Core Insights - New Oriental's 1QFY26 revenue reached $1.523 billion, a year-on-year increase of 6.1%, with education business revenue (including cultural tourism) at $1.366 billion, up 8.5% year-on-year [1] - Non-GAAP operating profit was $336 million, reflecting an 11.3% year-on-year growth, with a Non-GAAP operating profit margin of 22%, expanding by 1.1 percentage points year-on-year [1] - The company announced a shareholder return plan, distributing $190 million in cash dividends and repurchasing up to $300 million in stock [1] Education Business Recovery - The revenue from overseas examination training and consulting reached $328 million, growing by 1% year-on-year, but the growth rate slowed by 19 percentage points compared to the same period last year [2] - The company is adjusting its 1-on-1 training model to a 1-to-many format to lower class prices and is expanding its youth overseas examination training services to enhance growth resilience [2] - New business segments, including K9 non-academic training and learning machines, maintained high growth, with revenue increasing by 15% to $403 million [2] Operating Profit Margin Improvement - Despite a slowdown in high-margin overseas study business growth, the increase in the profit margin of quality education business offset this decline [3] - The company implemented measures such as workforce reduction and cost control, with sales expenses at $200 million, up 3.6% year-on-year, and administrative expenses at $370 million, up 2.4% year-on-year, both growing slower than revenue [3] - The Non-GAAP operating profit margin expanded by 1 percentage point to 22%, continuing the trend from 4QFY25 [3] Rating and Future Guidance - The company projects a 2QFY26 revenue growth of 9-12% year-on-year, exceeding the full-year guidance of 5-10% growth [4] - The education business growth is expected to recover, driven by excellent teaching reputation, with a forecasted increase in renewal rates for regular classes [4] - Revenue forecasts for FY26-FY28 have been raised to $5.38 billion, $5.98 billion, and $6.73 billion, respectively, with Non-GAAP net profit estimates adjusted to $555 million, $610 million, and $679 million [4]

Core Insights - The company reported better-than-expected performance for FY26Q1, with a revenue growth of 6.1% year-on-year, surpassing the previous guidance of 2%-5% [1] - The company anticipates a revenue growth of 9%-12% for FY26Q2 and maintains an annual growth target of 5%-10% [1] - The out-of-country business showed unexpected improvement, with a 1% growth in exam preparation and a 2% growth in study abroad consulting, indicating a recovery from previous pessimistic forecasts [1] Revenue and Growth Indicators - Deferred revenue increased by 10% year-on-year, and the renewal rate improved across all segments, suggesting robust growth [1] - The K12 business is expected to accelerate significantly in FY26Q2, with K9 growth around 20% and high school showing double-digit growth, validating the strategy of prioritizing product quality [2] - The active paid users in the OMO business reached 452,000, indicating potential for user retention and scalability [2] Shareholder Returns and Financial Health - The company announced a $190 million dividend and a $300 million buyback plan, totaling approximately $490 million, which represents over 130% of FY25 net profit [3] - Cash and cash equivalents stood at $5.03 billion as of FY26Q1, allowing for shareholder returns while maintaining strategic investments [3] - The combination of regular dividends and ongoing buybacks reflects a mature approach to shareholder returns, with a commitment to high payout ratios [3] Profitability and Cost Management - The Non-GAAP operating profit margin improved to 22.0%, driven by better resource utilization, operational leverage, and effective cost control [4] - The company expects further margin expansion in FY26Q2, with a focus on improving profitability in the core business [4] - The shift in the out-of-country business from being a drag on profits to reducing losses is a positive development [4] Earnings Forecast - The company maintains its Non-GAAP net profit forecasts for FY2026-2028 at $580 million, $630 million, and $690 million, respectively [4] - The current stock price corresponds to a PE ratio of 17, 15, and 14 for FY2026-2028, indicating a favorable valuation [4]

