourism business. New Oriental has experimented with some top tourism products but is still in the preliminary stage of verifying and assessing their feasibility in selected areas, Yang Zhihui, chief executive and chief financial officer of the Beijing-based firm and president of New Oriental Cultural Tourism Group, said on an earnings conference call.

Shares of East Buy [HKG: 1797] fell 0.8 to HKD17.22 (USD2.20) apiece as of 3.50 p.m. in Hong Kong today, after earlier dropping by as much as 1.4 percent.

Editor: Martin Kadiev