This article only represents the author's own views.
The last few years have been a learning period for Youdao Inc. (DAO.US), as the separately listed education arm of gaming giant NetEase (NTES.US) was hit by a wave of regulatory tightening against big tech in China. The company’s K-12 online education business was obliterated during a crackdown on after-school tutoring companies, leading Youdao to sell that business in 2021.
Since then, investors have shown little love for the company. Its shares are down 17% so far this year and have lost about three-quarters of their value since their New York listing in 2019. That downward trajectory continued after it released its second-quarter results last week, even as its latest report showed sharply narrowing losses and the potential for profits in the not-too-distant future for a company that has nearly always lost money.