China Beststudy Education Group (3978.HK) - Deep Dive Research Report

Prepared 30 July 2026. All figures in RMB unless stated. Reporting currency is RMB; dividends are declared in HKD.

A note on reporting cadence and recency

China Beststudy is a Hong Kong Main Board listee with a 31 December fiscal year-end. It reports half-yearly, not quarterly, and Hong Kong issuers do not hold Western-style earnings calls with transcripts. The "concall" equivalent used throughout this report is the paired results announcement plus management discussion and analysis that accompanies each interim and annual filing, supplemented by the Chinese-language results briefings the company gives to local media and sell-side.

Working the calendar: FY2025 annual results were released 19-20 March 2026. The next scheduled disclosure is the H1 2026 interim result, covering the six months to 30 June 2026, which is due by end-August 2026 under HKEX rules and has not yet been released (no scheduled-results notice has appeared, and the interim window is not yet closed). The six most recent reporting periods, which anchor the Walk the Talk and Growth Triggers sections, are therefore:

1. H1 2023 interim (released ~Aug 2023)
2. FY2023 annual (released ~Mar 2024)
3. H1 2024 interim (released ~Sep 2024)
4. FY2024 annual (released ~20 Mar 2025)
5. H1 2025 interim (released ~22 Aug 2025)
6. FY2025 annual (released ~19 Mar 2026) - the most recent verified period

1. What the company does

China Beststudy Education Group runs after-school education businesses in China, concentrated in Guangdong province and the wider South China region, under the Zhuoyue Education (卓越教育) brand. In plain terms: parents pay Beststudy to teach their children things the public school day does not cover well or at all. Historically that meant academic cram tutoring for the two exams that decide a Chinese child's future, the Zhongkao (senior high school entrance) and the Gaokao (university entrance). Today it means something quite different, and the difference is the whole story of this company.

Beststudy was founded in 1997 in Guangzhou by Tang Junjing (唐俊京), who remains Chairman, CEO and the single largest shareholder. For its first two decades it was a conventional K-12 tutoring operator: physical learning centres where children came after school and on weekends to be drilled in Chinese, maths and English by contract teachers, priced per course-hour. That model made it one of the larger private tutoring names in South China and carried it to a Hong Kong listing.

Then in July 2021 the Chinese government issued the "Double Reduction" (双减) policy, which banned for-profit tutoring of core academic (K-9 compulsory-education) subjects, prohibited weekend and holiday academic tutoring, and forced existing academic-tutoring assets to convert to non-profit or shut. Overnight, the core of Beststudy's business became illegal to operate for profit. The company's response was blunt and fast: it transferred its curriculum-based (academic subject) training assets for a nominal RMB 1 and set about rebuilding the company around what regulators still permitted.

What it rebuilt around is "quality education" (素质教育, sùzhì jiàoyù), sometimes translated as competency, holistic or enrichment education. This is the non-academic category the state actively encourages: coding and STEAM, science experiments, "big Chinese" literacy and reading (大语文), public speaking and debate, study-method and learning-ability training, art and logic. Alongside it, Beststudy kept two academic-adjacent businesses that Double Reduction did not kill: full-time revision schools for students who failed to get into their preferred senior high or university and choose to repeat a year, and compliant high-school tutoring (senior high is outside the K-9 compulsory band the ban targeted). It has also pushed into vocational education in partnership with public vocational colleges.

The transformation worked, at least on the top line. Revenue roughly doubled in 2024 and grew another 73% in 2025, and quality education went from a rounding error to the majority of the business. What was once an academic cram-school operator fighting for survival is now a company whose largest and fastest-growing segment is legally-favoured enrichment education, wrapped increasingly in an in-house AI teaching layer.

The company's own framing, repeated across its 2024 and 2025 disclosures, is that it completed a "quality transformation" (素质化转型) - the deliberate rebuild of the business around competency education after the academic core was legislated away.

The value proposition to a Guangzhou parent is concrete: a trusted 25-year local brand, physical centres near where they live, and programmes that improve either their child's exam odds (revision schools, high-school tutoring) or their child's non-exam skills in a way the state approves of (quality education). The thing that is hard to replicate is not any single course; it is the combination of a rebuilt, compliant, majority-non-academic product line, a dense physical network in one of China's wealthiest regions, brand trust with parents that survived the industry's near-death event, and now an AI teaching platform that lets the company hold or improve margins while scaling.

