Education stocks posted broad gains in Hong Kong trading. As of press time, CHINA EAST EDU (00667) surged 6.64% to HK$7.39; NEW HIGHER EDU (02001) climbed 5.98% to HK$1.24; YUHUA EDU (06169) advanced 3.28% to HK$0.63; and CHINA EDU GROUP (00839) gained 1.88% to HK$3.25.

The rally was driven by news that Hunan International Economics University, a subsidiary of YUHUA EDU, recently received approval to convert to for-profit status. Authorities have granted permission for the institution to proceed with for-profit private school classification registration.

Guoyuan International released a research note highlighting that the successful conversion of Hunan International Economics University serves as a strong demonstration for developing provinces. The proactive approach taken by Hunan's local education authorities in facilitating private university conversions has strengthened the conversion intentions of other private schools. In 2025, Hunan has already approved three conversions, including the International Economics University, providing a referenceable pathway for similar provinces and indicating positive policy signals at the implementation level.

The firm noted that for-profit status benefits listed companies through dividend distributions and profit allocation to alleviate debt burdens. While for-profit registration requires completion of asset transfers for land and property, plus payment of supplementary taxes and fees that increase short-term costs, it will achieve market-based asset revaluation in the long term. Currently, among listed companies, only YUHUA EDU has received approval, which should help restore sentiment and valuation in the near term. If other listed companies advance similar initiatives subsequently, it could constitute a long-term value revaluation for the entire sector.