TAL Education Group (TAL.US) 21Q2 performance comments: income growth is in line with expectations, performance is dragged down by sales expenses, and will increase investment in "local online schools"

方正證券 · Oct 23, 2020 20:30 · Researches

事件：

1、好未来(TAL.US)FY21Q2营业收入为11.03亿美元(YoY+20.8%)，归母净利润为1496.9万美元(YoY+163.6%)，Non-GAAP归母净利润为5227.6万美元(YOY+881%)。

2、FY21Q2长期正价课报名人次为563.2万(YoY+65%)。截至FY21Q2，教学中心共936个，覆盖城市91个。

3、FY21Q3指引：营收区间预计为10.61~10.94亿美元，YOY+28%~32%。

点评：

1、营收11亿美元同增21%，销售费用增加至3.8亿美元。

营业收入符合预期：FY21Q2营业收入为11.03亿美元，YoY+20.8%，贴上季度指引上限11.1亿美元。

毛利率同比下滑3pct：FY21Q2主营业务成本为5.22亿美元，YoY+29.1%，毛利润5.81亿美元，YoY+14.3%;毛利率52.7%，较去年同期下滑3pct，成本的提升及毛利率的下降主要由于教师薪酬、租金成本，以及学习材料成本的增加。

销售费用率提升明显：FY21Q2销售费用为3.8亿美元(YoY+44.3%)，销售费用率为34.4%，较去年同期提升了5.6pct，主要来自市场推广费用以及销售和营销人员薪酬提升。

管理费用：FY21Q2管理费用为2.54亿美元(YoY+33.5%)，管理费用率为23%，较去年同期提高2.2pct。Non-GAAP管理费用(不考虑股权激励开支)为2.26亿美元(YoY+36.5%)。

经营利润率有所下滑：FY21Q2经营利润为-4911.6万美元，YoY-180.8%，经营利润率-4.5%，较上年同期下滑11.1pct。Non-GAAP经营利润为-1180.9万美元，YoY-113.2%，non-GAAP经营利润率为-1.1%，较上年同期下滑10.9pct。

归母净利润率同比改善：FY21Q2归母净利润为1496.9万美元，YoY+163.6%，归母净利率1.4%，较上年同期提升3.9pct;Non-GAAP归母净利润为5227.6亿美元，YoY+881%，non-GAAP归母净利率为4.7%，较上年同期提高4.2pct。归母净利润的改善主要由于①FY21Q2其他收入4533万美元，去年同期为-5555.5万美元，其他收入主要来自卫生事件期间政府提供的增值税和社会保障费用减免;②FY21Q2长期投资减值损失收窄为4910万美元，去年同期为6080万美元。

现金流、资本开支：FY21Q2的净经营现金流量约为-5627.3万美元;资本开支约为6780万美元。

现金、现金等价物和短期投资：截至FY21Q2期末，公司现金、现金等价物和短期投资余额为27.9亿美元，FY21Q1为29.1亿美元。

递延收入：截至FY21Q2期末，公司递延收入余额为11.7亿美元，YoY+135.6%，主要由于学而思培优小班和网校提前收取了部分秋季学期的费用。

2、长期正价课报名人次达563万同增65%，其中网校超290万，同增116%;线下网点暂缓扩张，网校收入占比26%，同增87%。报名人次增长65%：FY21Q2长期正价报名人次约563.2万，去年同期为341.3万，YoY+65%。

线下中心受卫生事件影响环比不变，未来仍将加速扩张：截至FY21Q2末，公司开设教学中心共936个，同比增加178个，环比不变;其中，学而思培优小班学习中心716个，摩比和励步小班学习中心91个，智康学习中心129个。截至FY21Q2末，覆盖城市91个(中国90个，美国1个)，同比增加22个，环比增加1个(咸阳)。

分业务情况：

(1)小班业务及其他：FY21Q2小班及其他业务收入占总收入的比重从去年同期的75%下降至今年的67%，对应收入约7.4亿美元，YoY+8%/8%(以美元/人民币计)。其中，学而思培优小班收入占总收入的比重为57%，对应收入约为6.3亿美元，YoY+7%/7%(以美元/人民币计)，学而思培优小班FY21Q2的ASPYoY-19%/-18%，主要由于卫生事件期间的线上线下融合，长期正价课报名人次YoY+31%。