2. Business segments

Beststudy reports around four to five service lines. The relative scale has shifted dramatically since 2021, and the FY2024 split (the last fully verified segment breakdown) is the clearest picture of the post-transformation shape.

2.1 Quality / Talent Education (素质教育) - the growth engine

What it does. This is non-academic enrichment for K-12 children: STEAM and science experiment courses, coding, "big Chinese" reading and writing literacy, public speaking and eloquence, study-ability and learning-method training, logic and thinking programmes. These are the categories the Double Reduction policy explicitly protects and encourages, because they sit outside the compulsory-education academic curriculum. Delivery is through Beststudy's physical learning centres in Guangdong and South China, sold as course packages to parents.

Scale. In FY2024 this segment generated RMB 713 million, roughly 64.7% of total revenue, up 411.7% year on year (Sina Finance, 20 Mar 2025). In H1 2025 it climbed further to about 79% of revenue, growing more than 500% year on year (Sina Finance, 22 Aug 2025). It is the reason group revenue doubled and then grew another 73%.

Core capability. Building a broad, genuinely non-academic curriculum that regulators accept as compliant, staffing it, and selling it to parents who three years ago were buying academic cram courses. Beststudy had the brand, the centres and the parent relationships already; the hard part was re-tooling the content and the teaching staff at speed. It did so faster than most peers.

Why it is separate. It exists because the old academic business was legislated away and this is what replaced it. It has a different regulatory status (favoured rather than banned), a different value proposition (skills and development, not exam scores), and different economics.

Competitive position. This is now the most crowded corner of Chinese education, because every surviving tutoring company pivoted into it at once. Beststudy competes with New Oriental's and TAL's non-academic lines nationally and with numerous local Guangdong operators regionally. It wins on local brand density and first-mover speed in South China; it is exposed to the fact that quality education has lower switching costs and lower "must-buy" urgency than exam tutoring did.

Group role. The growth bet and now the core. Management talks about it as the centre of gravity of the whole company.

2.2 Full-time Revision / Test Preparation (全日制复习)

What it does. Full-time, residential-style repeat-year schools for students who failed to get into their preferred senior high (after the Zhongkao) or university (after the Gaokao) and choose to spend a year re-preparing to sit the exam again. Unlike after-school tutoring, this is a full-day, full-year academic programme, and because the students are past compulsory education (senior-high repeat, Gaokao repeat), it was not killed by Double Reduction.

Scale. FY2024 revenue RMB 206 million, about 18.7% of the group, up just 0.9% year on year (Sina Finance, 20 Mar 2025). It is a stable, cash-generative but low-growth base.

Core capability. Running full-time schools is operationally different from after-school centres: boarding logistics, full-day teaching, and outcomes (admission rates) that are publicly measurable and marketed. Reputation compounds because parents choose revision schools on published admission success.

Why it is separate. Different regulatory footing (post-compulsory, permitted), different delivery model (full-time versus after-school), and different customer moment (a student's second attempt at a life-defining exam).

Competitive position. Competes with other full-time revision providers regionally. Management has flagged that policy encouraging expansion of public senior-high capacity is a mild headwind, because more public high-school places means marginally fewer students who need to repeat.

Group role. The cash cow and stability anchor - flat but reliable.

2.3 After-School / High-School Tutoring (辅导)

What it does. Compliant tutoring, primarily for senior high school students (outside the K-9 compulsory band Double Reduction targeted) and other permitted formats, aimed at building a sound knowledge system and good study habits.

Scale. FY2024 revenue RMB 181 million, about 16.4% of the group, up 25.2% (Sina Finance, 20 Mar 2025); grew roughly 18% in H1 2025 (Sina Finance, 22 Aug 2025).

Core capability. This is the closest surviving descendant of the original business - classroom academic instruction - operated within the narrower legal envelope that survived 2021.

Group role. A steady secondary contributor, growing but far behind quality education.

2.4 Vocational Education (职业教育)

What it does. Training and programmes that cultivate vocational skills "needed by the country and society," delivered in partnership with public vocational colleges. This aligns Beststudy with a second state priority (China is pushing vocational education hard to rebalance an over-academic system).

Scale. The smallest reported line, still early-stage. Management has repeatedly named it, alongside quality education, as a strategic development priority (Beijing News, Mar 2024).

Group role. A strategic option - policy-aligned, partnership-based, and a way to extend the brand into government-favoured territory without the compliance risk of academic tutoring.

