In addition to reporting fraudulent profits, TAL has been misleading investors about the health of its core Peiyou business. TAL’s core Peiyou business appears to be in decline. We believe that Peiyou offline Q3 revenue YoY growth was likely negative, despite TAL CFO Rong Luo stating the growth rate was “healthy” and implying it was in line with small class revenue growth of 52.4%. We also suspect that Peiyou online is not doing well. Peiyou online Q4 sequential growth seems to have been at best high single digit, and quite possibly negative.
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