(2)1对1业务：FY21Q2

1对1业务收入占总收入的比重约为7%，对应收入约7700万美元，YoY+6%/6%(以美元/人民币计)。1对1业务ASPYoY+4%/4%(以美元/人民币计)。

(3)网校业务：FY21Q2学而思网校业务收入占总收入的比重从去年同期的17%提高至26%，对应收入约为2.9亿美元，YoY+87%/88%(以美元/人民币计)，长期正价课报名人次超过290万,YoY+116%,ASPYoY+1%/1%(以美元/人民币计)。

3、盈利预测与估值：短期来看，随着9月以来全国多数地区中小学线下复课，我们认为卫生事件对于公司线下培训业务的影响可能进一步消退，带动Q3、Q4收入利润反弹。中长期来看，①在线方面，管理层在财报电话会议中提及将加大对「本地网校」(本地内容、本地老师、本地同学、本地服务)的投入，考虑到公司在教师供给能力、内容研发能力、品牌影响力等方面的优势，我们看好公司保持在线K12龙头地位的发展前景;②线下方面，K12培训市场卫生事件期间加速出清，未来集中度仍将提升，利好龙头。根据一致预期，公司FY2021-FY2023净利润为3.16/6.41/10.49亿美元，EPS为0.53/1.07/1.75美元，对应PE为125.8/62.0/37.9X。

风险提示：公共卫生事件风险、课外培训政策趋严风险、学生人数增加不达预期风险、在线教育行业竞争加剧风险、实体中心扩张不及预期风险、汇率波动风险、市场竞争加剧风险、估值中枢下移风险等。

Events:

1. TAL Education Group (TAL.US) FY21Q2 operating income is $1.103 billion (YoY+20.8%), net profit is $14.969 million (YoY+163.6%), and net profit of Non-GAAP is $52.276 million (YOY+881%).

2. The number of applicants for FY21Q2 long-term positive price course is 5.632 million (YoY+65%). As of FY21Q2, there are 936 teaching centers, covering 91 cities.

3. FY21Q3 guidelines: revenue range is expected to be $10.61 to $1.094 billion, YOY+28%~32%.

Comments:

1. Revenue of US $1.1 billion increased by 21%, and sales expenses increased to US $380 million.

Operating income is in line with expectations:FY21Q2 had revenue of $1.103 billion, and YoY+20.8%, posted a quarterly guidance cap of $1.11 billion.

Year-on-year decline in gross margin 3pct:The cost of FY21Q2's main business is US $522 million, YoY+29.1%, 's gross profit is US $581 million, and YoY+14.3%; 's gross profit margin is 52.7%, a decline in 3pct compared with the same period last year. The increase in costs and the decline in gross profit margin are mainly due to the increase in teachers' salaries, rental costs, and the cost of learning materials.

The rate of sales expenses has increased significantly:FY21Q2's sales expenses were $380 million (YoY+44.3%), with a sales expense rate of 34.4%, an increase in 5.6pct over the same period last year, mainly due to marketing expenses and higher salaries for sales and marketing personnel.

Administrative expenses:The management fee of FY21Q2 is US $254 million (YoY+33.5%), and the management expense rate is 23%, which is higher than that of the same period last year (2.2pct). The Non-GAAP management fee (excluding equity incentive expenses) is $226 million (YoY+36.5%).

Operating margins have declined:FY21Q2's operating profit was-$49.116 million, while YoY-180.8%, 's operating margin was-4.5%, down 11.1pct from a year earlier. Non-GAAP 's operating profit was-$11.809 million, while YoY-113.2%,non-GAAP 's operating margin was-1.1%, down 10.9pct from a year earlier.

The net profit margin of homing has improved compared with the same period last year:The net profit of FY21Q2 was US $14.969 million, and the net interest rate of YoY+163.6%, was 1.4%, an increase of 3.9pct.com over the same period last year. The net profit of YoY+881%,non-GAAP was US $522.76 billion, while that of YoY+881%,non-GAAP was 4.7%, which was higher than that of the same period last year. The improvement in homing net profit was mainly due to ① FY21Q2's other income of $45.33 million, compared with-$55.555 million in the same period last year, which was mainly derived from VAT and social security fee deductions provided by the government during health events; the impairment loss on ② FY21Q2's long-term investment narrowed to $49.1 million, compared to $60.8 million in the same period last year.

