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TAL Education: What's Next

Aug. 03, 2021 11:23 AM ETTAL Education Group (TAL) StockEDU9 Comments
Chetan Woodun profile picture
Chetan Woodun


  • Far from being a general crackdown on U.S. listed stocks, the action of the Chinese government seems to address the issues emanating from an unsustainable educational system.
  • However, for those who are wondering what is coming next, it is not doomsday yet, as with scale in China and empowered with cash, TAL could diversify activities into more niche markets.
  • Also, it also has an online tutoring platform and it is unlikely that the Chinese government wants to kill its $100 billion edtech industry employing hundreds of thousands.
  • The stock is likely to continue on its downtrend as any support for the sector is not likely to be publicized by the authorities.
  • The company has potential and investors should remain on the lookout for corporate updates.

Experienced Asian female botanist, owner of small business flower shop, setting up smartphone lighting before starting online tutorial on flower bouquet arrangement, vlogging on smartphone and laptop in flower shop. E-learning, online tutorials concept
AsiaVision/E+ via Getty Images

There has been a recent crackdown with several Chinese based online education plays with their stocks listed in the United States getting hit. One of these is TAL Education Group (NYSE:TAL), a leading K-12 after-school

This article was written by

Chetan Woodun profile picture
As a tech-focused industry Research Analyst, my aim is to provide differentiated insights, whether it is for investing, trading, or informational reasons. For this purpose, I am not a classical equity researcher or fund manager, but, I come from the IT world as the founder of Keylogin Information and Technologies Co. Ltd. Thus, my research is often backed by analytics and I make frequent use of charts to support my position.I also invest, and thus, in this tumultuous market, I often look for strategies to preserve capital. As per my career history below, I have wide experience, initially as an implementer in virtualization and cloud, and I was subsequently a team leader and project lead, mostly working in telcos.I like to write around themes like automated supply chains, Generative AI, telcos Capex, the deflationary nature of software, semiconductors, etc and I am often contrarian. I have also covered biotechs.I have also been an entrepreneur in real estate ( a mediocre one), a business owner, and a farmer, and dedicate at least 5 hours per week to working on a non-profit basis. For this purpose, I help needy families by providing sponsored work and contributing peer reviews and opinions for enterprise tech.I have been investing for the last 25 years, initially in mutual or indexed funds before later opting for individual stocks. Got a lot of experience in the 2008/2009 downturn when I lost a lot due mostly to wrong advice. Since then I do my own research and have fallen in love with Seeking Alpha because of the unique perspectives it provides to someone investing hard-earned money as well as access to some of the best analysts.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

This is an investment thesis and is intended for informational purposes. Investors are kindly requested to do additional research before investing.This article has been edited with the help of Bhoshan Woodun.

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Comments (9)

Chetan Woodun profile picture
I have published an article on GOTU, along the same lines
You guys can have a look: seekingalpha.com/...
One of my readers suggested that I share it with you guys.
and others.
Since it is "...improbable that the authorities are prepared to stifle off China's $100 billion edtech industry" , which of the two is the better buy.
madbeachman profile picture
@whatDoEyeKnow China is not stifling the industry. The industry may thrive and continue to employ thousands of people. China has only said the company can't make a profit on those activities. We have lots of very large and successful non-profits US. They just don't have shareholders since there is no point in owning share of company that cannot make money.
Yes, they can take available cash to move into other (for profit) businesses. It's kind of like a SPAC now. On that from TAL had a $4B Market Cap with $2B in net cash. EDU is closer to $4B and $4B, so EDU had better prospects.
If I were going to touch either of these (which I am not!), I would go long EDU and short TAL.
Igo Player profile picture
@madbeachman no more classes on weekends and during vacation days. not just turning "non-profit".
GOTU, very high short interest, and the stock is in the focus of Reddit apes for a short squeeze.
iconstockkilledme profile picture
If it is below $3 on December 1 2021 I am done either way.
iconstockkilledme profile picture
@iconstockkilledme 6.20 now, with 100 days to expiration. 320 penny drop will it happen? At a minimum.
The CCP will not let the education sector die. The dragon has roared, but it is not going to feast. The companies (TAL and EDU) however have been overvalued, now they are back in buying territory.
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