2.5 Self-study programme (自习)

A self-study / supervised-study offering designed to improve students' independent learning ability. It is a smaller, supporting line rather than a major segment.

Segment summary

Source: Sina Finance / The Paper, 20 Mar 2025. In H1 2025 the quality-education share rose further to ~79% of revenue (Sina Finance, 22 Aug 2025); FY2025 group revenue was RMB 1,904m with quality education remaining the largest and fastest-growing line.

3. Products and business detail

Beststudy's "products" are course packages and school enrolments delivered through a physical network, wrapped in a proprietary technology layer.

The full-time revision schools are the most distinctive asset. A student who narrowly missed the Gaokao cut-off for their target university can enrol in a Beststudy full-time revision programme, live and study there for an academic year, and re-sit. These schools market on published admission-improvement results, and their reputation is a genuine barrier - a parent trusting a school with a full year of their child's life at a decisive moment does not choose on price.

The quality-education catalogue spans the enrichment categories China's regulators favour: science and STEAM experiment courses, programming, "big Chinese" (大语文) literacy and classical-text reading, public speaking and debate, and a proprietary study-ability / learning-power methodology. These are sold as multi-session course packages through the learning-centre network.

The technology layer is where Beststudy has invested most visibly. It has built an in-house AI adaptive-learning platform branded "Whale Precision Teaching" (鲸准教). Management describes it as delivering "thousand-person, thousand-face" (千人千面) personalised learning pathways - each student gets a curriculum adapted to their gaps - and as producing large teacher-efficiency gains, with automated grading cited at roughly 45x the throughput of manual marking (Sina Finance, 22 Aug 2025). Beststudy has attributed a meaningful share of its 2024-2025 margin and cost performance to AI integration reducing the labour intensity of teaching and assessment (TipRanks / company announcements, 2025). AI is the mechanism by which a physical, teacher-heavy business can scale enrolments without scaling headcount one-for-one.

Geography and network. The business is concentrated in Guangdong and South China (华南), centred on Guangzhou, one of China's wealthiest and most education-spending regions. This regional density is deliberate: brand trust, teacher recruitment and centre economics all compound within a tight geography, and it keeps Beststudy out of head-to-head national wars with New Oriental and TAL in their strongholds.

Headcount as a transformation gauge. Employee count is a good proxy for how violent the 2021 reset was and how far the rebuild has come. Beststudy employed roughly 7,097 people in 2020, before Double Reduction. That collapsed as the academic business was cut. By H1 2025 headcount had recovered to about 3,592 (Sina Finance, 22 Aug 2025), roughly half the pre-ban peak - the company is generating higher revenue than ever on far fewer people, which is exactly what the AI-and-quality-education pivot was supposed to achieve.

4. Customers

Who buys. The buyer is the parent; the user is the child. Beststudy's customers are middle-class Guangdong families with school-age children, from primary through senior high. For the revision schools, the customer is specifically a family whose child just missed a decisive exam cut-off and is willing to invest a full year in a second attempt.

The buying decision. In Chinese education spending the mother is typically the primary decision-maker, and the criteria differ sharply by product. For revision schools, the criterion is measurable outcomes - published admission-improvement rates - and the sales cycle is short and seasonal, clustered right after Gaokao/Zhongkao results. For quality education, the criteria are softer: brand trust, convenience of the centre, teacher quality, and whether the child enjoys it. The sales cycle is longer and more relationship-driven, and retention depends on the child wanting to continue.

Why they choose Beststudy. A 25-plus-year local brand that survived the industry's near-extinction event; physical centres close to home in a region where Beststudy is a household name; and, for revision, a reputation for admission outcomes. Trust matters enormously in Chinese education after a decade of scandals and the 2021 upheaval - parents gravitate to incumbents that are visibly still standing and visibly compliant.

Switching costs. These are moderate and asymmetric. Revision-school enrolment is a one-year commitment with high switching cost mid-year, but it is a single-year relationship that must be re-won for each cohort. Quality education has low switching costs - a family can stop enrichment classes any term with no penalty - which is the structural weakness of the growth engine relative to the old exam-tutoring model, where fear of falling behind on the Gaokao created near-compulsory demand.

Concentration. Customer concentration is negligible - this is a consumer business with tens of thousands of individual families, so there is no single-customer risk. The concentration that matters is geographic (Guangdong) and regulatory (dependence on the state's continued favour toward quality and vocational education).

