(Yicai Global) Nov. 20 -- Chinese pre-school operator RYB Education will adjust to meet new government regulations and will not de-list from the New York Stock Exchange, its vice chairman has said after Beijing unveiled plans to prevent kindergarten's from raising funds on global stock markets.
"We are in meetings to discuss the regulations," Zhang Fan told state-backed news site The Paper yesterday. "Our discussion is on the regulation document itself, actual interpretation of the regulations is done by the government."
China's cabinet, the State Council, revealed in a policy document on Nov. 15 that it planned to ban private pre-schools from listing independently or as part of a portfolio and prevent for-profit kindergartens from raising funds from listed companies.
It is not yet clear how the new rules will directly affect already-listed operators, many of which are public in China, Hong Kong and the United States.
Their stock prices have plummeted since the document was published. Shares in RYB [NYSE:RYB], which has nearly 1,800 daycare centers and pre-schools catering to children aged up to six, have dived more than 50 percent since the new regulations were announced, bringing the Beijing-based firm's market cap to around USD230 million.
The 20-year-old company, which listed in 2017, earned USD76 million in net revenue over the first half, but net profit more than halved to USD2 million from USD5.3 million a year earlier, according to its interim financial report.
Editor: James Boynton