China EV stocks Nio (NIO), Xpeng Motors (XPEV) and Li Auto (LI) sold off as Beijing widened its crackdown beyond technology companies to education.
Chinese school stocks TAL Education (TAL) and New Oriental Education and Technology (EDU) plunged amid local reports of a government memo applying new restrictions on the education sector.
Educational training institutions are banned from raising money through stock listings according to a copy of a new policy document and seen by CNBC. The document dated July 19 also calls for restricting foreign capital investments.
Among other things, it appears to ban after-school tutoring businesses from advertising. And it forbids them from operating during public holidays, weekends and winter and summer vacations.
A prior crackdown by Beijing regulators targeted e-commerce giant Alibaba (BABA) and ride-hailing giant Didi Global (DIDI). Chinese authorities have tightened restrictions in recent months on the private education industry, while increasing scrutiny on domestic companies such as Alibaba and Didi listing overseas in the U.S.
China EV startup Nio’s selloff also amid regulatory filings late Thursday that disclosed the offering of 1.68 million shares by selling stockholders. Nio’s an emerging rival to Tesla (TSLA) in the world’s biggest car market.
China EV Stocks
Nio stock gave up 4.5% on the stock market today. Among other China EV stocks, Li Auto lost 8%, and Xpeng shed 5.25%. Meanwhile, TAL Education dived 70.8% and New Education plunged 54.2%.
China tech stocks sold off as well. Didi stock tumbled 21%, Bilibili (BILI) sank 12.4%, and Alibaba shed 3.5%.
Elsewhere, JD.com (JD) sold off 4.8%, Weibo (WB) fell 3.9%, and internet giant Tencent (TCEHY) slid 4%.
On Thursday, Bloomberg reported that Chinese authorities are considering “unprecedented” penalties for Didi. Regulators view the company’s decision to hold an IPO despite opposition from Beijing as a challenge to its authority, sources told Bloomberg.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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