Contract structure and revenue predictability. Revenue comes as prepaid course fees, which is why the balance sheet carries substantial contract liabilities (deferred revenue) - a leading indicator local analysts track closely, because rising contract liabilities signal enrolments booked but not yet recognised (Sina Finance, 11 Apr 2025). The prepaid model gives reasonable near-term visibility but, post-Double-Reduction, regulators cap how far in advance tutoring fees may be collected, limiting the deferred-revenue cushion the industry once relied on.

5. Competitive landscape

The Chinese after-school education industry is defined by a single fact: the July 2021 Double Reduction policy detonated the academic-tutoring market, wiping out the majority of the sector's revenue base and forcing every survivor to pivot into the same few permitted categories at the same time. The competition today is therefore a scramble among survivors for the non-academic, revision and vocational niches that remain legal.

National giants. New Oriental and TAL Education are the two dominant nationwide players. Both survived by pivoting - New Oriental famously into livestream commerce and non-academic tutoring, TAL into "learning devices," content and enrichment. Their non-academic lines compete with Beststudy's quality-education segment, but their centre of gravity is national and, in New Oriental's case, increasingly non-education. Beststudy's defence is regional density: it is far larger than either inside its Guangdong home turf.

Regional peers. The most directly comparable listed competitor is Scholar Education Group, another Guangdong-focused after-school operator, which makes it the cleanest read-across for Beststudy's regional dynamics.

Vocational and enrichment specialists. Offcn Education (vocational/civil-service training), Gaotu Techedu, and a long tail of private enrichment and coding start-ups (Yuanfudao and others) compete around the edges of the quality-education and vocational lines.

Market caps are peer-size references only, as of the dates shown, and move constantly.

Barriers to entry. They are real but not impregnable. The genuine barriers are regulatory (operating a compliant business in a sector where the state can and did change the rules overnight - incumbents that navigated 2021 have proven they can survive policy), brand trust (parents will not hand a full year of revision to an unknown school), and physical network density in a chosen region. What is not a barrier is the quality-education content itself, which is relatively easy to replicate - which is why that segment, despite its growth, is structurally more competitive and lower-moat than the old exam-tutoring franchise.

Structural shift. The whole industry is still consolidating and re-forming after 2021. The surviving players are larger and cleaner than the fragmented pre-ban field, and the competitive question for the next few years is whether quality education can be a durable, differentiated business or whether it commoditises into a low-margin scramble. Beststudy's answer is AI-enabled differentiation and regional density; the jury is out.

Beststudy is strong in its Guangdong home region, in revision-school reputation, and in the speed and completeness of its transformation. It is exposed on the low switching costs of quality education, its geographic concentration in a single province, and its total dependence on the state's continued policy favour.

6. Industry

Demand drivers. Chinese household spending on children's education is driven by a combination of intense academic competition (the Gaokao remains the single most consequential event in a young person's life), rising middle-class incomes concentrating on a smaller number of children, and cultural weight placed on educational attainment. Post-2021, that demand did not disappear - it was redirected from banned academic tutoring into permitted quality education, revision, and vocational channels. The underlying willingness to pay is intact; only the legal outlets changed.

Market size and growth. The China after-school tutoring market is projected to grow by roughly USD 130.8 billion over 2025-2029, at about an 18.3% CAGR, with outcome-based (quality) education and AI cited as the primary growth drivers (Technavio, 2025). This is a very large and, post-reset, fast-growing addressable market - the growth reflects both underlying demand and the low post-ban base.

Position in the value chain. Beststudy is a front-line service provider - it sits at the point of delivery to families, not in content licensing or edtech infrastructure. Its move up the technology stack (the Whale Precision Teaching AI platform) is an attempt to capture more of the value chain internally rather than buy teaching tools from third parties.

Regulatory environment. This is the defining feature of the industry and cannot be overstated. The Double Reduction policy (24 July 2021) banned for-profit K-9 academic tutoring, restricted timing and pricing, and forced asset conversions. Everything about how Beststudy operates today is shaped by staying inside the permitted categories: quality education (favoured), post-compulsory revision (permitted), senior-high tutoring (permitted), vocational (favoured). The state's continued encouragement of quality and vocational education is a tailwind; the ever-present possibility of further rule changes is the sector's central risk. There is no import dynamic - this is a purely domestic services industry.

