TAL learning devices achieve lower volume but higher pricing with premium new products, while education AI activity continues to expand

Overview

The report tracks China’s education industry in July 2026, covering AI education applications, AI learning devices, mobile user activity, tutoring licenses, overseas study, and East Buy operating data. The key highlight is that TAL achieved lower volume but higher pricing for its learning devices through the high-priced T6 xPad series, driving a recovery in GMV growth. Meanwhile, education AI applications maintained rapid expansion, while offline tutoring supply, traffic for some online education platforms, and overseas study demand continued to show structural divergence.

Core views

First, growth in TAL learning devices was mainly driven by product mix upgrades rather than volume expansion. The T6 series is priced from Rmb6.9k to Rmb12k, driving July ASP up 57% YoY and offsetting the impact of a 15% YoY decline in sales volume. Second, demand for education AI remains strong, with Doubao Study, Gauth, and Xueersi Smart all showing relatively high user or monetization growth. Third, supply in the traditional tutoring industry continues to shrink, with the number of non-academic and academic institutions declining MoM, but TAL Peiyou’s MAU still grew 11% YoY, outperforming most peers. Fourth, the YoY decline in overseas study demand has narrowed, but visa data for Australia and the United Kingdom remain weak. Fifth, East Buy’s new livestream platform drove high GMV growth, but traffic on its original channels declined and the share of self-operated products fell, so growth quality still needs to be monitored.

Analysis framework

The report uses a monthly industry tracking framework, integrating GMV, sales volume, and ASP data from major e-commerce platforms; MAU, DAU, usage time, and gross billings data for education and AI applications; the number of tutoring institution licenses; visa data for major study-abroad destinations; and East Buy’s multi-platform GMV and traffic metrics. It then combines these with valuation frameworks for covered companies to form rating and target price conclusions.

Methodology notes

• Valuation methodsSOTP

  Sum-of-the-parts valuation method

  TAL’s 12-month target price is valued by business segment: high school tutoring uses a 13x target EV/NOPAT, quality education and other businesses use 15x, and content solutions use 13x under an assumption of a normalized operating margin of 5%, with US$2.0bn net cash and a 10% holding company discount included.

• Operating trackingGMV-sales volume-ASP breakdown

  Volume-price structure analysis

  The growth drivers of learning devices are broken down using e-commerce platform GMV, estimated sales volume, and average selling price. Douyin sales volume is estimated by dividing GMV of major accounts by ASP, so the result is an approximate third-party platform measure.

• User analysisMAU/DAU activity tracking

  Mobile user engagement

  MAU, DAU, share of usage time, and gross billings per user are used to measure the user scale, engagement, and monetization efficiency of education applications.

• Industry supplyMonthly tracking of tutoring licenses

  Changes in compliant training institution supply

  Monthly changes in the number of licenses for academic and non-academic, for-profit and non-profit institutions are used to assess offline tutoring supply trends.

• Demand proxy indicatorStudent visa tracking

  Observation of overseas study demand

  The number of visas issued by major destinations to Chinese students is used as a proxy indicator for study-abroad demand. In the 2026 year-to-date measure, Canada data are through May and Australia data are through June, so statistical windows differ across countries.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• TAL Education Group（US.TAL）

  Core beneficiary, rated Buy

  Strengths

  The high-end T6 series significantly improves ASP and GMV; Xueersi Smart user activity is strong; content, AI, devices, and tutoring businesses have synergies.

  Weaknesses

  Learning device sales volume still declined YoY, Xueersi.com MAU decreased 6% YoY, and new product growth is highly dependent on high-priced products.

  Comparison

  Learning device GMV grew 34% YoY, stronger than the combined 12% growth of eight major brands; Peiyou MAU grew 11% YoY, outperforming most traditional tutoring platforms.

  Risks

  Offline capacity expansion below expectations, changes in education regulation, poor performance of new smart learning device products, and difficulties in overseas business expansion.

• New Oriental Education & Technology（EDU/9901.HK）

  Core covered education industry name, rated Buy

  Strengths

  Business covers high school tutoring, overseas study services, quality education, learning solutions, and tourism, with a strong brand and cash reserves.

  Weaknesses

  Course registration app MAU declined YoY, while overseas study demand and traditional education businesses face pressure.

  Comparison

  Compared with TAL, New Oriental’s business is more diversified, but its mobile activity performance was weaker in this period.

  Risks

  Shrinking K-12 population, price competition, disruption to overseas study demand, AI substitution of some learning scenarios, margin improvement below expectations, and regulatory changes.

