China's Gaotu rallies again after audience spike

Gaotu Techedu

15/12/2023 12:28

By Bansari Mayur Kamdar
       Dec 15 (Reuters) - A rally in U.S.-listed shares of
Chinese online education firm Gaotu Techedu was set to extend
into Friday after a surge in its livestream audience in the wake
of a row over the authorship of a screenplay.
    Shares of Gaotu Techedu  GOTU.N  jumped 13.8% to $5.43 in 
premarket trading, following an 80% rise in the last seven
sessions.
        The surge was triggered by a rush of fans of rival
livestreaming company East Buy's popular host Yuhui Dong to
Gaotu's platform during a controversy regarding the authorship
of one of Dong's screenplays, according to Citi equity research
analyst Alice Cai.
    "This discord resulted in a notable surge in GaoTu JiaPin's
live stream viewer numbers, with hundreds of thousands offering
their support for Dong."
    "We maintain sell on Gaotu until there is an improvement in
gross billings or the company shows it can sustain and convert
this traffic surge," Cai said in a note published earlier this
week.
    East Buy's Hong Kong shares  1797.HK  have fallen 20% in the
past two weeks, while U.S.-listed shares of parent company New
Oriental Education & Technology Group  EDU.N  have lost 2.7% in
the same time period.
    Despite the rally, shares of Gaotu are still down nearly 96%
from their record high hit in 2021 as edtech firms have
struggled since China's clampdown on its booming private
tutoring industry.
    Gaotu did not immediately respond to a request for comment
outside of business hours.

 (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Saumyadeb Chakrabarty)
 ((BansariMayur.Kamdar@thomsonreuters.com;  Follow on X:
@BansariKamdar;))