Photo/Shetuwang

Dec. 19 (NBD) -- Chinese preschool education company RYB Education (Nasdaq: RYB) announced Tuesday that the Board of Directors has approved the plan to repurchase its ordinary shares, in the form of American depositary shares, worth up to 12 million U.S. dollars over the next 12 months.

Wei Ping, chief financial officer of the company, stated RYB is committed to providing quality early childhood educational products and services and the company believes the educational value of our products and services are fully aligned with our shareholders' values. The buyback program demonstrates RYB's conviction in its value.

The company added that it will continue to carry out the employee stock ownership plan.

Shares of RYB surged by 1.66 percent to close at 6.12 U.S. dollars in Tuesday trading.

However, since the early education provider went public in late September of 2017, its stock has dived by 66.9 percent from its IPO price of 18.5 U.S. dollars.

The child abuse case of RYB's kindergarten in Chaoyang District, Beijing, which was reported in November last year, aroused public concerns over child safety.

RYB said a series of new measures have been taken since 2018 to establish a safety risk prevention system, including suspending the franchise business and improving the management of existing franchises.

It is noted that the education company posted poor financial results during the first nine months of this year.

According to RYB's latest earnings report, it generated net revenues of 35.3 million U.S. dollars in the third quarter of 2018, marking a year-over-year decline of 5.7 percent, with net loss attributable to ordinary shareholders rising to 4.3 million U.S. dollars.

The report also revealed 2.3 million U.S. dollars of net loss attributable to ordinary shareholders for the first nine months of 2018.

RYB ascribed the sliding revenue in the third quarter to the cessation of the kindergarten franchise program, the temporary pause of our play-and-learn franchise expansion in the first half of this year, as well as the lower-than-expected quarterly kindergarten student enrollment resulting from a lower birth rate in 2015 which leads to a smaller kindergarten applicants.

China's new regulation over the early education industry published on November 16 this year is another factor that affects RYB's performance. The new policy includes the ban of listed companies from investing in for-profit kindergartens through stock market or purchasing kindergarten shares.

Founded in 1998, RYB offers preschool education solutions for children aged at 0-6 years old.

As of June 30, 2017, the firm operated more than 1,000 directly owned and franchised kindergartens and play-and-learn centers in around 300 cities and towns throughout China.

Email: zhanglingxiao@nbd.com.cn