Beijing’s crackdown on education got Wall Street’s attention anew on Monday, with more downgrades for U.S.-listed shares as analysts tallied up damages.

On Friday, J.P. Morgan cut shares of New Oriental Education & Technology Group
EDU,
-33.79%
,
TAL Education Group
TAL,
-26.67%

and Gaotu Techedu
GOTU,
-28.98%
,
after media reports that the Chinese government is considering new regulations concerning after-school tutoring services.

Those reports were confirmed on over the weekend, in restrictions published by state media under the title “Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education.” New Oriental and Gaotu were down another 12% each on Monday, following Friday’s action that saw respective 54% and 65% falls for those companies. Shares of TAL Education slid another 13% on Monday, after plummeting 71% on Friday.

Also read: China-based education stocks rocked on worries over new PRC regulations.

Beijing’s moves are aimed at trying to curb soaring educational costs that have discouraged families from expanding.

Fawne Jiang, an analyst at The Benchmark Company, said in a note to clients on Monday that the new policies will have a “profound impact on the AST [after-school tutoring ] industry and adversely change the course of the operation and the financial outlook of the industry participants.”

The analyst said investors are clearly “entering uncharted territory with substantial moving parts,” and limited visibility. Benchmark cut the sector to hold from buy, alongside shares of New Oriental Education and China Online Education
COE,
-26.58%
,
another U.S.-listed stock that fell 43% on Friday, and was down 12% to start the week.

In a statement, New Oriental said it would “follow the spirit of the Opinion and comply with relevant rules and regulations when providing educational services,” with a similar statement from TAL and Gaotu.

A statement from yet another U.S.-listed player, Youdao
DAO,
-33.41%
,
a China-based intelligent learning group, said the rules would have “material impacts” on its K-12 course business, and added it was looking at ways to try to comply. Shares of Youdao fell 26% on Monday after a 42% tumble on Friday.

Some analysts had seen the crackdown coming from even further away. Citgroup downgraded TAL, Gaotu and Koolearn Technology Holding,
1797,
-33.45%
,
which doesn’t have a U.S. listing, to sell on June 11, but kept a buy rating on Oriental (EDU) given its exposure to non-K12 tutoring. The analysts referred to a comment from China President Xi Jinping at the time, who had said “students should not rely for their studies on after-school tutoring (AST)”, as a signal of tightening to come.

“The implications of the new regulations are not pretty at all,” said a Citi team led by Thomas A Singlehurst, in a note to clients on Monday. “Looking specifically at the education names under our coverage in Europe and the U.S., we think the implications are fairly limited because there is limited direct involvement in the China education market.

“The question more broadly is whether this will have broader ramifications for other tech companies in China. It is beyond our remit to judge, but with separate stories about regulation of music it is beginning to look like there might be,” he said.

The news came on as Beijing on Saturday ordered tech conglomerate Tencent
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to end exclusive contracts with music copyright holders — U.S.-listed shares of Tencent Music
TME,
-2.97%

dropped 8% in New York on Monday.

Steely nerves as a requirement of investing in China stocks is nothing new, given months of news over crackdowns stretching back to at least October when regulators postponed the initial public offering of Ant Group, operator of China’s popular Alipay mobile wallet. Moves since then have included a record $2.8 billion fine for industry leader Alibaba
BABA,
-7.15%

amid scrutiny over the business empire of founder Jack Ma, who founded Ant Group.

Earlier this month, the Chinese government blocked new users from downloading apps from Didi Global Inc.
DIDI,
-0.25%
,
 the country’s answer to Uber Technologies 
UBER,
-1.37%
.
That’s as U.S. regulatory moves have also made some investors wary about holding China stocks listed in New York.

Opinion: This is your final warning — Chinese stocks listed in the U.S. are dangerous to hold

Investors perhaps need to dig a bit deeper when it comes to U.S.-listed Chinese companies, said Mike O’Rourke, chief market strategist at JonesTrading, in a note to clients on Monday. He said TAL’s Form 20-F Securities and Exchange Commission filings for the past 3 years has listed draft rules over private education under its “Risks Related to our Corporate Structure.” 

The company stated potential challenges if those rules came into law. “Going forward, investors will more heavily scrutinize the risk factors in SEC filings of U.S.-listed Chinese companies,” said O’Rourke.

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