Core Viewpoint - The report from CMB International maintains a target price of HKD 46 for New Oriental-S (09901) and a "Buy" rating, while adjusting revenue and operating profit forecasts for the fiscal years 2026 and 2027 downward by approximately 3% and 17% respectively [1] Group 1: Financial Projections - Revenue growth is expected at 10% and 14% for fiscal years 2026 and 2027 respectively, with an operating profit margin projected at 10.2% and 10.5%, showing a slight increase compared to fiscal year 2025 [1] - The fourth quarter of fiscal year 2025 saw a revenue increase of 9.4% year-on-year, surpassing the expectations of CMB International and other institutions, which were 2% and 5% respectively [1] - Excluding Dongfang Zhenxuan (01797), education and cultural tourism revenue increased by 19% year-on-year, with an education operating profit margin of 6.5%, up 410 basis points from the same period last year due to effective cost reduction and efficiency improvement measures [1] Group 2: Business Segments and Market Outlook - The guidance for the first quarter was below expectations primarily due to seasonal factors, but growth is expected to recover in the second to fourth quarters [1] - The management's guidance for fiscal year 2026 indicates a group revenue increase of 5-10%, compared to the market expectation of 12%, with the main adjustment being a downward revision of the growth forecast for overseas-related business to a decline of 5% [1] - The growth rate for K12-related business is maintained at the market expectation of 19% [1] Group 3: Valuation Methodology - CMB International has adjusted its valuation method to SOTP, assigning a price-to-earnings ratio of 15 times for K12 business and 8 times for study abroad business for fiscal year 2026, corresponding to profit growth rates of +22% and -10% respectively [1] - The company is accelerating cost optimization efforts, aiming to achieve stable or slightly increased operating profit margins for the entire year [1]

Core Insights - The article presents the market capitalization rankings of the top 50 Chinese technology and internet companies as of August 1, 2025, highlighting significant shifts in rankings and valuations [1]. Group 1: Market Capitalization Rankings - TSMC leads the list with a market capitalization of $125.32 billion [3]. - Tencent Holdings ranks second with a market capitalization of $64.22 billion [3]. - Alibaba has moved up to the third position with a market capitalization of $28.77 billion, showing a notable increase from its previous rank of 12 [3]. Group 2: Notable Companies and Changes - Xiaomi Group is ranked fourth with a market capitalization of $17.57 billion [3]. - Pinduoduo follows closely in fifth place with a market capitalization of $16.11 billion [3]. - Meituan and NetEase are ranked sixth and seventh, with market capitalizations of $9.46 billion and $8.25 billion, respectively [3][4]. Group 3: Additional Rankings - Semiconductor Manufacturing International Corporation (SMIC) is in eighth place with a market capitalization of $5.23 billion [4]. - JD.com is ranked tenth with a market capitalization of $4.54 billion [4]. - Kuaishou and Tencent Music are ranked 11th and 12th, with market capitalizations of $4.17 billion and $3.25 billion, respectively [4]. Group 4: Lower Rankings - Companies ranked from 25 to 50 include Kingdee International at $0.83 billion and Yuyuan at $0.40 billion, indicating a diverse range of valuations among the lower-ranked firms [5][6].

Investment Rating - The report downgrades the investment rating to "Accumulate" with an expected price increase of 5% to 15% over the next 6-12 months [5]. Core Views - The company reported Q4 FY2025 revenue of $1.243 billion, a year-over-year increase of 9.4%, with the education segment revenue reaching $1.089 billion, up 18.7%, exceeding guidance [2]. - The company announced a three-year shareholder return plan, committing to return at least 50% of the previous fiscal year's net profit to shareholders through dividends and buybacks, estimating a total return of no less than $186 million for FY2025 [4]. - The education business is expected to experience a slowdown in revenue growth due to economic conditions and increased competition, with Q1 FY2026 international exam preparation and study abroad consulting revenues projected to decline by 5% year-over-year [3]. Summary by Sections Performance Review - FY2025 Q4 revenue was $1.243 billion, with a 9.4% year-over-year increase. The education business revenue was $1.089 billion, up 18.7%, surpassing guidance. Non-GAAP operating profit margin improved to 6.5%, a 4.1 percentage point increase year-over-year [2]. Operational Analysis - The education business revenue growth is expected to slow in FY2026 due to economic and international factors. Q1 FY2026 international business is projected to decline by 5%, while K9 business is expected to grow by 15-16% [3]. - Profit pressure is anticipated from the slowdown in education revenue, but cost reduction and efficiency improvements are expected to positively impact profit margins by 1-1.5 percentage points [3]. Profit Forecast, Valuation, and Rating - The company is projected to achieve total revenues of $5.276 billion, $5.719 billion, and $6.228 billion for FY2026, FY2027, and FY2028, respectively, with a three-year compound growth rate of 8% [5]. - Non-GAAP net profit estimates are $560 million, $598 million, and $641 million for FY2026, FY2027, and FY2028, respectively, with adjusted PE ratios of 14, 13, and 12 times [5].

