The education technology sector in China has had a pretty tough time over the course of the past few weeks owing to the possible regulations that might be hitting the sector. However, on Wednesday, the 17 Education and Technology Group Inc (NASDAQ:YQ) stock emerged as one of the notable gainers.
The Chinese company saw its stock soar by as much as 21% yesterday but at the same time it should be noted that there was no fresh news that might have triggered the strong rally. The company is best known for its “in school + after school” integrated education model.
Last week, 17 Education announced that the local government in Shanghai had published the “Measures to Further Alleviate the Burden of Homework and After-School Tutoring on Students in Compulsory Education” on August 24.
The company noted that the measures issued by the Shanghai government were part of the larger regulatory measure that had been announced earlier. 17 Education noted that although it was going to comply with these measures, it will have an adverse effect on its business and financial well being. Hence, it remains to be seen if the rally in the stock yesterday was speculative in nature or not.