Guosen Securities has released a research report noting that on January 28, TIANLI INT HLDG held its 2026 Annual General Meeting and a specialized AI reverse roadshow event, which was publicly live-streamed. During the event, the company comprehensively showcased its student enrollment figures for academic schools and its deep strategic layout, leading practices, and future blueprint in the "AI + Education" sector through various segments including the AGM, management discussions, AI product demonstrations, and visits to AI model schools. On the same day, the company announced an intent to repurchase shares. The Board resolved to utilize up to HKD 200 million to repurchase shares on the open market from the announcement date until the conclusion of the next AGM, subject to market conditions and the buyback mandate. The repurchase price per share will not exceed 5% of the average closing price for the five trading days immediately preceding each repurchase. The main views of Guosen Securities are as follows.

First, the private academic schools business: Proactive adjustment of enrollment strategy has cleared short-term negative factors. The company is strategically and actively expanding transfer student enrollment. It is estimated that after supplementing with transfer students, the total number of students served for the full 2026 fiscal year is expected to increase by approximately 14% year-on-year. According to the company's enrollment head, as of January 25, 2026, the group had enrolled 3,603 transfer students, compared to about 2,600 newly enrolled in November 2025. The broker expects the transfer student program to continue through the current fiscal year. Guosen Securities forecasts that with the supplement of transfer students, the total number of students served in FY2026 could reach 148,000, a year-on-year increase of about 14%, with high school students served expected to number 63,000, a 17% increase. This strategic adjustment comes against the backdrop of a marginal slowdown in student growth during the company's autumn 2025 enrollment season, influenced by the company's own phased strategy. At the beginning of the autumn 2025 semester, the number of students served increased by about 8% year-on-year, with high school students served increasing by 11%, indicating a deceleration in growth rate. Considering the demographic dividend for high school-aged populations is expected to last another 6-7 years, the analysis suggests this slowdown is primarily due to the company's own strategic phases rather than broader demographic trends. Specifically: 1) In recent years, the company has emphasized student quality assessment, raising admission thresholds. By September 2025, the proportion of Tier A and B students within the group had increased to 28.3%/53.4% from 14.5%/50.2% in September 2023, which has narrowed the pool of eligible students and increased enrollment difficulty. 2) Recent expansion of public high schools, sometimes implemented by purchasing places from private schools, occurred while the company's school network was still developing in some areas. This round of adjustments balances short-term results with long-term strategy, and student growth rates are expected to recover. Beyond quickly filling the temporary enrollment gap with transfer students, the company is also actively adjusting its long-term enrollment strategy: 1) Moderately relaxing admission criteria to increase the student pipeline, balancing long-term teaching quality with short-term financial metrics. 2) Improving internal promotion rates within the group's schools. By optimizing curriculum continuity from kindergarten to primary, primary to junior high, and junior to senior high, the internal promotion ratio has been increased. In campuses where promotion processes were completed for 2026, the ratio exceeded 60%, compared to about 50% in 2025. 3) Team building: Establishing dedicated enrollment teams, which has already been completed in some campuses.

Second, the AI + Education business: Teaching effectiveness is validated, accelerating revenue conversion. The company's AI Sprint Camp business is rapidly achieving commercial implementation, with revenue conversion projected at RMB 88 million for FY2026. As of January 26, 2026, the AI Sprint Camp had reached 1,934 students, compared to about 1,000 for the full 2025 academic year and only 36 on January 26, 2025. The broker forecasts full-year coverage could reach 4,000 students. Based on an average unit price of RMB 25,000 per student and accounting for potential refunds, this could translate to revenue of approximately RMB 88 million. The AI Sprint Camp is part of the company's self-developed AI + education service system. Its AI system is powered by the "Qiming Daren" educational large language model developed by a subsidiary, and is supported by moral education teachers in practice, with a clear focus on improving scores for secondary school and college entrance exams. Traditional education models are constrained by human and material resources, especially near exam periods, leading to uneven teacher attention. The TIANLI Qiming Daren AI companion provides a way for lower-performing students to access more educational resources. Unlike mere AI software, the AI Sprint Camp emphasizes the integration of software with actual teaching scenarios, targeting score improvement. Its teaching effectiveness has been consistently validated over the past two years. In the inaugural 2024 camp, 31 out of 36 students improved their scores, with an average gain of 36 points. A 2025 pilot involving nearly 1,000 students showed an average score improvement of 48 points. Furthermore, in 2025, one student from the Yiliang TIANLI School AI Sprint Camp class was admitted to Tsinghua University, and two were admitted to Peking University, marking the best results in the county's 117-year educational history. Currently,升学率 remains a key factor for parents choosing schools. If the AI Sprint Camp can help struggling students improve scores, it can directly generate product revenue and also enhance the school's average scores and overall升学率, which is significant for building reputation quickly for both self-operated and managed schools. Currently, the AI Sprint Camp business covers only 1.3% of the total students served, indicating substantial room for increased penetration. As teaching results are repeatedly validated and reputation builds, and considering the high barrier to entry within the group's school teaching environment, the broker is optimistic about the program's mid-term penetration rate increasing to 10% within group schools. Additionally, as the group provided management services to 18 schools by the end of FY2025, the AI Sprint Camp model has potential for replication externally. According to TIANLI Qiming AI's official disclosure, in January 2026, the company began collaborations with Huang Gongwang Senior High School and Guizhou Panzhou Judao Senior High School. Overall, the broker expects the AI Sprint Camp business to generate revenues of RMB 88 million, RMB 154 million, and RMB 231 million in FY2026, FY2027, and FY2028, respectively.

Third, ongoing share repurchases and chairman's continued share acquisitions bolster investor confidence. On January 28, 2026, the company announced its intent to repurchase shares. The Board resolved to utilize up to HKD 200 million to repurchase shares on the open market from the announcement date until the conclusion of the next AGM, subject to market conditions and the buyback mandate. The repurchase price per share will not exceed 5% of the average closing price for the five trading days immediately preceding each repurchase.