The stock in OneSmart International Education Group Ltd. (NYSE: ONE) tumbled nearly 9% to a historic low of $5.01 per American depositary share by midday Wednesday, after the company announced losses that have more than doubled in the first fiscal quarter.
The Shanghai-based education provider said in a statement today that in the three months through November that its net loss widened to $15.6 million compared with $5.6 million from the same period in 2018. However, OneSmart’s revenue reached $113.4 million, up 23% year-over-year.
Due to tightened regulations implemented by Beijing, many companies operating in the education sector in 2019 struggled. To navigate around the regulatory changes to school admission practices mainly affected in Shanghai, OneSmart said it launched an artificial intelligence Math program, which addressed broader market demand.
As a result, HappyMath, which is OneSmart’s sector for a premium math education program that caters to young children, saw its number of students increase 132% year-over-year in the quarter.
Now with the coronavirus, which has been affecting the overall volatility of the markets, the stock in OneSmart has fallen to historic lows. Before Jan. 27, OneSmart’s stock had never traded under $6.00 per share.
“Despite the short-term challenges, we remain confident on growth prospect of our business and the ability of our highly effective personalized teaching programs to help improve learning experience and outcome,” Steve Zhang, the chairman and chief executive officer of OneSmart, said in a statement today.
With the virus keeping students home, luckily for OneSmart, it offers online education courses through its OneSmart online brand. Through the full year 2019, the company operated a network of 432 study centers across 35 cities in China.
Zhang concluded in his statement, “Going forward, our offline centers will continue to focus on tier-1 and major tier-2 cities, while our online platform will expand into the vast lower tier cities. I am very confident that with our well recognized brand, improved teacher quality, operational efficiencies and continuous investment in technology, we will replicate our offline success to online space and build the largest premium online education platform in China."