With a multi-faceted strategic transformation, EDU and TAL have entered a new phase of growth, riding on key themes like learning services, learning content solutions and overseas study. The distinct strategic approaches by both companies suggest that EDU mainly focuses on diversification and contextualisation of education services, whereas TAL emphasises the transformative potential of technological innovation. Maintain MARKET WEIGHT on the sector.
GREATER CHINA Economics Trade Export Growth Rebounded; Rush Order Ahead Of Tariffs? Sector Education Key growth themes in 2025 upon policy clarity and AI integration progress. Property Sales pull back mom before Chinese New Year; updates of 2024 op...
GREATER CHINA Results CSPC Innovation Pharmaceutical Co (300765 CH/BUY/Rmb31.13/Target: Rmb37.00) 9M24: Results in line; smooth progress in R&D and CSPC Baike acquisition. Dian Diagnostics (300244 CH/HOLD/Rmb12.75/Target: Rmb13.50) 9M24: Results miss; targeting 2024 regular ICL revenue growth of 10% yoy. Downgrade to HOLD. TAL Educational Group (TAL US/BUY/US$10.12/Target: US$14.00) 2QFY25: Strong earnings beat; resilient growth visibility in AI learning devices. ...
1QFY25 results beat expectations. Revenue surged 50% yoy to US$414m for 1QFY25, 5% above the street’s estimates. Non-GAAP net profit beat expectations and came in at US$30m vs consensus estimate of a US$6m net loss. TAL guided 2QFY25 revenue growth of 44-47% yoy and reach US$593m-605m, 5% above consensus estimate. However, non-GAAP operating profit is guided to decline yoy due to new product development, below expectations. Maintain BUY with a lower target price of US$12.00.
KEY HIGHLIGHTS Strategy Alpha Picks: August Conviction Calls Chinese equities fell more than 2% in July, losing initial gains after the Third Plenum did not lead to new stimulus policies. For August, 1H24 results would be the catalyst for most stocks, and we expect earnings of EV names to be under pressure given the intense price competition. We add Cosco Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and SELL on WuXi Bio and XPeng to diversify away our market risk exposur...
GREATER CHINA Strategy Alpha Picks: August Conviction Calls We expect stimulus to be announced in August and add COSCO Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and add SELL call on WuXi Bio, and XPeng. Small-Mid Cap Monthly Reiterate BUY on Crystal amid share price pullback; eyes on interim dividend surprise. Sector Automobile ...
Short Shots is a collection of technically vulnerable charts culled from the Negative Inflecting and Toppy columns within our Weekly Compass report or from various technical screening processes. The charts contained in this report have developed concerning technical patterns that suggest further price deterioration is likely. For these reasons Short Shots can also be a great source of ideas for investors interested in short-selling candidates.
The HSI and MSCI China fell 2.0% and 2.8% mom respectively in June, as investors locked in profits amid weaker-than-expected macro data. A continuation of the rally that began in January hinges on the policy announcements from the Third Plenum. Looking ahead, we remain sellers of BYD due to intense competition in the EV segment and are adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com.
GREATER CHINA Strategy Alpha Picks: July Conviction Call: Adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com to our BUY list; hedging with SELL call on BYD. INDONESIA Strategy Alpha Picks: Outperformance In Jun 24 And 2Q24: Our picks are BMRI, BBRI, EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Opting For More Adventurous Choices: Our Alpha Picks beat the KLCI again. Jul 24 picks: BURSA, Ekovest, Gamuda, Lagenda, Mah Sing, MYEG, Pekat...
GREATER CHINA Strategy Alpha Picks: July Conviction Call Adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com to our BUY list; hedging with SELL call on BYD. Small/Mid Cap Highlights Crystal International (2232 HK/BUY/HK$3.95/Target: HK$4.76) 1Q24 preview: Expecting interim DPS to more than double. INDONESIA Strategy Alpha Picks: Outperformance In Jun 24 And 2Q24 Our picks are BMRI, BBRI, EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSM...
This year marks the third year after the “Double Reduction” policy was introduced. During these three years, EDU and TAL adopted a multi-faceted approach to foster healthy long-term growth. The key growth catalysts include: a) normalised regulatory tone, b) AIGC integration and smart devices, and c) diversified revenue stream with overseas exposure. We opine that the near-term drag on margins is mainly due to investment to foster sustainable growth. We maintain MARKET WEIGHT on the sector.
To navigate headwinds brought about by the “Double Reduction” policy, TAL underwent an overhaul by pivoting the non-academic education business development. This includes venturing into a diverse range of businesses such as enrichment learning, learning devices, and content solutions based on large models. We opine the softened regulatory backdrop bodes well for TAL’s viable strategic transition as evidenced by its promising 4QFY24 results. Upgrade to BUY with a higher target price is US$16.30.
KEY HIGHLIGHTS Sector Internet We expect lukewarm mobile grossing growth in 1Q24, with an expected reacceleration in 2Q24, primarily boosted by the release of several highly-anticipated blockbuster titles. We are optimistic on the growth of the online games sector in 2024 as it will be driven by a further acceleration in Banhao approvals, consolidation towards top game producers and the emerging popularity of mini-games. Maintain MARKET WEIGHT. Update Budweiser APAC (1876 HK/BUY/HK$11.00/...
GREATER CHINA Sector Internet: Expect growth momentum to reaccelerate in 2Q24 with release of blockbuster games. Update Budweiser APAC (1876 HK/BUY/HK$11.00/Target: HK$17.00): Base effect and bad weather to impact sales volume growth in 2Q24 in China. TAL Educational Group (TAL US/BUY/US$13.14/Target: US$16.30): Moderate regulatory tone; viable strategic transition to non-academic education. MALAYSIA Initiate Coverage Lagenda Properties (LAGENDA MK/BUY/RM1.66/Target: RM2.05): A legend in the af...
Two Directors at Tal Education Group sold 1,545,087 shares at 14.920USD. The significance rating of the trade was 100/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years...
The independent financial analyst theScreener just awarded an improved star rating to TAL EDUCATION GROUP (US), active in the Personal Products & Services industry. As regards its fundamental valuation, the title receives an improved star rating and now shows 4 out of 4 possible stars. With regard to its market behaviour, it remains unchanged and can be qualified as risky. theScreener considers that these elements allow slightly upgrading its rating to Neutral. As of the analysis date March 25, ...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
Speculation of the “Double Reduction” policy late Friday last week sent all K12 ASTs’ ADR nosediving by >50% to new record lows. Major clauses of the policy include prohibition of vacation tutoring courses, limited teaching hours and prohibition of the VIE structure in AST companies, according to the government announcement last Saturday. We maintain our UNDERWEIGHT call on China’s education sector due to restrictive supply control measures.
We think the market is of the view that the AST segment is facing slower industry growth due to supply control, as well as long-term demand impact due to the potentially larger in-school after-class services supply. We believe larger players like TAL and EDU will have the financial strength to weather the headwind, but the industry’s growth outlook remains muted. On that note, we performed a scenario analysis on the potential financial impact on TAL and EDU. Downgrade the sector to UNDERWEIGHT.
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