SecProbe.io

CORRESP
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January
12, 2023

Division
of Corporation Finance

U.S.
Securities & Exchange Commission

100 F Street, NE

Washington,
D.C. 20549

 Re: Sunlands Technology Group

Form
20-F for the Year Ended December 31, 2021

Filed April 27, 2022

File
No. 001-38423

    Attn:
    Division of Corporation Finance

                                                                Office of Trade & Services

VIA
EDGAR

Dear
Nasreen Mohammed, Joel Parker, Alyssa Wall and Taylor Beech:

This
letter sets forth the responses of Sunlands Technology Group (the “Company”) to the comments (the “Comments”)
the Company received from the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
in a letter dated December 23, 2022.

For
the Staff’s convenience, we have included herein the Comments in bold, and the Company’s responses are set forth immediately
below the Comments.

General
Note to the Staff:

The
Company respectfully submits in this letter its proposed amendments to the disclosures contained in the Company’s annual report
on Form 20-F for the fiscal year ended December 31, 2021 filed with the Commission on April 27, 2022 (the “2021 Annual Report”)
(with new language indicated by underlines and deleted language indicated by strike-through marks). The Company undertakes to include
the proposed disclosures substantially as set forth below in its annual report on Form 20-F for the fiscal year ended December 31, 2022
(the “2022 Annual Report”), subject to the Staff’s further review and comment with appropriate revisions and updates
to reflect the Company’s circumstances at the time when it files the 2022 Annual Report.

Form
20-F for the Year Ended December 31, 2021

Item
3. Key Information, page 1

1.
Please explain whether the VIE structure is used to provide investors with exposure to foreign investment in China-based companies
where Chinese law prohibits direct foreign investment in the operating companies.

Response

In
response to the Staff’s Comments, the Company intends to revise the first paragraph under “Contractual Arrangements and Corporate
Structure” on page 46 of the 2021 Annual Report to clarify that the VIE structure is used to provide investors with exposure to
foreign investment in China-based companies where Chinese law prohibits direct foreign investment in the operating companies. Please

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see the Company’s
responses to comment 4 below for the revised disclosure. The Company will include comparable disclosure in the 2022 Annual Report.

2.
Please remove your disclosure that uses terms such as “we” or “our” (i.e. “our consolidated VIEs”)
when describing activities or functions of the VIEs, as you do not have ownership or control of the VIEs.

Response

In response to the
Staff’s Comments, the Company intends to revise the definition of “we,” “us,” “our company,”
“our Company,” “our Group” and “our” on pages i and 1 of the 2021 Annual Report as follows:

“we,” “us,”
“our company,” “our Company,” “our Group” and “our,” refer to Sunlands Technology Group,
previously known as Sunlands Online Education Group, a Cayman Islands company and its subsidiaries and, in the context of describing
our operations and consolidated financial information, its consolidated variable interest entities, or VIEs, and VIEs’ subsidiaries.

The
Company also undertakes to include such revised definition in the 2022 Annual Report and ensure the disclosures throughout the 2022 Annual
Report will clearly differentiate the holding company and its subsidiaries on the one hand from the VIEs on the other hand.

3.
We note you carve Hong Kong out from your definition of “China” or “PRC.” Please expand your disclosure
to clarify that the legal and operational risks associated with operating in China also apply to operations in Hong Kong. Additionally,
please discuss the applicable laws and regulations in Hong Kong, as well as the related risks and consequences. For example, address how
regulatory actions related to data security or anti-monopoly concerns in Hong Kong have or may impact the company’s ability to conduct
its business, accept foreign investment or list on a U.S. or foreign exchange. Move your various discussions of China’s Enterprise
Tax Law to a more prominent place in this Item 3.

Response

In
response to the Staff’s Comments, the Company respectfully advises the Staff that it intends to revise the definition of “China”
or “PRC” on page i of the 2021 Annual Report as follows. The Company will include comparable disclosure in the 2022 Annual
Report.

“China”
or “PRC” refers to the People’s Republic of China; excluding, for the purposes of this annual report only,
and only in the context of describing PRC laws, regulations and other legal or tax matters in this annual report, excludes Hong
Kong, Macau and Taiwan;

The
Company also intends to clarify, as applicable, that the legal and operational risks associated with operating in China also apply to
operations in Hong Kong throughout the annual report. Please see the Company’s responses to comment 11 below for the revised disclosure.
The Company will include comparable disclosure throughout the 2022 Annual Report.

