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Research Alert: CFRA Maintains Hold Opinion On Shares Of Tal Education Group
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Research Alert: CFRA Maintains Hold Opinion On Shares Of Tal Education Group
May 6, 2024 6:28 AM

08:55 AM EDT, 05/06/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We revise our target price to USD15 from USD12 with a higher FY 25 (Feb.) P/B of 2.5x (from 2.0x), which remains a discount against its 5-year mean P/B (3.4x), justified by top-line headwinds after the for-profit tutoring ban in China since FY 22. FY 24 loss per ADS (LPADS) narrowed to USD0.01 from USD0.21. Revenue +46% to USD1.5 bln, driven by (i) learning center network expansion, (ii) higher enrichment learning programs enrollment and stable retention rate, and (iii) sustained content solutions growth momentum via product upgrades and marketing strategy optimization. Net margin improved to -0.2% (+13.1 ppts) on top-line growth and increased net non-operating income (USD49 mln, vs. negative USD82 mln in FY 23) despite higher gross cost (+56%) and marketing expenses (+63%). We project 30% p.a. revenue growth in FY 25-FY 26 on TAL's offline learning center expansion and product differentiation. Our FY 25/FY 26 EPADS forecasts are USD0.08 (from -USD0.06 LPADS)/USD0.24.

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