Why did Four Seasons Education (Cayman) Inc (FEDU) stock lose its positive momentum in the after-hours on Thursday?

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DNAY Stock

Four Seasons Education (Cayman) Inc. (FEDU) shares lost 9.64% in after-hours on Thursday, September 23, 2021, and closed the daily trading at $0.75. However, in the regular trading session of Thursday, FEDU’s stock gained 43.10%. FEDU shares have risen 4.14% over the last 12 months, and they have moved up 42.71% in the past week. Over the past three months, the stock has lost 11.29%, while over the past six months, it has declined 38.06%.

Let’s see what are the latest news about the company?

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FEDU share repurchase program

On September 23, 2021, the board of directors of Four Seasons Education (Cayman) Inc (FEDU) approved a share repurchase program whereby Four Seasons Education is authorized to repurchase its ordinary shares in the form of American depositary shares with an aggregate value of up to US$15.0 million during the next twelve-month period. The Company plans to repurchase the shares with working capital, existing cash balance or future cash provided by operating activities.

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Update on New Regulations

On July 26, 2021, Four Seasons Education (Cayman) Inc (FEDU), responded to the new regulations and rules about the After-School Tutoring for Students tuitions which were issued by the General Office of the CPC Central Committee and the General Office of the State Council.

The Company said that it will continue to comply with all applicable rules and regulations in providing educational services, including those to be adopted following the policy directives of the Opinion. The Company is carefully considering the provisions of the Opinion and assessing their implications for the Company’s business.

FEDU received a non-compliance letter

On June 22, 2021, Four Seasons Education (Cayman) Inc (FEDU) received a letter from the New York Stock Exchange notifying Four Seasons Education that it is below compliance standards due to the trading price of Four Seasons Education’s American depositary shares.

FEDU recent financial results announcement

On May 13, 2021 / Four Seasons Education (FEDU) announced its unaudited financial results for the fourth quarter and fiscal year 2021, which ended February 28, 2021.

Q4 2021 financial highlights

FEDU reported revenue of RMB70.2 million (US$10.8 million) in Q4 2021, compared with RMB71.1 million in Q4 2020.

In Q4 2021, gross profit was RMB28.3 million (US$4.4 million) compared to RMB24.8 million in Q4 2020.

It suffered a net loss of RMB11.5 million (US$1.8 million) in Q4 2021, compared with RMB145.4 million in Q4 2020.

FY 2021 financial highlights

FEDU earned total revenue of RMB280.3 million (US$43.3 million) in FY 2021, compared with RMB389.0 million in FY 2020.

  • In FY 2021, the gross profit was RMB111.5 million (US$17.2 million), compared with RMB188.1 million in FY 2020.
  • It suffered a net loss of RMB27.9 million (US$4.3 million) in FY 2021 compared with RMB109.6 million last year.

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In our opinion, the recent share repurchase announcement was the reason behind its exceptional gains in the regular trading session but we have no valid reason for its after-hours loss on Thursday.


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