Tal Education (XRS) has been growing rapidly by finding a niche in China's fast growing private education market. The company operates after-school tutoring services under the brand "Xueersi" for grades kindergarten through 12 at 275 learning centers in 10 cities.
While its competitor, New Oriental (EDU), has tapped the market for international test preparation for university education, analysts say the private tutoring market is the fastest-growing segment of China's education market. And Tal Education is said to have gained high brand cache in China.
However, it's so far had lackluster performance on the NYSE. Since its October 2010 initial public offering, Tal Education's shares are down nearly 27%. Still, some analysts expect the company to increase its stock price over the next several years as investors become less wary of potential fraud among U.S. listed Chinese companies.
While fraud among Chinese companies has largely been confined to Chinese companies that go public by merging with a listed U.S. company, it's created some worries among investors, causing Chinese companies to trade lower.
China is the world's second largest economy, but it will still take years before living conditions are on par with other developed countries.
