China education Report Interpretation

Overview

This August 2026 tracker reviews China education demand through learning-tablet sales, app engagement, tutoring capacity, overseas-study visa issuance and East Buy operating data. Goldman Sachs identifies pressure on traditional and hardware-led education formats, continued strength in AI-native learning engagement, a Canada-led improvement in overseas-study visas, and contrasting company-level implications across its coverage.

Core views

Goldman Sachs' tracker indicates that AI learning-tablet demand weakened materially in August. Combined GMV for eight major learning-device brands on Douyin, Taobao, Tmall and JD fell 27% year on year and 39% month on month, reversing 5% year-on-year growth in July. The firm attributes the deterioration to a high comparison base and price increases. Brand results were uneven: Xiaodu, iFlytek, Qingbei Daoyuan and Seewo grew 19%, 17%, 17% and 12% year on year, respectively, while BBK, Zuoyebang and Yuanfudao declined 70%, 56% and 18%. TAL continued to gain share in learning tablets, but its tracked sales trends were weak. TAL sold about 79,000 units and generated roughly Rmb360mn of GMV in August. Shipment volume declined 39% year on year and 38% month on month, while GMV fell 22% year on year and 41% month on month, versus a 6% year-on-year GMV decline in July. Its average selling price rose 29% year on year but fell 6% month on month to about Rmb4,600, moderating after the T6-series launch had driven a 39% year-on-year and 19% month-on-month ASP increase in July. For TAL's 2QFY27 August quarter, tracked GMV declined 17% year on year, below Goldman Sachs' estimate of a 5% decline, because a 31% ASP increase did not offset a 37% volume decline. This contrasts with 1QFY27, when the firm's tracked volume had grown 8% year on year. Engagement data show a different pattern for AI-driven products and services. Major education-device app MAUs grew 28% year on year to about 18.6mn in August, although they declined 5% month on month. TAL's Xueersi Smart app reached about 4.3mn MAUs, up 68% year on year and down 1% month on month. Doubao Study's DAU growth remained exceptionally high at 152% year on year at August-end, making it the seventh-largest AI-native app in China by DAUs, and it continued to expand its time-spent share among major K-12 learning-tool and study-companion apps. Gauth maintained leadership among global AI-native education peers: August billings were approximately US$854k, up 20% year on year, LTM billings reached US$13.6mn, and monthly billings per average DAU rose 63% year on year to US$0.64. Traditional tutoring indicators remained subdued. The number of non-academic tutoring institutions fell 0.1% month on month and 1.7% year on year to 116.7k in August; Grade 1-9 non-academic institutions and for-profit offline non-academic tutoring licenses were flat month on month. Subject-tutoring institutions were also flat month on month at 8,957, as a 0.1% increase in high-school subject-tutoring institutions offset a 0.1% decline in Grade 1-9 not-for-profit subject-tutoring institutions. At the user level, MAUs for non-academic tutoring platforms declined 10% year on year, except TAL Xueersi, which rose 10%. Combined MAUs for not-for-profit subject-tutoring platforms fell 8% year on year and total time spent fell 10%. Xueersi.com MAUs declined 11% year on year, while TAL's Xueersi app for Peiyou course registration and attendance maintained 10% year-on-year growth; EDU's course-registration MAU declined 18% year on year. The overseas-study data suggest a stabilization rather than a broad-based recovery. Chinese student visas issued by Canada, Australia, the US and UK combined increased 1% year on year in 2026 year to date, improving from a 20% decline in 2025. The improvement was led by Canada, where visa issuance rose 36% year on year in the first half and June permits rose 159% year on year. Australia showed a narrower decline in the aggregated data and July issuance rose 1% year on year, while UK issuance declined 10% year on year in the first quarter. US issuance fell 34% year on year in January-February, a larger decline than in 2025. Goldman Sachs therefore characterizes the aggregate stabilization as country-divergent. East Buy delivered 2HFY26 revenue and IFRS net profit broadly in line with Goldman Sachs estimates, while adjusted profit exceeded expectations. GMV grew 56% year on year to Rmb6.1bn, primarily reflecting better-than-expected 3P GMV growth of 54%. Revenue rose 54% year on year to Rmb3.4bn, in line with Goldman Sachs estimates and 13% above Visible Alpha consensus. Adjusted net profit was Rmb371mn, up 112% year on year and 15% above Goldman Sachs estimates and 28% above consensus, implying a 10.9% net profit margin due to lower adjusted operating expenses. For FY26, GMV and revenue rose 17% and 30% year on year to Rmb10.2bn and Rmb5.7bn, respectively, and adjusted net income reached Rmb628mn. The company broadened its assortment to 1,009 SPUs from 732, while paid members reached 353k in May, up 113k from November 2025. August operating data for East Buy remained strong in aggregate but exposed differing momentum by platform. Douyin GMV rose 79% year on year and 9% month on month to about Rmb1,090mn, with new platforms contributing 414% year-on-year growth while the original East Buy main, Beautiful Life and private-label platforms declined 9%. The share of 1P private-label GMV increased to 30% from 25% in July. Combined Taobao, Tmall and JD GMV rose 150% year on year to about Rmb32mn, though this was only about 2.9% of Douyin GMV. East Buy app MAUs rose 32% year on year to about 2.017mn, moderating from 35% growth in July. Goldman Sachs raises FY27-28E GMV forecasts by 9-10%, revenue forecasts by 2-6%, and adjusted net-profit forecasts by 10%, and introduces FY29E estimates. It lifts the 12-month target price to HK$15.0 from HK$13.6, based on an unchanged 15x CY26E target P/E, but stays Sell because it considers valuation elevated relative to China e-commerce platforms and China food, beverage and household-product companies.