The
Company respectfully advises the Staff that it does not have material operations in Hong Kong. The Company did not have any revenue generated
in Hong Kong for the years ended December 31, 2019, 2020 and 2021 and currently does not have any employees or material assets or licenses
in Hong Kong. Furthermore, the Company currently does not consider Hong Kong to be a main target market or expect to have material operations
in Hong Kong in the foreseeable future.

In
light of the foregoing, the Company respectfully submits that the regulatory actions related to data security or anti-monopoly concerns
in Hong Kong do not have a material impact on its ability to conduct its business, accept foreign investment or list on a U.S. or foreign
exchange.

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In
response to the Staff’s Comments, the Company intends to move up the risk factors “—If we are classified as a PRC resident
enterprise for PRC enterprise income tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC
shareholders and ADS holders” and “—We face uncertainty with respect to indirect transfers of equity interests in PRC
resident enterprises by their non-PRC holding companies” to a more prominent place in this Item 3, right before the risk factor
“—We cannot assure you that we will not be subject to liability claims or legal or regulatory liability for any inappropriate
or illegal content, which could subject us to liabilities and cause damages to our reputation” on page 17, in the 2021 Annual Report.
The Company will also include comparable disclosure in the 2022 Annual Report.

4.
We note your disclosure of the organizational structure of your company and contractual arrangements with the consolidated VIEs
beginning on page 81. Please provide the diagram of the company’s corporate structure early in Item 3. Please also revise your diagram
to remove arrows on the dashed lines representing relationships with the VIEs. Also in Item 3, please describe all contracts and arrangements
through which you claim to have economic rights and exercise control that results in consolidation of the VIEs’ operations and financial
results into your financial statements. Describe the relevant contractual agreements between the entities and how this type of corporate
structure may affect investors and the value of their investment, including how and why the contractual arrangements may be less effective
than direct ownership and that the company may incur substantial costs to enforce the terms of the arrangements. Disclose the uncertainties
regarding the status of the rights of the Cayman Islands holding company with respect to its contractual arrangements with the VIEs, the
VIEs’ founders and owners, and the challenges the company may face enforcing these contractual agreements due to legal uncertainties
and jurisdictional limits.

Response

In
response to the Staff’s Comments, the Company respectfully advises the Staff that it intends to update the diagram illustrating
its organizational structure on page 81 of the 2021 Annual Report to address the Staff’s Comments and disclose the revised diagram
prominently on page 1 of the 2021 Annual Report under “Item 3. Key Information—Our Holding Company Structure.” The Company
will include the revised diagram in the 2022 Annual Report.

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In
responses to the Staff’s Comments, the Company respectfully advises the Staff that it intends to revise the paragraphs on page 46
as follows and will include the same revised disclosure prominently on page 2 of the 2021 Annual Report under “Item 3. Key Information.”
The Company will also include comparable disclosure in the 2022 Annual Report.

Contractual
Arrangements and Corporate Structure

We are
a Cayman Islands company and currently conduct substantially all of our business operations in the PRC through our subsidiaries
incorporated in the PRC, and the contractual arrangements among our PRC subsidiaries and the VIEs. Our
subsidiaries control the VIEs in the PRC, through a series of contractual arrangements. We conduct a significant portion of our businesses
in China through the VIEs. It is the VIEs that hold our key operating licenses, provide services to our
customers, and enter into contracts with our suppliers. We operate our businesses this way
because PRC laws and regulations restrict foreign investment in companies that engage in value-added telecommunication services. These
contractual arrangements entered into with the VIEs allow us to (i) exercise effective control over the VIEs (i) direct
the activities of the VIEs that most significantly impact the VIEs’ economic performance, (ii) receive substantially all of
the economic benefits of the VIEs, and (iii) have an exclusive option to purchase all or part of the equity interests in the VIEs when
and to the extent permitted by PRC law. The VIE structure is used to provide investors with exposure to foreign investment in China-based
companies where PRC law restricts direct foreign investment in such operating companies in the PRC. These contractual arrangements
include the operating agreements, equity pledge agreements, exclusive purchase option agreements, shareholder voting right trust agreements,
loan agreements, and cooperation agreements, as the case may be. As a result of these contractual arrangements, we exert effective
control over, and are considered the

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primary beneficiary of the
VIEs for accounting purposes and are able to consolidate their operating results in our financial statements under U.S. GAAP.