• East Buy（1797.HK）

  Livestream e-commerce and education transformation-related name, rated Sell

  Strengths

  Douyin GMV grew 75% YoY in July, new platform GMV grew 353% YoY, and standalone app MAU grew 35% YoY.

  Weaknesses

  Viewership in original livestream rooms declined, the share of GMV from self-operated products fell from 29% to 24%, and cross-platform GMV scale remains small.

  Comparison

  Growth mainly came from new platforms, while GMV of the three original platforms grew only 6% YoY, showing clear divergence in channel structure.

  Risks

  Slower growth in new channels, poor performance of private-label products, declining traffic conversion, and weaker-than-expected profitability.

• Offcn Education Technology（002607.SZ）

  Covered education industry name, rated Sell

  Strengths

  Has a vocational education brand and offline network foundation.

  Weaknesses

  The report does not provide evidence of operating improvement in this period, and the Sell rating is maintained.

  Comparison

  Compared with TAL and New Oriental, this report does not show prominent catalysts for the company in AI learning devices or user activity.

  Risks

  Demand recovery below expectations, intensified competition, operating efficiency, and cash flow pressure.

Key data

• TAL learning device GMV in JulyApproximately Rmb874mn, +34% YoY and +24% MoMBased on major e-commerce platforms.
• TAL learning device sales volume in JulyApproximately 161k units, -15% YoY and -7% MoMSome Douyin sales volume is derived from GMV and ASP.
• TAL learning device ASP in JulyApproximately Rmb5.4k, +57% YoY and +34% MoMMainly driven by the high-end T6 series launched on June 30.
• GMV of eight major learning device brands+12% YoY and -3% MoMJune YoY growth was -14%, showing a clear improvement in industry growth.
• Xueersi Smart MAU in JulyApproximately 4.4mn, +66% YoY and +11% MoMReflects continued improvement in user activity for TAL smart learning devices.
• Doubao Study DAU growth+154% YoY as of end-JulyIt is China’s sixth-largest AI-native application by DAU.
• Gauth gross billings in JulyApproximately US$686k, +24% YoYGross billings over the past 12 months were approximately US$13.4mn.
• Number of non-academic training institutionsApproximately 116.8k, -0.3% MoM and -1.4% YoYOffline tutoring supply continued to shrink in July.
• Chinese student visas for Canada and AustraliaCombined -4% YoY year-to-date in 2026Improved compared with -9% in 1Q26 and -19% in 2025.
• East Buy Douyin GMV in JulyApproximately Rmb931mn, +75% YoY and +3% MoMNew platform GMV grew 353% YoY and was the main source of growth.

Impact & implications

TAL’s premium new products validate the pricing power brought by content and AI feature upgrades and improve the revenue structure of the learning device business, but sales volume still declined YoY. Going forward, it remains necessary to verify whether high ASP can be sustained and whether new products can drive a recovery in volume. High growth in education AI applications indicates continued expansion in user demand and payment potential, benefiting platforms with synergies across content, brand, devices, and offline channels. The continued decline in the number of industry licenses suggests compliant supply is still shrinking, and leading institutions may benefit from rising concentration, but demographic, regulatory, and consumption pressures limit overall industry growth. Although East Buy achieved high GMV growth, growth relies more on new channels, while weakening traffic on original platforms and a declining share of self-operated products create uncertainty around earnings quality.

Risks

• A decline in China’s K-12 population may reduce the long-term market size of the education industry.
• Intensifying competition or stronger consumer-product attributes may pressure course and hardware prices.
• Changes in education industry regulatory policies may affect business scope, supply expansion, and profit models.
• Sales of TAL’s new premium learning device products may fall short of expectations, or ASP increases may not be sustainable.
• AI may create new demand but may also substitute traditional learning and tutoring scenarios.
• A renewed weakening in overseas study visas and demand may affect overseas study training and consulting businesses.
• East Buy’s new channel growth, private-label performance, and traffic conversion may be below expectations.
• Third-party e-commerce and application data are estimates and may differ from company-disclosed data.

What to watch

• Subsequent sales volume, ASP sustainability, and return rates of the TAL T6 series.
• Whether TAL learning device GMV growth can shift from price increase-driven growth to both volume and price growth.
• MAU and paid conversion trends for Xueersi Smart, Peiyou, and Xueersi.com.
• User retention, usage time, and monetization efficiency of education AI applications such as Doubao Study and Gauth.
• Whether the number of non-academic and academic training institution licenses continues to shrink.
• Subsequent changes in visas issued by Canada, Australia, the United Kingdom, and the United States to Chinese students.
• East Buy’s new platform GMV growth, share of self-operated products, and traffic in original livestream rooms.
• Education regulatory policies, offline learning center expansion, and intensity of industry competition.