Charlotte Wei

Charlotte Wei inquired about the key reasons behind the moderation in top-line growth momentum compared to the previous quarter and the revenue growth outlook for different business lines, particularly learning devices, for the upcoming quarter.

Answer

Jackson Ding, Deputy CFO, stated that the moderation was primarily due to a deceleration in the learning device business, which is transitioning from rapid expansion to sustained growth. He also cited the timing of product launches, with major launches occurring earlier in FY26 compared to late FY25, creating a higher comparison base. The company expects continued fluctuation in learning device revenue and a moderation in group-level year-over-year growth in the second half of FY26.

Charlotte Wei with HSBC inquired about the moderation in TAL Education Group's top-line growth compared to the previous quarter, asking for the key reasons behind this trend and the revenue growth outlook for different business lines, particularly learning devices, for the upcoming quarter.

Answer

Jackson Ding, Deputy CFO, explained that the moderation was primarily due to a deceleration in the learning device business, transitioning from rapid expansion to sustained growth. He also cited the timing of product launches (major launches in Q2 this year vs. Q3 last year) creating a higher comparison base for Q3. Alex Peng, President and CFO, added that the company prioritizes long-term competitiveness and expects continued fluctuation in learning device revenue, with overall year-over-year growth moderating in the second half of FY 2026 due to a higher comparison base.

Charlotte Wei of HSBC asked about the reasons for the significant slowdown in non-academic enrollment growth this quarter. She also inquired about the specific summer enrollment growth for K-9 non-academic tutoring and how it compares to the broader industry trend.

Answer

Executive President & CFO Stephen Zhihui Yang explained that the enrollment slowdown was primarily a seasonality issue caused by an earlier Chinese New Year, which shifted enrollments into prior quarters. He expressed confidence that growth would accelerate from Q2 based on current bookings but stated that the summer enrollment window is not yet closed and declined to comment on industry-wide trends.

Charlotte Wei from HSBC asked about the reasons for the significant slowdown in non-academic enrollment growth and requested details on summer enrollment trends for the K-9 non-academic tutoring business.

Answer

Stephen Zhihui Yang, Executive President & CFO, attributed the slowdown to seasonality from an early Chinese New Year, which shifted enrollments into prior quarters. He noted that Q2 bookings already appear stronger, supporting the forecast for accelerating growth. He deferred providing specific summer enrollment data until the next earnings call as the registration period was ongoing.

Charlotte Wei from HSBC asked about management's view on how AI and large language models will reshape the education industry, and specifically requested details on New Oriental's strategy and investment plans in this area.

Answer

CFO Zhihui Yang explained that New Oriental uses AI tools like essay grading and speaking assistance to improve student outcomes and gather data. He clarified there is no plan to build a proprietary large model and that investments will be 'reasonable.' He also noted AI's potential to reduce costs and improve margins.

Charlotte Wei of HSBC requested a more detailed breakdown of the expected growth rates for New Oriental's different business segments within the second-quarter guidance.

Answer

Sisi Zhao, an executive at the company, provided the Q2 growth guidance breakdown: overseas-related business is expected to grow over 20%; the domestic test prep and university students business is projected to grow between 30-35%; the high school business is guided to grow around 20%; and the new business initiatives are expected to grow around 50%.