It is important to note
that investors in the ADSs are purchasing equity securities of a Cayman Islands holding company rather than equity securities issued by
our subsidiaries and the VIEs. More specifically, investors in the ADSs or our ordinary shares would not be holding any ownership interest,
directly or indirectly, in the VIEs under current PRC laws and regulations as investors would only have the contractual relationship with
the operating entities in the PRC. Neither such investors nor the holding company itself have an equity ownership in, direct investment
in, or control of, through such ownership or investment, the VIEs. Investors who are non-PRC residents may never directly hold equity
interests in the VIEs under current PRC laws and regulations.
We do not have any equity interests in the VIEs who are owned by certain nominee shareholders. Any of such nominee shareholders could
breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking
other actions that are detrimental to our interests. In the event that the shareholders of the VIEs breach the terms of these contractual
arrangements and voluntarily liquidate the VIEs, or the VIEs declare bankruptcy and all or part of their assets become subject to liens
or rights of third-party creditors, or are otherwise disposed of without our consent, we may be unable to conduct some or all business
operations or otherwise benefit from the assets held by the VIEs and their shareholders, which could have a material adverse effect on
our and the VIEs’ business, financial condition and results of operations. As a result, control through these
contractual arrangements may be less effective than direct ownership, and we could face heightened challenges, risks and costs
in enforcing these contractual arrangements due to legal uncertainties and jurisdictional limits, because there are substantial
uncertainties regarding the interpretation and application of current and future PRC laws, regulations, and rules relating to the legality
and enforceability of these contractual arrangements. If the PRC government finds such agreements to be illegal, we could be subject to
severe penalties or be forced to relinquish our interests in the VIEs.

The
Company further respectfully directs the Staff to pages 81 to 84 of the 2021 Annual Report for a detailed discussion of the company’s
corporate structure, including who hold equity ownership interests of each entity, and all contracts and arrangements through which the
Company claims to have economic rights and exercises control that results in consolidation of the VIEs’ operations and financial
results into the Company’s financial statements. The Company intends to include the same disclosure on page 2 of the 2021 Annual
Report under “Item 3. Key Information” as well and will also include comparable disclosure in the 2022 Annual Report.

5.
We note your disclosure that the Cayman Islands holding company controls and receives the economic benefits of the VIEs’
business operations through contractual agreements between the VIEs and your Wholly Foreign-Owned Enterprises (WFOEs). We also note your
disclosure that the Cayman Islands holding company is the primary beneficiary of the VIEs. However, neither the investors in the holding
company nor the holding company itself have an equity ownership in, direct foreign investment in, or control of, through such ownership
or investment, the VIEs. Accordingly, please revise your disclosure to refrain from implying that the contractual agreements are equivalent
to equity ownership in the business of the VIEs. Any references to control or benefits that accrue to you because of the VIEs should be
limited to a clear description of the conditions you have satisfied for consolidation of the VIEs under U.S. GAAP. Additionally, your
disclosure should clarify that you are the primary beneficiary of the VIEs for accounting purposes. Please also disclose, if true, that
the VIE agreements have not been tested in a court of law. This comment applies to disclosure about the VIEs throughout the filing.

Response

In responses
to the Staff’s Comments, the Company intends to revise the disclosure on page 1 of the 2021 Annual Report as follows and as set
forth in its responses to comment 4 above, as well as to revise

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the other disclosures
about the VIEs throughout the filing accordingly. The Company will include such revised disclosures in the 2022 Annual Report.

Our
Holding Company Structure

Sunlands
Technology Group is a Cayman Islands holding company. It conducts its operations in China through its PRC subsidiaries and consolidated
variable interest entities, or the VIEs. However, we and our direct and indirect subsidiaries do not, and it is virtually impossible
for them to, have any equity interests in the VIEs in practice as current PRC laws and regulations restrict foreign investment in companies
that engage in value-added telecommunication services. As a result, we depend on certain contractual arrangements with the VIEs to operate
a significant portion of our business. This structure allows us to exercise effective control over the VIEs,
and is design