According to a research report released by Sinolink Securities Co., Ltd. (SH: 600109), the current policy environment is stable, and leading institutions have resumed offline capacity with improved operational efficiency. Over the medium to long term, the K12 segment continues to benefit from resilient demand, optimized supply structures, and product upgrades. AI is expected to further enhance teaching efficiency and expand personalized learning scenarios. Meanwhile, vocational education benefits from employment training policy support and the skills iteration demand brought by new technologies like AI, with growth potential gradually unfolding.

Positive shifts are emerging in the education sector's policy landscape, fundamentals, and AI logic, with the industry's investment narrative gradually turning toward fundamental recovery and incremental opportunities from new technologies. After a period of supply-side consolidation and business restructuring, several leading institutions have developed new business layouts encompassing non-academic education, all-age educational services, and "curriculum + content + smart hardware" models, leading to gradual operational improvements. Since 2025, industry regulation has further normalized and digitized, while supportive policies for AI education, technology-driven education, and vocational skills training have continued to roll out, providing support for medium-to-long-term development.

Reviewing the industry's trajectory, education has passed through three stages: rapid expansion, policy-driven consolidation, and business restructuring. From 2010 to 2020, K12 tutoring expanded swiftly. In 2021, the "Double Reduction" policy spurred massive supply consolidation, with offline academic tutoring institutions reduced by over 92% by February 2022 compared to pre-policy levels. From 2022 to 2024, leading institutions accelerated their pivot toward non-academic education, study tours, smart hardware, and all-age educational services. Since 2025, with regulatory normalization and the maturation of new business lines among leaders, the industry has continued to repair.

Following supply-side consolidation, leading institutions have leveraged brand strength, teaching research, faculty, and standardized operating systems to rebuild capacity. Sinolink Securities noted that New Oriental Education & Technology Group (NYSE: EDU) learning centers increased from 663 in 2023 to 1,241 in 2025, while TAL Education Group (NYSE: TAL) grew from 331 in 2024 to 526 in 2025. Latest earnings further validate fundamental improvements: New Oriental reported FY26Q4 revenue of $1.530 billion (+23.0% YoY) and net profit attributable to shareholders of $62 million (+775.8% YoY); TAL Education posted FY2027Q1 revenue of $758 million (+31.9% YoY) and net profit attributable to shareholders of $408 million (+1207.2% YoY). With revenue recovery coupled with improved gross margins, enhanced cost efficiency, and higher capacity utilization, profit growth at leading institutions is generally outpacing revenue growth, signaling the industry's transition from the restructuring phase into a period of earnings realization.

Generative AI is evolving from single-point tools like question-solving and grading into applications spanning lesson preparation, learning analytics, Q&A, and operational processes. The K12 segment, which generates high-frequency data from homework, assessments, and interactive activities, is naturally suited to form personalized learning loops. TAL Education's FY2026 learning content solutions revenue grew 48.4% year-over-year, and weekly active learning devices exceeded 2 million in FY2027Q1. New Oriental, leveraging its OMO system and offline teaching network, is embedding AI into teaching and operational workflows. Leaders with strengths in curriculum content, learning data, and teacher service capabilities hold competitive advantages.

Corporate AI applications are advancing from model invocation to intelligent agents, system deployment, and workflow transformation. Demand for AI skills is expanding from core technical roles to development, product, and business positions. According to PwC's 2026 statistics, job postings requiring AI skills grew 69%, significantly outpacing the overall hiring market's 9% growth. Lightcast data shows that U.S. job postings for agent-related skills surged over 280% year-over-year in 2025. Training demand is also upgrading from single-software skills to integrated AI and professional capabilities. Chuanzhi Education (SZ: 003032) has established a dual-brand matrix for AI development and AI applications, further expanding into embodied intelligence courses, positioning it to benefit from job skill restructuring.

Risks to watch include policy changes, enrollment shortfalls, slower-than-expected AI business implementation, and intensifying competition.