(Bloomberg) -- It’s all adding up for Liu Yachao.
The chief operating officer of TAL Education Group, a Beijing-based provider of tutoring services for Chinese students in core academic subjects, became the company’s second billionaire as its stock more than doubled in the past year.
Chinese parents spend an average of $42,892 on their children’s education, with 93 percent of them paying for private tuition, according to a report last year from HSBC Holdings Plc. That demand has driven TAL’s market value to $21.1 billion, about 46 percent more than its main competitor, New Oriental Education & Technology Group Inc.
Liu, 36, the first math teacher to join the company, became director of the middle-school division in 2005 and later led the teaching and research division, teacher training school and network operation center before taking his current post, according to TAL’s website. He owns a 4.7 percent stake worth $1 billion. TAL’s other founder, Zhang Bangxin, has a net worth of $6.6 billion, according to the Bloomberg Billionaires Index. The company declined to comment on their fortunes.
“TAL’s earnings are primarily driven by enrollment growth,” said Connie Gu, an analyst at Bocom International who has a buy rating on the shares and a $40 price target. “We’re positive on China’s K-12 education market, given the elite selection system and Chinese people’s willingness to climb the social ladder.”
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