4319.jp - TAC Co., Ltd.

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4319.JP  TAC Co., Ltd.

 

Company Profile - http://www.tac-school.co.jp/tac/english/tac_profile-1.pdf 

English IR page - http://www.c-direct.ne.jp/irsd/cd/forwardLocalMenu.do?gsCode=10110256&menuId=200802167864&target=1&mode=1&header=1&localeLang=en

 

Total Shares Count : 18.23 million

Market Cap ~ ¥ 2.5 billion

Sales - FY2011 (Ending Mar 2012)= ¥ 22.5 billion

Book Value (Q1-2012 June 2012 ) ~ ¥164 / share

P/S = 0.1 

(Soure: http://www.c-direct.ne.jp/public/english/ue/pdf/10110256/20120831205941.pdf)

 

Company Sales since 1988

http://imageshack.us/a/img405/4148/tac2011.jpg

 

TAC is a Personal Education Company providing a tutoring service for professional. It has been a business since 1980 . And it focused on tutoring for accounting professional but has grown to other areas in the recent years also.

 

The company had been able to achieve a constant sales grow in the past 25 years. But result in the past 2 years was bad. Sales started to declined last year. But it suffered a net loss for 2 consecutive years .  The reason of the decline was due to a drop in student enrolled in CPA course.And it had higher cost that drive company's bottom line to loss due to acquisition of Waseda Seminar( Publication & Tutoring business in Law segment)  Managements tried to reduces cost by doing an early retry plan and shutdown branches that overlaps in same areas. 

 

The early retirement plan incurred more loss last year and expected to continue this year. But it will benefit company in the long run. 

http://cdplus.jp/default/pdf/public/japanese/uj/pdf/10110256/20120724205356.pdf  - Company expected to layoff 45 employees more (total is 825) .This will cost a loss of  ¥258 million but will save ¥300 million cost per year.

 

The liability looks high but half of it is a tuition fee advance.

 

Managements expects this year to be on negative operating loss.But net income will be positive due to one-time compensation from moving of the Shinjuku School ( ¥1750 million) . This gain was realized in Q1 but I am not sure if it is a cash gain or else. (Japanese company does not provide cash flow statement in Q report).    The tuition advance in balance sheet (liabilities) continue to decline which might imply a lower sales in the coming quarter (but sales forecast in 2013 is remain unchanged at ¥21.9 billion ).  However, this stock is still very cheap ( P/S~0.1 ) compares to another Private Tutor business in Japan.  I think Private Tutor is a capital light business meaning that after company gets rid of expensive-pay staff and expensive branches.  It should able to come back into profitability.  If Net income go back to 2008-2009 level , which is ¥400-¥650 million. This share is trading at 4-6x PER.  And it has a strong franchise in Japan , 30 years in Private tutor business.