(Yicai Global) Aug. 10 -- China Online Education Group, which runs English tutoring platform 51Talk, said it will comply with new rules to alleviate the burden of homework and after-school tutoring on students by stopping to offer courses taught by overseas-based tutors to students in China.

The Beijing-based company said 51Talk will perform contractual services for students who have already signed up to such classes, and classes sold to overseas Chinese students will not be affected.

The firm said it would operate in full compliance with the regulations, and said it would keep expanding investment in adult English tutoring, having launched a new language literacy course earlier this month. The overseas market has always been important for 51Talk and it will further develop in this area, per yesterday’s announcement.

Founded in 2011, 51Talk focuses on online English tutoring via one-on-one lessons with foreign teachers, most of whom are based in the Philippines. The firm listed on the New York Stock Exchange in June 2016, becoming the first online English education company in China to go public in the United States. 

Its operating income reached USD91.6 million in the first quarter, up 23 percent from last year, with a non-GAAP net profit of CNY16.8 million (USD2.59 million). The number of its active students reached 392,700 in the quarter, an increase of 37 percent compared with the same period in 2020.

As Chinese regulators issued a directive in July banning foreign teachers located overseas from providing tutoring services in China, educational platforms specializing in such services, including Vipkid and 51Talk, have had to start diversifying in response.

The share price of China Online Education Group [NYSE:COE] has fallen 55 percent since July 22. It closed up 8.3 percent at USD2.99 yesterday.

Editor: Tom Litting