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TAL Education Group (NYSE:XRS), a tutoring services institute, priced its IPO on 19 October, 2010 at $10 per ADS, at high end of expected range, generating first day return of 50%.

Business Overview (from prospectus)

We offer comprehensive tutoring services to K-12 students covering core academic subjects, including mathematics, English, Chinese, physics, chemistry and biology. We have successfully established “Xueersi” as a leading brand in China’s K-12 private education market closely associated with high teaching quality and academic excellence in China, as evidenced by our students’ outstanding academic performance, our over 70% annual retention rate, our ability to recruit most of our students through word-of-mouth referrals as well as the numerous recognitions and awards we have received. The K-12 after-school tutoring service market in China is highly fragmented. In 2009, we had a 0.26% market share in China and a 4.5% market share in Beijing, in each case as measured by revenues for the year according to iResearch.

We deliver our tutoring services through small classes, personalized premium services (i.e., one-on-one tutoring) and online course offerings. Our extensive network consists of 109 learning centers and 87 service centers in Beijing, Shanghai, Shenzhen, Guangzhou, Tianjin and Wuhan, as well as our online platform.

Offering: 12 million ADS at $10 per ADS. Net proceeds of aproximately $30.0 million will be used to expand the network of learning centers, approximately $15.0 million to build a national training center, $30.0 million to pay a declared dividend, and approximately $10.0 million to improve facilities.

Lead Underwriters: Credit Suisse (NYSE:CS), Morgan Stanley (NYSE:MS)

Financial Highlights:

Net revenues increased by 60.8% from $33.0 million for the six months ended August 31, 2009 to $53.0 million for the six months ended August 31, 2010...Cost of revenues increased by 63.4% from $16.1 million for the six months ended August 31, 2009 to $26.3 million for the six months ended August 31, 2010...Gross profit margin was 50.5% for the six months ended August 31, 2010, as compared to 51.3% for the six months ended August 31, 2009...Operating expenses increased by 82.8% from $6.6 million for the six months ended August 31, 2009 to $12 million for the six months ended August 31, 2010...Net income increased by 40.5% from $9.4 million for the six months ended August 31, 2009 to $13.2 million for the six months ended August 31, 2010...

Competitors

The after-school tutoring service sector in China is rapidly evolving, highly fragmented and competitive. We face competition in each type of service we offer and each geographic market in which we operate. Our competitors at the national level include New Oriental Education & Technology Group Inc. (NYSE:EDU), Juren Education, Ambow Education Holding Ltd. (NYSE:AMBO), Xueda Education Technology (Beijing) Co., Ltd. and ChinaEdu Corporation (NASDAQ:CEDU). We also face regional competition from various local players.

Additional Resources:

Source: TAL Education Group Prices IPO at High End of Range