T. H. Data Flash – Chinese TAL Education – August & FY2Q20E: High Growth In Course and Attendee Capacity Drive Better FY2Q20; Maintain BUY
We are positive on TAL’s performance in FY2Q20. The company lowered its FY2Q20 revenue guidance as well as guided down its margins due to its online education expansion efforts. However, based on our data and model, we believe TAL’s FY2Q20E revenue is likely to be higher than consensus at $916M. Peiyou is likely to reach $696M in FY2Q20, growing 25.0% Y/Y vs. 20.0% Y/Y growth in FY1Q20; its course and attendee capacities increased significantly due to its dual teacher and Peiyou Online.