ASEAN (Indo) & China-focused. Ex-Deputy HoR UBS.

Johannes Salim, CFA

<ul>
<li>After-school tutoring industry growth of 13% CAGR last five years does not jibe with <a href="https://www.smartkarma.com/entities/1124" target="_blank" data-smartkarma-citation="entities:1124:1">Tal Education (TAL US)</a>'s 49% sales CAGR (excluding faster growing online business).</li>
<li>Our further analysis reveals that "off the charts" learning center productivity growth largely contributes to TAL's spectacular top-line growth, ironically raising more questions than answers.</li>
<li>Subsequently, trading at 68.1x/44.4x FY19/20 PE certainly points to a lot more downside risks to TAL's ADS price.</li>
</ul>


After-school tutoring industry growth of 13% CAGR last five years does not jibe with Tal Education (TAL US)'s 49% sales CAGR (excluding faster growing online business).
Our further analysis reveals that "off the charts" learning center productivity growth largely contributes to TAL's spectacular top-line growth, ironically raising more questions than answers.
Subsequently, trading at 68.1x/44.4x FY19/20 PE certainly points to a lot more downside risks to TAL's ADS price.


TAL Education: Too Good to Be True? Buyer Beware!