Faced with over US$400 million of debt, OneSmart has repackaged parts of its training businesses.
Photo from CFP
By ZHA Qinjun
OneSmart Education will attempt to avoid bankruptcy by a transition to three non-tutoring businesses: study abroad services, smart student IDs, and intelligent training.
The off-campus education agency has struggled to survive since the “Double Reduction” – reducing students' homework burdens and a ban on profits for the agencies. In October last year, domestic tutoring centers closed and trading of company shares in the U.S. was suspended. OneSmart owes salaries and refunds worth 2.7 billion yuan (US$420 million) to the students.
To save itself from bankruptcy, OneSmart hopes to provide online Chinese and math courses for overseas students, along with study abroad consultations and planning for students in China. The company also wants to commercialize smart student ID cards to check attendance and automatically inform administrators of student behavior. Intelligent training will combine VR, AI, and blockchain.
OneSmart Education was founded in 2008 and was a leading company in the K12 off-campus education industry. Courses cost 150 to 350 yuan (US$24-55) per hour, higher than the market average. In August, OneSmart's online income and assets were estimated at US$16 million and US$11 million, respectively. Preschool income and assets were US$60 million and US$110 million.
OneSmart has about US$40 million in cash and equivalents and US$110 million in assets, far short of debt.