Cash flow, capital expenditure:FY21Q2's net operating cash flow is approximately-$56.273 million; capital expenditure is approximately $67.8 million.

Cash, cash equivalents and short-term investments:At the end of the FY21Q2 period, the company's cash, cash equivalents and short-term investment balances were $2.79 billion and FY21Q1 was $2.91 billion.

Deferred income:As of the end of the FY21Q2 period, the company's deferred income balance was $1.17 billion, and YoY+135.6%, charged part of the autumn semester fees in advance for small classes and online schools.

2. The number of applicants for long-term regular price courses reached 5.63 million, with an increase of 65%, of which online schools exceeded 2.9 million, with an increase of 116%. Offline outlets suspended expansion, and online school income accounted for 26%, an increase of 87%. The number of applicants increased by 65%:The long-term full price of FY21Q2 is about 5.632 million, compared with 3.413 million in the same period last year, YoY+65%.

The offline center is affected by health events and will continue to expand faster in the future.By the end of FY21Q2, the company had opened a total of 936 teaching centers, an increase of 178 compared with the same period last year, including 716 excellent and small class learning centers, 91 Mobi and Lipu small class learning centers, and 129 Zhikang learning centers. By the end of FY21Q2, 91 cities (90 in China and 1 in the United States) were covered, an increase of 22 over the same period last year and 1 month-on-month increase (Xianyang).

Sub-business situation:

(1) small class business and others:The share of income from FY21Q2 small classes and other businesses in total revenue fell from 75 per cent in the same period last year to 67 per cent this year, corresponding to income of about $740 million, YoY+8%/8% (in US dollars / RMB). Among them, the income of the small class accounts for 57% of the total income, and the corresponding income is about US $630 million, YoY+7%/7% (in US dollars / RMB). The ASPYoY-19%/-18%, of the small class FY21Q2 mainly due to online and offline integration during health events, long-term positive price class registration YoY+31%.

(2) 1-to-1 business:FY21Q2

1-to-1 business revenue accounts for about 7% of total revenue, corresponding to about US $77 million, YoY+6%/6% (in US dollars / RMB). 1 to 1 business ASPYoY+4%/4% (in US dollars / RMB).

(3) online school business:The proportion of FY21Q2 learning and thinking online school business in total revenue increased to 26% from 17% in the same period last year, corresponding to about US $290 million, YoY+87%/88% (in US dollars / RMB), and more than 2.9 million applicants for long-term positive price courses, YoY+116%,ASPYoY+1%/1% (in US dollars / RMB).

3. Profit forecast and valuation:In the short term, with the resumption of offline classes in primary and secondary schools in most parts of the country since September, we believe that the impact of health events on the company's offline training business may further fade, leading to a rebound in Q3 and Q4 revenue and profits. In the medium to long term, in terms of ① online, management mentioned in the earnings call that it would increase investment in "local online schools" (local content, local teachers, local students, local services). Considering the company's advantages in teacher supply, content research and development, brand influence, etc., we are optimistic about the development prospect of the company to maintain the leading position of online K12. ② offline, K12 training market during the health event to accelerate clearance, the future concentration will still be enhanced, good leader. According to consensus expectations, the company's FY2021-FY2023 net profit is US $3.16max 6.41 / 1.049 billion, EPS is US $0.53pm, and PE is 125.8max 62.0max 37.9X.

Risk Tips:公共卫生事件风险、课外培训政策趋严风险、学生人数增加不达预期风险、在线教育行业竞争加剧风险、实体中心扩张不及预期风险、汇率波动风险、市场竞争加剧风险、估值中枢下移风险等。

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好未来(TAL.US)21Q2业绩点评：收入增长符合预期，业绩受销售费用拖累，将加大投入“本地网校”

TAL Education Group (TAL.US) 21Q2 performance comments: income growth is in line with expectations, performance is dragged down by sales expenses, and will increase investment in "local online schools"

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