Shares in Skillful Craftsman Education (Nasdaq: EDTK) dropped 3% intraday Thursday after it posted earnings that were nearly three-fold less in the fiscal year ending March.
The Chinese online learning services provider said in a statement Wednesday after the markets closed that its revenue in 12 months through March hit $29.17 million, up 2% year-over-year. The Wuxi-based company noted that its revenue grew as a result of a strong yuan dollar.
However, the company’s earnings weren’t as Skillful as its top-line. Its Net income dropped to $3.5 million versus $9.98 million in the same period in the preceding year.
Also, its fee-paying members plunged to 1.62 million during this fiscal year, compared with 3.09 million in the prior year ending March.
But, while there’s been volatility as of late in China’s tutoring space over the preparation of new regulations, investors have been a little more bullish on vocational education players like Skillful Craftsman.
“On May 14, 2021, the State Council issued the amended ‘Regulations for the Implementation of the Private Education Promotion Law of the People's Republic of China’, which encourage and support private vocational education,” Xiaofeng Gao, the chairman, and chief executive officer of Skillful Craftsman said in a statement today.
“The regulations are proposed to build 50 high-level higher vocational schools and provide 150 key majors by 2022, and realize the goal of achieving an average of more than 50 million vocational training sessions per year.”
And earlier this week, China's top legislature began discussions on revisions to laws to prop vocational education, as reported by state-run news agency Xinhua Net. The proposal is giving greater autonomy to vocational schools, aiming to train more high-caliber technical professionals, attract funding, and strengthen the teacher workforce, according to the medium.
It is forecasted China's vocational education industry will reach 811 billion yuan ($126.85 billion) in 2022, growing at an average annual compound growth rate of 11.2%, according to Skillful, citing data from MobTech.
Since the middle of May, shares in Skillful Craftsman have gained 24% to date, despite today’s fall.