Tencent trims stake in Koolearn, New Oriental’s live-streaming unit, as new venture fuels a six-fold jump in stock
- Tencent collected US$92 million by selling down its stake in Koolearn Technology to 1.6 per cent from 9 per cent in two transactions this month
- Koolearn switched to live-streaming shopping after China last year slammed for-profit private education business in part of tech sector crackdown
The WeChat operator sold 35.6 million shares on June 15 and 38.9 million shares on June 16 at an average price of HK$9.62 to HK$9.68 each, according to stock exchange filings. The sales, amounting to HK$719.7 million (US$92 million), reduced its stake in Koolearn to 1.6 per cent from 9 per cent.
Koolearn Technology, which is 55.7 per cent owned by China’s biggest private tutoring group New Oriental Education & Technology, switched its business focus to live-streaming shopping after China last year slammed the for-profit online education platforms, part of a crackdown that wiped out more than US$1 trillion of market capitalisation from Chinese tech companies.
Koolearn benefited from the sudden rise to popularity of Dong Yuhui, a former English teacher who now sells books and agricultural products on Dongfang Zhenxuan. His fame helped pull in followers and sales.
Its June 16 live session generated 63 million yuan (US$9.4 million) in gross merchandise volume, according to data compiled by Citic Securities. The Dongfang Zhenxuan account on Douyin has since garnered 17 million followers by this week. The early numbers are fanning hopes that live-streaming will help Koolearn and New Oriental recover from last year’s crash.
Inspired by the success of Dong on Dongfang Zhenxuan, Yu said he planned to put more resources into selling educational products such as books, software, hardware, and other cultural and educational supplies. A team has been assembled for that purpose, he added.
Shenzhen-based Tencent has been cutting its equity stakes in several other investments. It sold a 2.6 per cent stake in US-listed Singapore-based technology group Sea Limited in January, and offered part of its stake in JD.com worth US$16.4 billion to shareholders as special dividend in December.