Education technology giants are gaining momentum.
In late October, TAL Education disclosed that its net revenue from June to August was approximately RMB 4.4 billion, a year-on-year increase of over 50%, with a net profit of approximately RMB 400 million.
According to the current growth rate, its latest fiscal year revenue is expected to reach 15 billion yuan; As of the close on the 24th, its market value is approximately 45 billion yuan.
In the post double reduction era, founder Zhang Bangxin no longer appears in public and leads the company's transformation in a low-key manner, focusing on areas such as quality education and intelligent hardware.
This company, which is exploring new business opportunities, is starting to recover.
Add hardware promotion
AI learning devices are one of the main drivers of revenue growth this quarter, "said Peng Zhuangzhuang, President and CFO of TAL Education.
At the performance briefing, the company's senior management extensively elaborated on the development status of this emerging business, particularly mentioning the new Xuelian machine, stating that it is "gradually gaining market recognition".
TAL entered the hardware market relatively late and invested the most energy in the learning machine track. The first generation product was only launched in February last year.
For the entire group, the learning machine project occupies a high ecological position, and it is directly named after the "Xueersi" brand, which has never been given such treatment to innovative projects before.
It is said that Zhang Bangxin once rejected the proposal, and it took the team two months to convince him to agree.
The exploration of this category is like riding on a rocket, rapidly increasing in volume and maintaining a very high iteration frequency.
In May, the "Xueersi Learning Machine Classic Edition 2024" was launched, and thus the product line has developed into two series and four models.
At the end of August, the new product learning and training machine was launched.
Its main feature is "one top three", which means that one machine has three modes: learning machine, learning machine, and reading machine. The recommended retail price is 4399 yuan.
The management stated that the company tracked the sales locations of the devices and found that some of them were sold to areas where offline branches had never been established, covering the content and learning experience to a wider audience, which excited the team.
The new product category is still in the cultivation period, and TAL Education is not reluctant to invest money.
It has been revealed that it has placed learning devices as a strategic priority. To promote the learning and training machine, actor Shen Teng was invited to endorse it, and elevator advertisements were widely spread out.
However, the content business mainly focused on learning machines has not yet fully started, and is in a loss making stage due to cost factors such as research and development, sales expenses, and components.
At present, the learning service sector, including quality education and Xueersi Online School, remains the largest source of income for TAL Education.
Intensify technology
The promising future under Zhang Bangxin's leadership is increasingly resembling that of a large corporation.
He moved away from Huangzhuang in Haidian, where he had been stationed for many years, and bid farewell to his "old neighbor" New Oriental, who was only 300 meters away. He relocated the company headquarters to Changping, Beijing.
In June, the headquarters building of TAL Education in Changping was officially put into use, with 9 floors above ground and 3 floors underground. The iconic biomimetic "steel giant tree" has a strong sense of technology and is surrounded by multiple branches, echoing its business direction.
The former education and training giant's current positioning is based on its content capabilities, aiming to evolve into a technology company.
Over the past year, TAL Education has been making frequent efforts to develop large models.
Its self-developed nine chapter model, MathGPT, with problem-solving and presentation algorithms as its core, is one of the first domestically registered education models.
In terms of science, it can provide functions such as problem-solving, problem solving, and whole paper grading; In the humanities, it can provide functions such as Chinese and English essay writing assistance, essay grading, and oral dialogue practice.
According to management disclosure, regarding the big model, it focuses on two dimensions: one is to use rich industry data to train vertical models; The second is to use basic and vertical models to develop powerful applications.
It has started trying to make applications.
In the middle of the year, TAL Education launched the mathematics search and answer tool "Nine Chapters, Ask anytime", which is free and open for use.
This product breaks the mode of "search tools can only provide answers", not directly providing answers, but presenting the problem-solving process, cultivating problem-solving thinking through intelligent answering and inspiring guidance.
Officially, its investment in AI will be more focused on the application layer, and new applications will be launched in the future.
Zhang Bangxin once envisioned the future and aspired to 'grow into a data-driven technology company'.
Looking back, the industry's vibrations have accelerated its pace of transformation.
Supply and demand change
Zhang Bangxin and the ballast stone of the future are undoubtedly learning services.
For learning services, we will carefully manage the teaching point network, balance operational efficiency and growth rate, "said Peng Zhuangzhuang. In this fiscal quarter, the learning service business has steadily developed.
Among them, Xueersi's offline small class literacy courses have seen an increase in student enrollment and expanded operational capabilities, maintaining a growth trend this quarter.
This course adopts a face-to-face small class system, with no more than 20 children per class, providing programming, scientific experiments, humanities and aesthetic education, etc., which is relatively diversified.
It should be pointed out that after the significant compression of subject based training supply, many institutions have turned to non subject K9, and related approvals and operations have gradually become normalized.
According to statistics, the supply of literacy training that can improve learning ability and efficiency is limited, estimated to account for about 5%. As of July 2024, the number of relevant institutions is estimated to be around 4600, far less than the number of K9 subject training institutions before 2021 (about 124000).
This scarcity may drive good future performance and continue to climb upwards.
The demand for student-centered and enriched learning content is increasing
At the latest conference call, the management commented that in the past few years, online education placed a high emphasis on customer acquisition, which was unsustainable. Now, users are undergoing changes.
As a supplier, it takes advantage of the situation and not only provides large classes, but also offers various types of products.
It is revealed that the development of TAL Education's offline learning services is driven by two main factors: service quality and the ability to recruit and train teachers.
As long as these driving factors remain, we expect this business to continue to grow, "said the management.
After the storm, the big ship of TAL is stepping into a brand new river.