Why a Fund Dumped a $24 Million China Education Stock While Keeping a Big Position in TAL

Tiger Pacific Capital sold out its stake in New Oriental Education (NYSE:EDU), according to a May 15, 2026, SEC filing, with the estimated transaction value at about $24.48 million based on quarterly average pricing.

What happened

According to an SEC filing dated May 15, 2026, Tiger Pacific Capital sold all 428,532 shares of New Oriental Education (NYSE:EDU) during the first quarter. The estimated transaction value was about $24.48 million, calculated using the average closing price for the period. The fund reported no remaining position in the company at quarter-end. The net position change, which includes price movement, was $23.58 million.

What else to know

• Top holdings after the filing:
  • NYSE: TAL: $90.71 million (42.3% of AUM)
  • NYSE: CPNG: $35.97 million (16.8% of AUM)
  • NASDAQ: PDD: $27.74 million (12.9% of AUM)
  • NYSE: NOAH: $18.62 million (8.7% of AUM)
  • NASDAQ: QFIN: $12.33 million (5.7% of AUM)
• As of Friday, EDU shares were priced at $45.79, down about 3% over the past year and well underperforming the S&P 500, which is instead up about 28%.

Company overview

Company snapshot

• New Oriental Education & Technology Group offers private educational services including test preparation, after-school tutoring, language training, and online education programs, with a focus on English and other foreign languages.
• The firm generates revenue through tuition fees from in-person and online courses, educational materials, and consulting services for overseas studies.
• It targets students from K-12 to college level, as well as individuals preparing for domestic and international exams in China.

New Oriental Education is a leading provider of private educational services in China, serving a broad student base through a network of schools, learning centers, and digital platforms. The company leverages its scale and diversified offerings to address a wide range of educational needs, from language acquisition to test preparation.

What this transaction means for investors

This sale ultimately looks less like a verdict on New Oriental's business and more like a portfolio reshuffle within China's education sector. The biggest clue is what Tiger Pacific kept. Its largest position remains TAL Education, which accounts for more than 42% of assets (excluding some put options in an S&P-tracking ETF), suggesting the fund may still like the sector while preferring a different vehicle for that exposure.

That said, New Oriental's recent results hardly paint the picture of a struggling company. Third-quarter revenue climbed nearly 20% year over year to $1.42 billion, while operating income jumped 45% to $180 million and net income rose 45% to $127 million. Management highlighted growth across overseas test preparation, adult education, and newer educational initiatives, while continuing to integrate AI tools throughout its platform. The company is also returning significant capital to shareholders. It approved another $0.60 per ADS dividend and had already repurchased roughly $184 million of stock under its buyback program as of April.

Ultimately, the stock's muted share performance may not reflect the underlying business. New Oriental continues to grow revenue, expand margins, and generate substantial cash, ending the quarter with more than $5.2 billion across cash, deposits, and short-term investments. A fund exit can be worth noting, but the company's operating momentum appears intact.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.