Investment Rating - The report does not provide a specific investment rating for TAL Education Group (TAL N) [3] Core Views - TAL Education Group reported better-than-expected Q1 FY2025 results with net revenue of 414million,a504396 million [2] - Non-GAAP operating profit turned positive at 088million,comparedtoamarketexpectationofa27 7 million loss [2] - Deferred revenue grew by 66% YoY to 642million,indicatingstrongbusinessmomentum[2]−Thecompany′sofflinesmall−classliteracybusinessremainstheprimaryrevenuedriver,withstableretentionandutilizationrates[2]−TALEducationGroupisexpandingitsofflineteachingcenters,with50−100newcentersopenedinQ1FY2025,bringingthetotaltoover400,anear100414 million, a 50 4% YoY increase [2] - Operating loss narrowed by 70% YoY to 1733million[2]−Non−GAAPoperatingprofitwas0 88 million, turning positive from a loss in the previous year [2] - Net income attributable to shareholders was 114million,turningpositivefromalossinthepreviousyear[2]−Non−GAAPnetincomeattributabletoshareholderswas29 61 million, turning positive from a loss in the previous year [2] - Gross margin improved by 2 4 percentage points YoY to 51 7% [2] - Sales expenses increased by 25 4% YoY to 122million,butthesalesexpenseratiodecreasedby59percentagepointsto296110 million, with the management expense ratio decreasing by 11 6 percentage points to 26 5% [2] - Share-based compensation expenses decreased by 28 6% YoY to 1821million,accountingfor440 23, with a PE ratio of 37x [3] - For FY2026E, the EPS is forecasted at $0 47, with a PE ratio of 18x [3]
