Guosen: TIANLI INT HLDG(01773) accelerates the transformation of AI education revenue.

Guosen released a research report stating that on January 28th, TIANLI INT HLDG (01773) held the 2026 annual shareholders meeting and AI themed reverse roadshow event, which was live streamed online. During the event, the company publicly showcased the enrollment situation of the group's schools, as well as the in-depth layout, leading practices, and future blueprint of the "AI + Education" field through various segments such as shareholder meetings, management exchanges, AI product experiences, and visits to AI demonstration schools. On the same day, the company also issued a repurchase intention announcement. The board of directors decided to utilize up to 200 million Hong Kong dollars to repurchase shares on the open market during the period from the announcement date until the end of the next annual shareholders meeting (or if shareholders revoke/change the repurchase authorization), based on market conditions and the repurchase authorization, with the buyback price not exceeding 5% of the average closing price of the five trading days prior to each repurchase. Guosen's main points are as follows: 1. Private school business: Proactively adjusting enrollment strategy, short-term enrollment pressures to be resolved The company strategically expanded outreach to transfer students, expecting a 14% increase in the total number of students served in the 26th fiscal year after the transfer students are added. According to the person in charge of enrollment, as of January 25, 2026, the group had admitted 3,603 transfer students, compared to about 2,600 new admissions in November 2025. The company is expected to continue promoting the transfer student plan within this fiscal year. With the addition of transfer students, the company is expected to serve approximately 148,000 students in the 2026 fiscal year, a 14% increase over the previous year, with the number of high school students served expected to reach 63,000, a 17% increase. The background of this strategic adjustment is that during the 2025 autumn enrollment season, the growth in the number of enrolled students slowed down due to the company's own strategic impact. At the beginning of the 2025 autumn semester, the number of students served increased by about 8% year-on-year, and the number of high school students served increased by 11%, with a marginal slowdown in growth. Considering that there is still about 6-7 years of the high school age population dividend period, the analysis indicates that this is mainly due to the company's own strategic impact, rather than the macro trend of the population. Specifically: 1) In recent years, the company has emphasized the assessment of student quality and raised admission standards. As of September 2025, the percentage of A and B level students within the group has increased from 14.5%/50.2% in September 2023 to 28.3%/53.4%, narrowing the range of student sources and increasing the difficulty of enrollment to some extent; 2) In recent years, public ordinary high schools have expanded enrollment, with some places implementing the purchase of private school slots. However, the company's school layout was relatively late compared to this trend. This round of adjustment by the company takes into account short-term effectiveness and long-term strategies, with the aim to restore the growth in the number of enrolled students. In addition to quickly filling the temporary enrollment gap with transfer students in the short term, the company is also actively adjusting its long-term enrollment strategy: 1) Moderately relax admission standards, increase student reserves, and balance long-term teaching quality with short-term financial indicators; 2) Promote internal school direct advancement within the group. By optimizing the content of classes from kindergarten to high school, the proportion of students advancing directly within the group has been increased. Among the schools where direct advancement was completed in 2026, the proportion of direct advancement has exceeded 60%, compared to around 50% in 2025. 3) Team building: Establish a team for recruiting and admissions conversion, with some school districts having already completed this process. 2. AI + Education business: Verification of teaching effectiveness, AI education accelerating revenue conversion The company's AI acceleration camp business is rapidly commercializing, with an estimated revenue conversion of 88 million yuan in the 2026 fiscal year. As of January 26, 2026, the AI acceleration camp has covered 1,934 students (1,468 from the Tianti Group schools and 466 from external sources), compared to about 1,000 students covered in the entire 2025 academic year, with only 36 covered on January 26, 2025. The company's calculations and estimates suggest that the company is expected to cover 4,000 students in the entire year, with an average customer price of 25,000 yuan, and considering possible refund situations, revenue conversion is expected to reach 88 million yuan. The AI acceleration camp is an AI + education service system developed by the company. Its AI system, the "Qiming Talent" education domain model, was independently developed by a subsidiary of the company and is equipped with moral education teachers during the actual operation process, with the ultimate goal of improving scores in the middle and high school entrance exams. Traditional education models are limited by human and material resources, especially during the exam period, where teachers may allocate their efforts differently among students. The Tianti Qiming Talent AI companion provides a way for students who are relatively behind in results to access more educational resources. Different from AI software, the AI acceleration camp focuses on the combination of software and actual teaching scenarios, with the goal of improving scores. The teaching effectiveness of the AI acceleration camp has been continuously verified over the past two years. In the first session of the Tianti Qiming Talent AI acceleration camp in 2024, 31 out of 36 students achieved score improvements, with an average improvement of 36 points; while the latest trial of nearly 1,000 students in 2025 showed an average improvement of 48 points. In addition, in 2025, a student from Yiliang Tianti School's AI acceleration camp was admitted to Tsinghua University, and two students were admitted to Peking University, achieving the best performance in the school's history of 117 years. The teaching effectiveness of the AI acceleration camp has been continuously verified over the past two years. Currently, the rate of students progressing to higher education is still an important factor for parents when choosing a school, and if the AI acceleration camp can help students who are temporarily lagging behind to improve their scores, it can not only generate revenue as a product, but also expected to effectively improve the average scores and overall progression rate of the school, which is of great significance for the rapid establishment of the company's self-operated schools and contracted schools. Currently, the company's AI acceleration camp business only covers 1.3% of its serviced student population, with great potential for future coverage expansion. As the AI acceleration camp's teaching effectiveness has been repeatedly verified and its reputation established, and considering the high entry barriers of the company's group school teaching scenes, Guosen expects the coverage of the acceleration camp project within group schools to increase to 10% in the mid-term; and considering that by the end of the 2025 fiscal year, the group has provided management services to 18 schools, the AI acceleration camp project is also expected to be replicated outside the schools. According to Tianti Qiming AI official disclosure, in January 2026, the company has already cooperated with two schools, Huang Gongwang High School under Hangzhou Gongwang Cultural and Art Group, and Judao High School in Panzhou City, Guizhou Province. Overall, Guosen expects the company's AI acceleration camp business to achieve revenues of 88 million yuan, 154 million yuan, and 231 million yuan in the 2026-2028 fiscal years. 3. Continued repurchases by the company and the continued increase in shareholding by the Chairman strengthen investor confidence On January 28, 2026, the company issued a repurchase intention announcement. The board of directors decided to utilize up to 200 million Hong Kong dollars to repurchase shares on the open market during the period from the announcement date until the end of the next annual shareholders meeting (or if shareholders revoke/change the repurchase authorization), based on market conditions and the repurchase authorization, with the buyback price not exceeding 5% of the average closing price of the five trading days prior to each repurchase.