- On December 9, 2021, licenses were announced for online after school classes in China (Guangdong province), potentially similar to Chinese gaming stocks bottoming in Q4-2018 after licensing system was announced.
- EDU’s "regulatory complaint" revenue is legitimate, recurring, and sustainable, this alone is worth billions.
- Current policies are expected to wipe out competition, advertising and boost profit margins – similar to the tobacco industry.
- EDU’s current market cap is less than its net cash. An investor would effectively get one of the most well-known brands in China for free.
- Regulatory uncertainty is likely to ebb over time as after-school tutoring classes are a marginal factor in population growth, possibly only targeted for “shock and awe” purposes.
For further details see:
New Oriental Education: High Risk Reward Buy From Overblown Fears