Cyclicality. Education spending in China has historically been counter-cyclical to defensive - families protect children's education budgets even in downturns - which is why the stock sits in the Consumer Defensive classification. But the sector's real "cycle" is not economic, it is regulatory: the industry's fortunes swing on policy far more than on GDP.

Tailwinds: state promotion of quality and vocational education; redirected but intact household demand; AI reducing delivery cost. Headwinds: low-moat commoditisation risk in quality education; policy expanding public senior-high capacity (mild drag on revision schools); demographic decline in China's school-age population over the long run; and standing regulatory overhang.

7. Growth triggers

Drawn from management commentary across the six reporting periods. Beststudy does not hold transcript-producing earnings calls, so these are sourced from the results-announcement MD&A and the Chinese-language results briefings tied to each period.

• Continued expansion of the quality-education footprint. Management has repeatedly named quality education as the core growth engine and pointed to ongoing "territory expansion" of the segment (Sina Finance, 11 Apr 2025). Repeated across FY2024 (Mar 2025) and H1 2025 (Aug 2025).

• AI platform ("Whale Precision Teaching") scaling teacher efficiency and margins. Management cited ~45x automated-grading efficiency and "thousand-person, thousand-face" personalisation as an active driver of cost efficiency and enrolment scaling (H1 2025 briefing, 22 Aug 2025).

  Management framed the 2024-2025 revenue and profit surge as the joint product of the completed "quality transformation" and AI-technology integration into its teaching and grading (FY2024 results, ~20 Mar 2025; FY2025 results, ~19 Mar 2026).

• Vocational education build-out with public colleges. Named as a strategic development priority alongside quality education, using partnerships with public vocational colleges (Beijing News, Mar 2024; reiterated FY2024). Repeated across multiple periods.

• Rising contract liabilities (deferred revenue) supporting forward revenue. Local coverage highlighted growing contract liabilities as management's cited support for continued revenue growth (Sina Finance, 11 Apr 2025, "contract liabilities support revenue growth").

• High-school tutoring growth within the compliant envelope. The tutoring line grew ~25% in FY2024 and ~18% in H1 2025, and management continues to position senior-high tutoring as a permitted, growing channel (Sina Finance, 22 Aug 2025).

• Sustained "high dividend + high growth" positioning. Management has explicitly marketed the combination of rising payouts and rapid growth as its equity narrative (Sina Finance, 22 Aug 2025, "high dividend + high growth reshaping industry value").

8. Key risks

Regulatory reversal or further tightening (high impact, ever-present). This is the risk that overwhelms all others. Beststudy exists in its current form only because the state permits quality, revision, and vocational education. The 2021 Double Reduction policy already demonstrated that Beijing can and will restructure this entire industry with a single directive, and that it forced Beststudy to hand over its academic-tutoring assets for RMB 1. Any move to reclassify parts of "quality education" as disguised academic tutoring (a live regulatory concern across the sector), or to cap pricing and prepayment further, would hit the growth engine directly. The company's whole strategy is a bet on staying inside the permitted lines.

Low-moat commoditisation of quality education (high probability, moderate drag). Quality education has low switching costs and low content barriers, and every surviving competitor pivoted into it simultaneously. The old exam-tutoring franchise had near-compulsory demand (fear of the Gaokao); enrichment classes are discretionary and easy to drop. If the segment commoditises, the explosive growth rates of 2024-2025 normalise and margins compress even as revenue holds.

Geographic concentration in Guangdong (moderate). The business is dense in one province. That density is an advantage competitively but a single-region exposure to local regulatory interpretation, local demographic trends, and local competitive intensity. A misstep or a tougher stance by Guangdong education authorities would hit disproportionately.

Reliance on very high growth rates that must decelerate (mechanical). FY2024 revenue grew 125% and FY2025 grew 73% off a Double-Reduction-crushed base. Those rates are arithmetically unsustainable; as the base normalises, headline growth will slow sharply even if the business is healthy, which risks disappointing a market that has extrapolated the transformation surge.

Full-time revision headwind from public-school capacity expansion (low-moderate). Management itself has flagged that policy expanding public senior-high places reduces the pool of students who need to repeat a year, capping the revision segment (H1 2025 commentary, Aug 2025). Revision is the stable cash base, so pressure there matters for group quality even if it is not the growth story.

Long-run demographic decline (slow, structural). China's school-age cohort is shrinking. Over a long horizon this shrinks the total addressable pool for every K-12 education provider, Beststudy included.

