The renewed interest in the Xueda Education Group (XUE) due to an end to "one-child policy" of China is well justified but there is much more to the long thesis than just a favorable macro environment for the private tutoring sector.
Xueda has turned the corner with improved productivity and revenue growth as evidenced by the good results in a seasonally weak third quarter. Going forward, labor and space efficiencies should further help the profitability and new products like "Small Group Study" can keep the revenue growth momentum going.
In sharp contrast to the US for-profit education space, Xueda and China's tutoring sector is also benefiting from helpful state policies, demographic trends and limited loan or state...
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