{
  "docId": "019dd923-622c-750b-8b96-b7a743eff32e",
  "docSlug": "50bcb497e381",
  "documentTitle": "TAL Education Group (TAL)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2018-07-25 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 3,
  "pageCount": 11,
  "prevPage": 2,
  "nextPage": 4,
  "slideType": "appendix_methodology",
  "function": "analyze_data",
  "density": "overcrowded",
  "nDataPoints": 8,
  "notes": "The slide details a system of linear equations used to back-calculate segment-level metrics from aggregate company disclosures.",
  "elementsJson": [
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b96-b7a743eff32e/3",
  "deckHref": "/decks/019dd923-622c-750b-8b96-b7a743eff32e",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b96-b7a743eff32e.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-b7a743eff32e#slide-3",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "We modeled Peiyou’s respective offline and online enrollments and ASPs through FY2018 Q4. These do not reconcile with TAL’s disclosures and management statements, depending on which of them you accept as accurate.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-0397-72dc-a885-3a2875e2beac",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.115,
        "w": 0.204,
        "x": 0.398,
        "y": 0.435
      },
      "kind": "paragraph",
      "text": "e_s · a_s = 100,344,000\ne_o · a_o = 18,356,000\ne_x · a_x = 3,671,000\ne_s + e_o + e_x = 407,970\ne_x = .13 · 407,970",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "0a9334f2-bd06-43a6-88be-2b8dbcabff12",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.055,
        "w": 0.764,
        "x": 0.118,
        "y": 0.575
      },
      "kind": "paragraph",
      "text": "However, we need as many equations as we have variables. Our fieldwork showed that one-on-one FY2018 ASPs were about 3x small-class ASPs, a ratio that we extrapolate back to FY2015. This data point allows us to solve the system of equations:",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "3d71d570-8c6c-4106-883a-5a1028394f5c",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.045,
        "w": 0.764,
        "x": 0.118,
        "y": 0.135
      },
      "kind": "paragraph",
      "text": "We modeled Peiyou's respective offline and online enrollments and ASPs through FY2018 Q4. These do not reconcile with TAL's disclosures and management statements, depending on which of them you accept as accurate.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5b743f71-7789-4750-8d40-95a0b3c8f9ce",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.075,
        "w": 0.764,
        "x": 0.118,
        "y": 0.195
      },
      "kind": "paragraph",
      "text": "To construct this model, we went back to FY2015 and built forward. In a given quarter, the company discloses total revenue and enrollments, and it usually gives revenue contribution data as well as the percentage of enrollments contributed by the online segment (Xueersi.com). From these, you can derive equations for segment revenues, total enrollment, and online enrollments.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "6b6a82b5-5198-4fe6-903c-5be0c9325b07",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.025,
        "w": 0.11,
        "x": 0.445,
        "y": 0.645
      },
      "kind": "paragraph",
      "text": "a_o = 3 · a_s",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "812e10ef-6776-4f2e-88f5-483a2a0f2120",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.135,
        "w": 0.764,
        "x": 0.118,
        "y": 0.285
      },
      "kind": "paragraph",
      "text": "For FY2015 Q2, for example, small-class revenues were about $100.344 million... Putting these all together yields:",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "dc41f678-20b0-49e6-ab8d-88456985ce52",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.225,
        "w": 0.764,
        "x": 0.118,
        "y": 0.695
      },
      "kind": "source-note",
      "text": "Footnotes 2-7 detailing data sources and fieldwork methodology.",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "056393ea-ef2c-4f55-8439-b0289c3141db",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.05,
        "x": 0.118,
        "y": 0.095
      },
      "kind": "title",
      "text": "Model",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "037a9824-783f-41f7-ba55-eb56f1a6124b",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 10,
      "from": 3,
      "beatId": "a41e9d0d-ee29-48db-a151-bab1e11a5cc9",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Appendix Methodology",
      "beatSlug": null,
      "evidence": "The document provides detailed methodology for analyzing the financial statements",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}