China’s private education companies learned a difficult lesson four years ago when Beijing wiped out most of their business by banning after-school tutoring services for K-12 students. Now, the group could be learning yet another difficult new lesson as mounting U.S.-China tensions, combined with increasing consumer caution, cast a chill over studying abroad.

That was the loudest message coming through in the latest quarterly report from sector leader New Oriental Education & Technology Group Inc. (EDU.US; 9901.HK), which had been rebounding strongly from the earlier crackdown of 2021. Until now, that is.

After seeing its revenue contract for two straight years following the crackdown, New Oriental finally regained its footing in its fiscal year through May 2024. It reported 43% growth that year on its new mix of overseas test preparation and overseas consulting services, along with domestic test preparation services targeting adults and college students. All of those were still allowed after the crackdown that focused mostly on reducing the pressure on K-12 students in core curriculum areas covered by China’s national college entrance exam.