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  "documentTitle": "TAL Education Group (TAL)",
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      "text": "Shujia’s 2015 financials show revenue was too small to be consolidating the GZ 1-1 business.",
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      "text": "Shujia’s 2015 financials show revenue was too small to be consolidating the GZ 1-1 business. On the 2016 Q2 earnings call, Rong Luo advised that GZ 1-1’s quarterly revenues as of August 2015 were approximately $2.5 million.",
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      "text": "Shujia’s CY2015 revenues were less than one-third of what we would have expected, and its deferred revenue fell short by half. Its CY2016 financials displayed irregularities and did not match up with expected levels.",
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      "text": "The table below displays the calculations, currency conversion, and works out an annualized revenue run rate based on the FY16 Q2 (Aug 2015) data.",
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      "text": "Even with flat growth, in the final four months of 2015, we should see revenue of approximately Rmb 21 million. However, Shujia’s SAIC financials report only Rmb 5.75 million in 2015 or ~28% of the expected amount.",
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      "text": "During the period of the purported disposal, Changing Edu had three entities running in Guangzhou. We reviewed SAIC financials of all three Changing Edu entities (shown in Appendix G).",
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      "text": "In contrast, GZ XRS EdTech’s total revenue reported in CY2015 of Rmb 66.7 million (see Appendix F) is close to the estimate of Rmb 63.2 million ($10 million) below for GZ 1-1’s run rate.",
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      "kind": "quote",
      "text": "On the 2016 Q2 earnings call, Rong Luo advised that GZ 1-1’s quarterly revenues as of August 2015 were approximately $2.5 million. — FY2016 Q2 earnings call, CFO Rong Luo",
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      "text": "132 FY2016 Q2 earnings call, CFO Rong Luo\n133 Shujia’s credit report",
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      "text": "9. Shujia’s CY2015 / 2016 SAIC financials do not accord with GZ 1-1 business’s expected financial performance, indicating that Shujia was consolidating other Changing Edu businesses, and therefore likely not fully consolidating GZ 1-1 business.",
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