Core Insights - New Oriental Education Technology Group reported a revenue of $3.657 billion for the fiscal year ending February 28, 2025, reflecting a year-over-year growth of 15.12% [1] - The company's net profit attributable to shareholders reached $365 million, marking a 29.01% increase compared to the previous year [1] Company Overview - New Oriental Education Technology Group is positioned as a comprehensive education group focused on the holistic growth of students, driven by technology [2] - The company has evolved from the Beijing New Oriental School, established in 1993, and has developed multiple platforms including short-term training, cultural dissemination, consulting services, and technology industries [2] - New Oriental is a well-known private education institution in China, successfully listed on the New York Stock Exchange in September 2006 and later on the Hong Kong Stock Exchange in November 2020 [2]

One stock to keep an eye on is New Oriental Education & Technology Group (EDU) . EDU is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.06, which compares to its industry's average of 14.58. EDU's Forward P/E has been as high as 20.90 and as low as 11.51, with a median of 14.87, all within the past year. Investors should also recognize that EDU has a P/B ratio of 2. The P/B is a method of comparing a stock's market value to its book value, ...

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Core Viewpoint - New Oriental has experienced a challenging fiscal year 2025 and is expected to face an even more difficult fiscal year 2026, with revenue growth slowing significantly compared to previous years [1][14]. Financial Performance - In Q4 of fiscal year 2025, New Oriental reported revenue of $1.24 billion, a year-on-year increase of 9.4%. For the entire fiscal year, revenue reached $4.9 billion, up 13.6% year-on-year [1][3]. - The net profit attributable to shareholders was $7.1 million, a dramatic decline of 73.7% year-on-year [3][5]. - Operating costs and expenses for the quarter were $1.25 billion, an increase of 11.2%, outpacing revenue growth [5]. Profitability Issues - The significant drop in net profit was primarily due to increased costs and expenses, including a goodwill impairment of $60.3 million, which was a major factor in the profit decline [5][8]. - Excluding the goodwill impairment, the profit would have shown a substantial year-on-year increase of approximately 150% [8]. Revenue Growth Trends - Revenue growth for New Oriental's educational services has been slowing down, with quarterly growth rates decreasing from 49.8% to 32.5% over the fiscal year [10]. - The K9 business remains a strong performer despite increased competition, maintaining high growth due to its large market size and New Oriental's brand strength [10][11]. Business Segment Performance - The non-academic tutoring business saw approximately 918,000 registrations in Q4, reflecting a significant increase from previous quarters [11]. - The overseas examination preparation and consulting businesses have stabilized, with revenue growth of 14.6% and 8.2% respectively in Q4 [12]. Future Outlook - For Q1 of fiscal year 2026, New Oriental expects revenue to be between $1.46 billion and $1.51 billion, representing a year-on-year growth of 2% to 5% [14]. - The company anticipates a more stable and sustainable growth phase, with full-year revenue projections for fiscal year 2026 set between $5.15 billion and $5.39 billion, indicating a growth of 5% to 10% [15].

Core Viewpoint - New Oriental has experienced a challenging fiscal year 2025 and is expected to face an even tougher fiscal year 2026, with significant concerns regarding slowing growth and declining net profits [1][3][12]. Financial Performance - In Q4 of fiscal year 2025, New Oriental reported revenue of $1.24 billion, a year-on-year increase of 9.4%. For the entire fiscal year, revenue reached $4.9 billion, up 13.6% year-on-year [1][3]. - The net profit attributable to shareholders was $7.1 million, a dramatic decline of 73.7% year-on-year [3][4]. - Operating costs and expenses increased by 11.2% to $1.25 billion, surpassing the revenue growth rate of 9.4% [4]. Reasons for Declining Profit - The significant drop in net profit is primarily attributed to increased costs and expenses, including a notable goodwill impairment of $60.3 million, which was a one-time charge related to previous acquisitions of kindergartens [4][7]. - Excluding the goodwill impairment, the profit would have shown a substantial year-on-year increase of approximately 150% [7]. Business Segment Performance - New Oriental's education new business, primarily K9, has seen a gradual decline in revenue growth rates, with quarterly growth rates of 49.8%, 42.6%, 34.5%, and 32.5% respectively [9]. - The non-academic tutoring business reported approximately 918,000 enrollments in Q4, reflecting a significant increase from previous years [9]. - Traditional overseas exam preparation and consulting services have stabilized, with revenue growth of 14.6% and 8.2% respectively in Q4 [10]. Future Outlook - For Q1 of fiscal year 2026, New Oriental expects revenue to be between $1.46 billion and $1.51 billion, representing a year-on-year growth of 2% to 5% [12][13]. - The full fiscal year 2026 revenue is projected to be between $5.15 billion and $5.39 billion, with an anticipated growth rate of 5% to 10% [13]. - The K9 business is expected to grow around 20%, while overseas-related businesses are projected to grow by 4% to 5% [13].