Governance / no controlling shareholder (moderate, subtle). The acting-in-concert agreement among the three founding-era shareholders (Tang Junjing, Tang Junying, Gui Zhou) was terminated on 9 November 2023, so the company now has no controlling shareholder. Combined founder-side ownership remains high (~62% across the top three), but the formal loss of a control bloc can matter for decision-making cohesion and takeover dynamics.

9. Walk the talk

The six reporting periods used for this assessment: H1 2023 (Aug 2023), FY2023 (Mar 2024), H1 2024 (Sep 2024), FY2024 (Mar 2025), H1 2025 (Aug 2025), FY2025 (Mar 2026). The most recent, FY2025, was released ~19 March 2026; the next report (H1 2026) is not yet due.

The through-line of management's messaging across these periods has been remarkably consistent and, unusually for an education company in this era, largely delivered. From FY2023 onward, management committed to a single strategic idea: rebuild the company around quality education as the growth engine while developing vocational education as a second leg, and use AI to hold or improve the economics of a labour-heavy business.

Starting from FY2023 (the RMB 489m revenue year, the low point of the reset), management guided that the quality-education transformation would become the core revenue driver and that it would "accelerate the development of quality education and vocational education" (Beijing News, Mar 2024). That was a promise made from a position of weakness, one year out of near-death.

By FY2024 the promise had been kept emphatically. Quality education went from a minor line to RMB 713 million and 64.7% of revenue, up 411.7%, and group revenue more than doubled to RMB 1,102 million (Sina Finance, 20 Mar 2025). Management's stated cause - "the quality transformation achieved outstanding results" plus AI integration - matched the reported segment mix. This is the single clearest kept promise: the strategy articulated at the bottom was executed at scale within a year.

The 2024 framing, that revenue and net profit both doubled because quality education grew four-fold and AI drove cost efficiency, was not marketing gloss - the segment numbers substantiate it.

H1 2025 extended the pattern rather than breaking it. Quality education pushed to ~79% of revenue, group revenue grew ~189% to RMB 917 million, net profit rose ~177% to RMB 151 million (a record interim), and management simultaneously delivered on a second promise it had begun making - returning capital - by declaring a HKD 0.118 interim dividend on top of a growing final. The "high dividend + high growth" narrative was backed by actual rising payouts, not just words (Sina Finance, 22 Aug 2025).

FY2025 closed the loop: full-year revenue RMB 1,904 million (+72.8%), net profit RMB 302 million (+57.3%), with quality education still the largest and fastest line, and a final dividend of HKD 0.117 declared on top of the interim (results, ~19 Mar 2026).

Net assessment: this is management that does roughly what it says. The central strategic promise - transform into a quality-education-led, AI-enabled, dividend-paying company - was made from a position of crisis and has been delivered across three consecutive years of reporting, with the segment mix, the growth rates and the rising payouts all corroborating the narrative. The reservation is not credibility but sustainability: the promises kept were about executing a turnaround off a crushed base, and the harder, untested promise is whether the growth and the margins hold as the base normalises and quality education gets more competitive.

10. Shareholder friendliness index

Dividends. Beststudy has moved from a token payout to an aggressively growing one over three years. Final dividends (declared in HKD) ran HKD 0.035 for FY2023 (ex-date May 2024), rising to HKD 0.123 for FY2024 (ex-date May 2025), and for FY2025 the company paid a HKD 0.118 interim (ex-date Sep 2025) plus a HKD 0.117 final (ex-date May 2026), totalling HKD 0.235 for FY2025 (stockanalysis.com dividend history; TradingView, Mar 2026). That is a roughly seven-fold increase in the annual payout over two years, and the initiation of an interim dividend in FY2025 signals a deliberate shift to semi-annual returns. Management has explicitly marketed a "high dividend" policy as part of its equity story, and the payout has tracked earnings growth rather than lagging it. This is a genuinely shareholder-friendly dividend trajectory.

Buybacks and dilution. The company has not conducted meaningful open-market share buybacks - its April 2026 AGM circular confirmed no shares were repurchased on the exchange in the six months preceding the latest practicable date, and it was seeking a fresh buyback mandate for potential future use rather than reporting executed repurchases. Note the only recent verified window here is the last several months; a full multi-year buyback history was not evidenced, but the AGM disclosure and the absence of any repurchase announcements across the period point to no active programme. The one share-purchase activity on record is the restricted-share-unit (RSU) plan trustee buying 61,000 shares in the open market on 3 April 2025 to fund employee awards - a dilution-offset mechanism, not a capital-return buyback. Share count has been broadly stable with modest option/RSU-related issuance; there is no evidence of aggressive dilution.

