Summary of Key Points
Zhang Xiaolong, CEO of Fenbi Technology, spoke without restraint during a speech at Renmin University: on one hand, he criticized the civil service examination preparation industry as a form of "idle waiting for death" (thus undermining his own company's training business), and on the other hand, he encouraged everyone to invest in the stock market (boasting about earning 53 million yuan from 80 million yuan in cash). He also admitted that the company provided "emotional value" but was facing layoffs. This led to a sharp drop in Fenbi's stock price, and netizens demanded refunds. A deeper issue is that Zhang Xiaolong has focused his energy on the stock market rather than the company's core business; revenue has been declining, and the company has fallen behind its former owner, Huatu Education. Former partners have all withdrawn, leaving no one to hold him back in his reckless behavior.
Detailed Analysis
1. The CEO Damaging His Own Business
How absurd is Zhang Xiaolong's approach? He runs a civil service examination training company, and the audience consists of students who wish to take the exam (potential customers). Yet, he publicly stated that taking the exam is a waste of time and that the company offers no real benefits. It’s like a hot pot restaurant owner saying eating hot pot causes cancer—straightly scaring away potential clients.
The consequences were immediate: Fenbi's stock price dropped by 4.29% on June 3 and another 8.96% on June 4, with netizens demanding refunds and expressing their dissatisfaction. Ironically, the theme of his speech was supposed to be about career choices, yet he suddenly shifted to discussing the stock market, suggesting that investing in U.S. stocks was the best option, completely ignoring his own business.
2. Fenbi’s Decline Is Not a Industry-wide Problem
The civil service examination training industry is actually very popular—over 3.7 million people registered in 2025, indicating high demand for such services. However, Fenbi is struggling:
- Revenue in 2025 was 2.677 billion yuan, a year-on-year decrease of 4.1%; net profit was 281 million yuan, a decrease of 22.4%.
- Its parent company, Huatu Education (where Zhang Xiaolong used to teach), expects a net profit of 280-420 million yuan in 2025, a growth of 428%-692%, leaving Fenbi far behind.
This shows that the problem is not with the industry but with Fenbi’s poor performance.
3. The CEO’s Focus on the Stock Market
Zhang Xiaolong is more interested in the stock market than his own company. He bragged about investing 80 million yuan in stocks and earning 53 million yuan in a month, likely from his share sales after Fenbi went public (over 100 million Hong Kong dollars in total). Instead of investing in Fenbi’s AI initiatives, he chose to invest in the U.S. stock market.
His comments that the civil service examination industry is difficult and that the company was laying off employees effectively signaled to the market that Fenbi was in trouble, which was even more detrimental than negative media coverage.
4. No One Can Hold Him Back
Fenbi was originally a project launched by Yuan Tutoring, founded by Li Yong, who held a larger stake (as the primary shareholder) before Zhang Xiaolong joined. Now:
- Li Yong resigned as a non-executive director in 2024 and withdrew from being a controlling partner in 2026, transferring his shares to Zhang Xiaolong.
- Another co-founder, Li Xin, also stepped down from the board, leaving only Wei Liang as the president.
Zhang Xiaolong now has almost complete control over the company, with no one to restrain his reckless behavior. In the past, he might have had to justify his remarks to his partners; now, he simply writes two apology letters, claiming to be acting in the company’s best interests without realizing his actions are harming it.
5. Not the First Time for Surprising Statements
Zhang Xiaolong has a history of controversial comments: in 2017, he criticized Baidu and Zuoyebang; in 2020, he attacked a TV show and Shen Mengchen; in 2023, he criticized the investment firm Hillhouse for selling its shares. Such incidents happen every three years, causing significant problems for the company.
The reason he can’t change is that he comes from a teaching background and has a strong desire to express himself, often with provocative remarks (similar to Luo Yonghao’s style). However, as CEO, this approach is costly: it not only offends customers and investors but also exposes internal weaknesses in the company.
Conclusion
Zhang Xiaolong’s speech was not just a slip of the tongue; it exposed the real issues at Fenbi. When a CEO focuses on the stock market rather than the core business and no one can hold him accountable, the company’s downfall is inevitable. This incident was just the final straw that led to Fenbi’s decline.