Core Viewpoint - New Oriental has experienced a challenging fiscal year 2025 and is expected to face an even tougher fiscal year 2026, with significant concerns regarding slowing revenue growth and declining net profit [1][2]. Revenue Performance - In Q4 of fiscal year 2025, New Oriental reported revenue of $1.24 billion, a year-on-year increase of 9.4%. For the entire fiscal year, revenue reached $4.9 billion, up 13.6% year-on-year [1][2]. - The revenue growth rate has significantly slowed compared to fiscal year 2024, which saw a growth rate of 43.9% [1]. - The company forecasts Q1 of fiscal year 2026 revenue growth to be only 2% to 5%, with an annual growth expectation of 5% to 10% [1][10]. Net Profit Analysis - New Oriental's net profit for Q4 of fiscal year 2025 was $7.1 million, a dramatic decline of 73.7% year-on-year [2][4]. - The sharp decline in net profit is primarily attributed to increased costs and expenses, which rose by 11.2% to $1.25 billion, outpacing revenue growth [4]. - A significant factor in the profit drop was a goodwill impairment of $60.3 million, related to previous acquisitions of kindergartens, which was a one-time charge [4][5]. Business Segment Performance - The growth of New Oriental's educational new business, primarily K9, has been slowing, with revenue growth rates of 49.8%, 42.6%, 34.5%, and 32.5% over the past four quarters [7]. - Traditional overseas exam preparation and consulting services have stabilized, with revenue growth of 14.6% and 8.2% respectively in Q4 [8][9]. - Domestic exam preparation services have also shown a decline in growth, influenced by reduced enrollment and participation [9]. Future Outlook - The company anticipates a revenue range of $1.46 billion to $1.51 billion for Q1 of fiscal year 2026, indicating continued slow growth [10]. - For the entire fiscal year 2026, revenue is projected to be between $5.15 billion and $5.39 billion, with specific growth expectations of approximately 20% for K9 business and 10% for domestic exam preparation [10].

Core Insights - New Oriental's net revenue for Q4 of fiscal year 2025 reached $1.243 billion, representing a year-over-year increase of 9.4% [1] - The company's operating loss for Q4 was $8.7 million, a decline from an operating profit of $10.5 million in the same quarter last year [1] - Net profit attributable to New Oriental shareholders fell by 73.7% to $7.1 million in Q4 [1] Revenue Growth - The increase in net revenue was primarily driven by new educational business initiatives [2] - Revenue from overseas exam preparation and consulting services grew by approximately 14.6% and 8.2% year-over-year, respectively [2] - Domestic exam preparation services for adults and college students saw a year-over-year growth of about 17.0% [2] - New educational businesses maintained strong growth, with revenue increasing by 32.5% year-over-year [2] Cost and Expenses - Total operating costs and expenses for the quarter amounted to $1.25 billion, up 11.2% year-over-year [2] - Various costs, including revenue costs, sales and marketing expenses, and general and administrative expenses, all experienced increases [2] - Share-based compensation expenses rose by 11.0% to $28.6 million [2] Annual Performance - For the fiscal year ending May 31, 2025, New Oriental's net revenue was $4.9 billion, a year-over-year increase of 13.6% [2] - Operating profit for the fiscal year was $428 million, reflecting a 22.2% increase year-over-year [2] - Non-GAAP operating profit for the fiscal year was $554 million, up 15.8% year-over-year [2] Profitability Metrics - The operating profit margin for fiscal year 2025 was 8.7%, compared to 8.1% in the previous year [3] - The Non-GAAP operating profit margin was 11.3%, slightly up from 11.1% year-over-year [3] - Net profit attributable to New Oriental shareholders for the fiscal year was $370 million, a 20.1% increase year-over-year [3] - Basic and diluted net profit per ADS for the fiscal year were $2.29 and $2.28, respectively [3]