Core Insights - The latest quarterly financial reports from two major Chinese education companies, TAL Education (好未来) and New Oriental (新东方), reveal divergent growth paths and strategic focuses in the post-restructuring phase of the education industry [3][4]. Financial Performance - TAL Education reported a net income of $861 million for Q2 FY2026, marking a 39.1% year-over-year increase, while New Oriental's Q1 FY2026 net income was $1.523 billion, reflecting a 6.1% growth [1][2]. - TAL's operating profit reached $96.1 million with an operating margin of 11.2%, whereas New Oriental achieved an operating profit of $311 million and a margin of 20.4% [2][9]. - TAL's net profit surged by 116.1% to $124 million, while New Oriental's net profit slightly declined by 1.9% to $241 million [2][9]. Growth Strategies - Both companies are rapidly advancing in educational technology, with TAL emphasizing smart learning devices and digital teaching systems as key growth drivers [5][6]. - TAL's business model is shifting towards a subscription-based approach, aiming to extend the learning lifecycle beyond traditional classroom settings [7]. - New Oriental is focusing on a diversified revenue structure, with significant growth in adult and university exam services, as well as non-academic education [8]. Profitability and Efficiency - New Oriental maintains the highest profitability in the industry, with a focus on cost control and efficiency, while TAL is experiencing rapid profit growth driven by technology and product innovation [9][10]. - TAL's profit margin has doubled year-over-year, indicating a shift towards a technology-driven operational leverage model [10]. Capital Management - New Oriental exhibits a robust capital structure with over $5 billion in cash and equivalents, committing to return at least 50% of its net profit to shareholders [11][12]. - In contrast, TAL is investing heavily in technology and market expansion, reflecting a growth-oriented capital strategy [11][12]. Strategic Vision - TAL is positioning itself as a technology company, focusing on integrating quality educational content with smart devices, while New Oriental emphasizes brand trust and quality educational services [13][14]. - Both companies are addressing the challenge of redefining education in the era of AI and digitalization, albeit through different strategic lenses [14].

Investment Rating - The report maintains a "Buy" rating for New Oriental-S (09901.HK) [1] Core Insights - The company reported better-than-expected revenue growth in FY26Q1, with a year-on-year increase of 6.1%, surpassing previous guidance of 2%-5% [7] - The overseas business showed significant improvement, with a 25% revenue growth in the low-age study abroad segment, indicating a shift in demand rather than a decline [7] - K12 business is expected to accelerate, with anticipated growth rates of approximately 20% for K9 and double-digit growth for high school, validating the strategy of prioritizing product quality [7] - The company announced a shareholder return plan totaling approximately $490 million, which is over 130% of FY25 net profit, indicating strong profit visibility and cash flow [7] - Non-GAAP operating profit margin improved to 22.0%, with expectations for further expansion in Q2, driven by better resource utilization and cost control [7] Financial Projections - Total revenue is projected to grow from $4.9 billion in FY2025 to $6.3 billion in FY2028, with year-on-year growth rates of 13.6%, 9.96%, 10.00%, and 7.02% respectively [1][9] - Net profit attributable to shareholders is expected to increase from $371.72 million in FY2025 to $591.14 million in FY2028, with growth rates of 20.07%, 32.32%, 10.40%, and 8.87% respectively [1][9] - The current stock price corresponds to a PE ratio of 17, 15, and 14 times for FY2026, FY2027, and FY2028 respectively based on Non-GAAP metrics [1][9]

Group 1: Economic Indicators - China's official composite PMI data for October is set to be released [3] - Eurozone's core harmonized CPI for October is also scheduled for publication [3] - The US core PCE price index for September will be announced [3] Group 2: Market Performance - US stock indices closed lower, with the Nasdaq down 1.57%, S&P 500 down 0.99%, and Dow Jones down 0.23% [4] - Meta Platforms saw a significant drop of over 11%, marking its largest single-day decline in three years, resulting in a market cap loss of approximately $214 billion [4] - International oil prices experienced slight declines, with WTI crude oil down 0.31% to $60.29 per barrel and Brent crude down 0.42% to $64.05 per barrel [6] Group 3: Corporate Developments - Agricultural Bank of China reported a net profit of 222.3 billion yuan for the first three quarters of the year, a year-on-year increase of 3.28% [23] - Apple Inc. reported Q4 revenue of $102.47 billion, a year-on-year increase of 7.9%, with net profit reaching $27.47 billion [24] - Amazon's Q3 net sales were $180.17 billion, exceeding expectations, with a net profit of $21.19 billion [25] Group 4: Regulatory and Policy Updates - China's Ministry of Commerce announced plans to accelerate the development of green and low-carbon logistics [9] - The Chinese government will implement a new policy for duty-free shops starting November 1, 2025, aimed at boosting consumption [10] - The Financial Regulatory Bureau has expanded the pilot areas for pension financial products to nationwide, with a trial period extended to three years [12] Group 5: Industry Trends - OpenAI announced plans for the "Stargate" data center project in Michigan, with a planned capacity exceeding 8 GW and an investment of over $450 billion in the next three years [31] - YouTube is undergoing a restructuring focused on artificial intelligence applications, indicating a shift towards AI-driven products [26] - WeChat has launched three new features aimed at enhancing user experience, including bulk message recall and selective notification settings [28]

