Tarena International TEDU Stock Analysis


TEDU stock analysis

Catalysts:

  • Privatization

  • Stock down mainly because of macroeconomics in China and not because of fundamentals, recovery is to be expected

Risks:

  • Increased regulations in China, especially in the private education sector

  • Privatization likely to fail

  • Business still not profitable with high expenditures and slow growth of revenues in recent years


Financial Analysis:

  • Revenues of RMB 1.11 Billion in HY21 up from RMB 626 million in HY20

  • Operating loss of RMB 220 million in HY21 vs of RMB 664 million in HY20

  • Net loss of RMB 76.7 million in 2Q21 vs RMB 255 million in 2Q20

  • Balance Sheet

  • Total assets: RMB 1.86 Billion; total liabilities: RMB 3.18 Billion; book value: Negative RMB 1.31 Billion

  • Cash: RMB 257 million, debts: None, current assets: RMB 592 million, current liabilities: RMB 2.83 billion


Valuations:

  • My personal Biases:

  • Too much uncertainty to make a good valuation for now


Conclusion

  • Stock could recover as the Chinese markets recover but with such a balance sheet and cashflows, I would prefer to stay away from it as this would be just speculation

  • Outside my circle of competence


Full research and analysis: https://ishfaaqpeerally.teachable.com/courses/662813/lectures/35596042

TEDU stock analysis

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