Analysis framework

Goldman Sachs tracks monthly GMV, shipment volume, ASP, app DAUs and MAUs, tutoring-license counts and country-level visa issuance to assess demand and engagement across China education. It compares year-on-year and month-on-month changes with prior periods and its own estimates, then links the operating data to company forecasts, ratings and valuation where company-specific results are available.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Learning-tablet GMV is assessed through shipment volume and average selling price.

  The report shows that TAL's higher ASP did not offset sharply lower volume, explaining why tracked GMV declined.

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Sum-of-the-parts valuation for New Oriental and TAL.

  Goldman Sachs values distinct tutoring, enrichment, content and other businesses using target EV/NOPAT multiples, adds net cash and applies a holding-company discount.

• Valuation methodsP/E and PEG Valuation

  Target P/E valuation for East Buy.

  The East Buy target price uses a 15x CY26E target P/E benchmarked against China e-commerce and consumer-product peers.

Asset mapping & comparison

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

• TAL Education Group (TAL)

  Covered China education company and learning-tablet operator.

  Strengths

  Continued learning-tablet share gains; Xueersi Smart MAUs rose 68% yoy and Peiyou MAUs rose 10% yoy.

  Weaknesses

  August tablet GMV fell 22% yoy and tracked 2QFY27 GMV declined 17% yoy, below Goldman Sachs estimates.

  Comparison

  Goldman Sachs is Buy rated on TAL, unlike its Sell ratings on East Buy and Offcn.

  Risks

  Weaker-than-expected offline capacity expansion, regulatory changes, an unsatisfactory smart-tablet launch and challenges in overseas-business exploration.

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

  Covered China education company with tutoring and overseas-study exposure.

  Strengths

  Goldman Sachs remains Buy rated and sees stabilized aggregate overseas-study visa trends.

  Weaknesses

  EDU course-registration MAUs fell 18% yoy in August, and visa trends remain weak in the US and UK.

  Comparison

  Goldman Sachs assigns a Buy rating to New Oriental while remaining Sell on East Buy and Offcn.

  Risks

  Demographic pressure on addressable market, competition-led pricing pressure, overseas-study disruption, AI disruption, weaker operating efficiency or margin improvement, and regulatory changes.

• East Buy (1797.HK)

  Covered company discussed through results, valuation and platform GMV tracking.

  Strengths

  2HFY26 adjusted profit beat estimates; Douyin GMV grew 79% yoy and new-platform GMV grew 414% yoy.

  Weaknesses

  Original-platform GMV fell 9% yoy and Goldman Sachs considers valuation elevated versus relevant peers.

  Comparison

  The target price is based on a 15x CY26E P/E benchmarked against China e-commerce and food, beverage and household-product companies.

  Risks

  Stronger GMV growth, faster new-channel ramp-up, better-than-expected private-label launches, parent-company support and improved shareholder returns.

• Offcn Education (002607.SZ)

  Covered China education company.

  Comparison

  Goldman Sachs is Sell rated on Offcn.

Key data

• Eight-brand learning-tablet GMV-27% yoy / -39% mom in Aug 2026Versus +5% yoy / -9% mom in July.
• TAL learning-tablet GMVc.Rmb360mn; -22% yoy / -41% mom in AugTAL sold approximately 79k units; 2QFY27 tracked GMV fell 17% yoy versus Goldman Sachs' 5% decline estimate.
• Doubao Study DAU+152% yoy at August-endRanked seventh among AI-native apps in China by DAUs.
• Combined Chinese student visas+1% yoy in 2026 YTDCanada, Australia, US and UK combined; compared with -20% yoy in 2025.
• East Buy 2HFY26 adjusted net profitRmb371mn, +112% yoy15% above Goldman Sachs estimates and 28% above consensus; implied 10.9% net profit margin.
• East Buy Douyin GMVc.Rmb1,090mn, +79% yoy / +9% mom in AugNew-platform GMV rose 414% yoy, while original-platform GMV declined 9%.

Impact & implications

The tracker points to softening hardware demand and continued pressure on traditional tutoring engagement, while AI-native learning apps retain strong user momentum. The overseas-study market is stabilizing at the aggregate level but remains highly dependent on Canada, and East Buy's better-than-expected earnings and forecast upgrades do not change Goldman Sachs' Sell view because of valuation.

Risks

• For New Oriental, Goldman Sachs identifies demographic pressure, competitive pricing pressure, further overseas-study disruption, AI disruption, weaker-than-expected efficiency or margin improvement, and regulatory changes.
• For TAL, stated risks include weaker-than-expected offline capacity expansion, education-sector regulatory changes, an unsatisfactory smart-learning-tablet launch and challenges in overseas-business expansion.
• For East Buy, stated risks include stronger GMV growth, a faster new-channel ramp, better-than-expected private-label launches, parent-company support and improved shareholder returns.

What to watch

• Learning-tablet GMV, volume and ASP trends, particularly whether TAL's pricing can offset weak unit demand.
• AI education-app engagement, including Doubao Study DAUs and Gauth billings.
• Tutoring-license counts and MAU trends for non-academic and subject-tutoring platforms.
• Chinese student-visa issuance by destination, especially whether Canada's rebound can offset continued US weakness.
• East Buy's new-platform versus original-platform GMV, private-label mix, app traffic and new-sales-channel ramp.