Core Insights - The establishment of the UOW College Australia preparatory study center in partnership with New Oriental marks a significant step in enhancing educational cooperation between China and Australia [1][4][10] - The initiative aims to provide Chinese students with a smoother transition to studying abroad by improving their academic and language skills in a familiar environment, thereby reducing adaptation challenges and costs [4][9] Summary by Sections Partnership and Ceremony - The ribbon-cutting ceremony was attended by key representatives from both UOW and New Oriental, highlighting the collaborative efforts in the international education sector [4][6] - The event signifies the launch of a new pathway for students to access quality education from UOW, which ranks 184th in the QS World University Rankings for 2026 [1][4] Student Benefits - Students enrolled in the preparatory program will be among the first beneficiaries of this initiative, allowing them to directly enter UOW's undergraduate programs after completing a 7-month course [3][9] - The program is designed to alleviate the preparation period for studying abroad and provide financial relief for families [9] Market Trends - A report indicates that 43% of students applying for undergraduate programs in Australia in 2024 prefer domestic preparatory courses, reflecting a shift towards safer and more adaptable study pathways [9] - The Australian government's supportive policies, including increased international student quotas, enhance the attractiveness of preparatory programs as a bridge to overseas education [9]

Core Insights - The company achieved a revenue of $1.523 billion in Q1 FY2026, representing a year-on-year increase of 6.1%, exceeding the previous forecast range of 5% [1] - Non-GAAP operating profit reached $336 million, up 11.3%, with a Non-GAAP operating margin improvement of 1 percentage point to 22% [1] - Deferred revenue stood at $1.907 billion, reflecting a 10% increase [1] Business Performance - The study abroad and university student segments outperformed expectations, while K12 business outlook remains positive [2] - K9 education new business revenue grew by 15%, with non-subject training participants at 530,000, up 10%, and active paid users for learning machines at 452,000, up 40% [2] - High school training revenue increased by 7%, impacted by scheduling and regional discounts; K12 business revenue is expected to accelerate in FY26Q2 [2] - Study abroad exam preparation and consulting revenue grew by 1% and 2% respectively, benefiting from improved external conditions [2] - University student business revenue increased by 14%, surpassing the previous growth expectation of 10% [2] Future Outlook - For FY2026Q2, the company expects net revenue growth of 9%-12%, maintaining a full-year guidance of 5%-10% growth [3] - A three-year shareholder return plan was announced, with plans to distribute approximately $190 million in cash dividends and a share buyback plan of up to $300 million [3] - The shareholder return plan corresponds to an estimated shareholder return rate of about 5.1% based on the latest market capitalization [3] Investment Recommendation - The company maintains a "better than market" rating due to its clear quality enhancement strategy, positive performance outlook, and attractive shareholder returns [4] - The core strategy of "enhancing capabilities and quality" aligns with the industry's shift towards prioritizing quality post-pandemic, reflected in the steady recovery of adjusted operating profit margins and improved K12 student retention rates [4] - Forecasts for adjusted net profits for FY2026-2028 are $430 million, $480 million, and $530 million, with corresponding P/E ratios of 23, 20, and 18 [4]

