TAL’s initials stand for Tomorrow Advancing Life, a none-too-subtle nod to one of the biggest anxieties of middle-class families in the test-based world of Chinese education. Combining in-person coaching and online instruction that lets teachers lecture across the country to multiple classrooms equipped with large video monitors, TAL expects this year to tutor 1.9 million students—double the enrollment of the New York City public school system.
The company operates 600 sites, and its online and in-person enrollment has been rising at a 49 percent annual clip. It had revenue of $1.72 billion in its fiscal year ended February 2018. By June 12, TAL’s stock had soared 27-fold since its October 2010 initial public offering, giving it a market value of $25 billion. That was more than three times that of London-based Pearson Plc, the world’s largest education services company. Its fortunes shifted on June 13, when Muddy Waters Research co-founder Carson Block, whose firm in the past has wagered against the value of several Chinese companies, said TAL’s profits weren’t as strong as reported. TAL called the allegations erroneous and deceptive.
No one had profited from the stock’s rise more than Zhang Bangxin, TAL’s co-founder, a 37-year-old former math tutor who’s become one of China’s richest people: His TAL shares are worth about $7 billion. Zhang’s parents ran a noodle and dumpling-wrapping shop in rural Jiangsu province. He was a stellar student, enrolling in a life-sciences doctoral program at prestigious Peking University. He started tutoring to ease his parents’ financial burden, then dropped out to build a tutoring business. Zhang now presides over his testing empire from an office tower in Beijing’s Zhongguancun district, home to tech startups.
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