Summary of TAL Education Group Conference Call Company Overview - **Company**: TAL Education Group (TAL.N) - **Industry**: Education - **Region**: Asia Pacific, specifically China Key Financial Results - **F2Q26 Performance**: - Revenue increased by **39% year-over-year** to **US$861 million**, exceeding Bloomberg consensus by **4%** [2] - Non-GAAP operating profit reached **US$108 million**, which is **16% above** Visible Alpha consensus, resulting in an operating margin of **12.5%**, up **2.1 percentage points** from **10.4%** in F2Q25 [2] - Non-GAAP net profit was **US$136 million**, **39% above** Bloomberg consensus, with a net margin of **15.8%**, up **3.8 percentage points** from **12.0%** in F2Q25 [2] Shareholder Returns - TAL repurchased **US$134.7 million** in shares from July 31 to October 29, with **US$465.3 million** remaining under its **US$600 million** buyback program effective through July 2026 [2] - Current market capitalization implies an approximate **8% shareholder return yield** [2] Future Outlook - **F2026 Projections**: - Revenue is projected to grow by **38% year-over-year** [3] - Non-GAAP operating profit expected to be **US$164 million** with an operating margin of **5.3%** [3] - Non-GAAP net profit forecasted at **US$248 million**, with a net margin of **8.0%** [3] Price Target and Valuation - Price target raised from **US$13.00 to US$14.60**, reflecting a **36x** F2026e and **25x** F2027e non-GAAP P/E ratio, justified by an earnings CAGR of **37%** from F2026 to F2029 and **30%** from F2027 to F2030 [4][14] - DCF-based valuation methodology applied, with a **14% WACC** and a **3% terminal growth rate** [13][20] Investment Thesis - TAL is expanding into new business areas, including non-academic tutoring, content solutions, overseas markets, and learning technology solutions [26] - The company has sufficient net cash to support future development and has improved shareholder returns through buybacks [26] - Strong demand for educational businesses and a better competitive environment compared to other internet industry segments [26] Risks and Considerations - Potential risks include regulatory changes affecting high school and non-academic tutoring, competition in smart learning devices, and heavier-than-expected investments in new businesses that could erode margins [36] Conclusion - TAL Education Group shows strong financial performance and growth potential, with a positive outlook for future revenue and profitability, supported by strategic expansions and shareholder return initiatives. The raised price target reflects confidence in the company's growth trajectory and market position.