Core Insights - New Oriental achieved net revenue of $1.523 billion in FY26Q1, a year-on-year increase of 6.1%, exceeding previous guidance [1] - The company reported a net profit attributable to shareholders of $240,700, a decrease of 1.9% year-on-year, while Non-GAAP net profit was $258 million, down 1.6% [1] - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9%-12% [2] Business Performance - The overseas business segment saw revenue growth of 1.0% for exam preparation and 2.0% for consulting, with slower growth rates [1] - Domestic exam preparation for adults and college students grew by 14.4%, indicating strong performance [1] - New educational business revenue increased by 15.3%, although growth was impacted by intensified competition during the summer [1] Financial Guidance and Shareholder Returns - The company maintains its full-year net revenue guidance for FY26 at $5.145 billion to $5.390 billion, reflecting a year-on-year growth of 5%-10% [2] - A three-year shareholder return plan has been initiated, committing at least 50% of the previous fiscal year's net profit to shareholder returns, including a $190 million cash dividend and a $300 million share buyback [2] Operational Efficiency - Non-GAAP operating profit for FY26Q1 was $336 million, up 11.3% year-on-year, with an operating profit margin of 22.0%, an increase of 1.0 percentage points [2] - The improvement in profit margins is attributed to ongoing cost optimization and enhanced operational efficiency [2] - The company is focusing on prudent capacity expansion, advancing the OMO teaching system, and increasing the application of AI technology to improve overall operational efficiency [2] Profit Forecast and Valuation - The company has adjusted its net profit forecasts for FY26-28 to $442 million, $514 million, and $582 million, respectively, each down by 8% [3] - Corresponding EPS for FY26-28 is projected at $0.28, $0.33, and $0.37, with current stock prices reflecting PE ratios of 22x, 19x, and 16x [3] - The company remains a leader in the education and training industry, with strong demand persisting [3]

Core Viewpoint - The integration of corporate social responsibility with business models is essential for companies to gain respect, which in turn can enhance brand influence and market competitiveness, ensuring long-term sustainability [1][3]. Group 1: National Economic Development - The "14th Five-Year Plan" emphasizes focusing on the real economy, promoting intelligent, green, and integrated development, and aims to build a strong manufacturing, quality, aerospace, transportation, and network nation [2]. - The development of the real economy is fundamental to national growth, and companies play a crucial role in advancing commercial civilization and social progress [2]. Group 2: Characteristics of Respected Enterprises - Respected companies are distinguished not only by their successful business operations but also by their social responsibility, corporate culture, and brand value [3]. - The ongoing global business environment changes and increasing public expectations highlight the importance of earning respect over short-term profits for long-term survival [2][3]. Group 3: Expert Recommendations - BYD has been highly recommended by experts for its rapid global expansion and local production strategies, positioning itself among the top four global car manufacturers [9]. - Other companies like Keda Xunfei, Fuyao Glass, Haier Group, JD.com, Weichai Power, New Oriental, and Cambricon have also received expert recognition for their contributions and innovations [9][10][11]. - Experts noted that Keda Xunfei is leading in AI integration across various sectors, while Haier is recognized for its global outreach and commitment to sustainable practices [10][11]. Group 4: Public Perception of Respected Enterprises - The public identifies five key internal qualities for companies to be considered respected: establishing correct values, building a robust management system, continuous innovation, shaping a positive corporate citizen image, and providing high-quality products and services [15][16]. - Companies like Beijing Rural Commercial Bank, JD.com, and McDonald's exemplify these qualities through their commitment to social responsibility and brand value enhancement [16][17]. Group 5: Additional Notable Companies - Other respected companies include Moutai Group, Yili Group, and Nestle China, recognized for their high product quality and low carbon emissions [13]. - Traditional companies like Tongrentang and Li Ning have also been highlighted for their commitment to quality and innovation, contributing to their respected status [18].

Group 1 - Major Chinese concept stocks such as Alibaba, TSMC, and NIO saw a maximum increase of 1.8% [1] - New Oriental, Li Auto, and Pony.ai experienced declines of over 1%, while Wenyan Zhixing dropped by 4.6% [1] - In the ETF sector, ASHS rose by 1.4%, CQQQ increased by 0.8%, and KWEB gained 0.2% [1]