Verdict: Returns Capital - a rapidly rising, now semi-annual dividend backed by earnings growth is the clearest signal, even though the company relies on dividends rather than buybacks to return cash.

11. Insider activities

Hong Kong insider data comes from HKEX Disclosure of Interests (DI) filings and the company's own share-scheme announcements. The picture over the last 12 months is one of modest but net-positive insider/large-shareholder buying, with no material insider selling on record.

Reading the buys. The Soarise Bulex open-market purchase in May 2026 is the most meaningful transaction: a substantial shareholder adding to an already large 13%+ position with cash on the open market is a conviction signal, and it lifted the holder above the 13% threshold. It is not a founder/director purchase, so it reads as external substantial-shareholder accumulation rather than a boardroom vote of confidence, but the direction is unambiguously positive. The RSU trustee purchase is a routine employee-scheme mechanic (buying in the market rather than issuing new shares to fund awards), which is mildly shareholder-friendly because it offsets dilution.

Sells. No material insider or substantial-shareholder open-market sells surfaced in the last 12 months. The founder bloc's ownership has been stable - Tang Junjing holds ~172.7m shares (~23.3%), with Tang Junying and Gui Zhou at ~19% each - and there is no filing indicating founder disposals.

Net assessment. Insiders and substantial shareholders are net buyers, and there is no offsetting insider selling, which is a clean read. The activity is concentrated (one substantial shareholder plus the employee-scheme trustee) rather than broad-based cluster buying by multiple directors, so it falls short of the strongest possible signal. Overall read: mildly bullish - meaningful external accumulation and zero insider selling, but no large founder or director open-market purchase that would elevate it to a very-bullish cluster signal.

12. Scenarios

Bull case. The quality-education pivot proves durable rather than a one-off surge. Beststudy's regional density in Guangdong lets it defend pricing while national players stay focused elsewhere, and the Whale Precision Teaching AI platform genuinely bends the cost curve - enrolments keep rising while headcount does not, so margins stabilise and then expand. Vocational education matures into a real second leg on the back of public-college partnerships, giving the company a second state-favoured growth channel and reducing reliance on discretionary enrichment demand. The state continues to promote quality and vocational education, and Beststudy is seen as the compliant, trusted incumbent parents choose. The rising semi-annual dividend, backed by growing free cash flow, re-rates the company from "distressed tutoring survivor" to "compliant, cash-generative, AI-enabled education compounder." Substantial shareholders keep accumulating. Two to three years out, Beststudy is a structurally larger, more profitable, more diversified business than the pre-2021 academic operator ever was.

Base case. Management delivers roughly what it has guided. Quality education remains the largest segment and keeps growing, but the eye-watering triple-digit growth rates of 2024-2025 decelerate hard as the Double-Reduction base normalises and competition intensifies - solid double-digit growth replaces explosive growth. Full-time revision stays flat-to-mildly-pressured by public-school capacity expansion; high-school tutoring grows steadily; vocational education develops slowly. Margins drift modestly lower as the mix shifts toward more competitive quality education, so profit grows a little slower than revenue, exactly the pattern already visible in FY2025. The dividend keeps rising in line with earnings. Beststudy remains a regionally strong, well-run, dividend-paying education company whose main constraint is that its best growth is behind the recovery, not ahead of it. Nothing breaks; nothing dramatically re-rates.

Bear case. The regulator moves again. Beijing or Guangdong authorities decide that swathes of "quality education" are disguised academic tutoring and tighten the definition, or cap pricing and prepayment further - and Beststudy's growth engine stalls the way its academic core did in 2021. Even absent a policy shock, quality education commoditises: with every survivor crowded into the same low-switching-cost, low-content-barrier niche, price competition compresses margins while discretionary enrichment demand softens in a weaker consumer economy. Full-time revision keeps shrinking as public high schools expand. The geographic concentration that was an advantage becomes a trap when Guangdong-specific competition or regulation bites. Growth rates that the market extrapolated from the recovery surge collapse toward zero, the "high growth" half of the equity story evaporates, and the company is left as a flat, single-region education operator paying a dividend it may struggle to keep growing. The 2021 experience is the proof that this bear case is not hypothetical - it has happened to this exact company before.