Investment Rating - The report maintains a "Buy" rating for New Oriental Education Technology (9901 HK) with a target price adjusted to HKD 60.00, indicating a potential upside of 28.5% from the current price of HKD 46.70 [1][3][13]. Core Insights - The report expresses optimism regarding the K12 growth prospects despite uncertainties affecting revenue expectations, maintaining a "Buy" stance [1][6]. - The company's revenue for the fiscal year ending May 31, 2025, is projected to reach USD 4.972 billion, reflecting a year-on-year growth of 15.3% [2][15]. - The adjusted net profit for the fiscal year 2025 is estimated at USD 481 million, with an adjusted EPS of USD 0.29, showing a growth of 27.7% compared to the previous year [2][15]. Financial Overview - Revenue projections for New Oriental Education Technology are as follows: - 2023: USD 2.998 billion - 2024: USD 4.314 billion - 2025E: USD 4.972 billion - 2026E: USD 5.928 billion - 2027E: USD 6.872 billion - The company is expected to achieve a net profit of USD 259 million in 2023, increasing to USD 720 million by 2027 [2][15]. - The report highlights a significant increase in new business revenue, which is expected to maintain a high growth rate of 43% year-on-year, contributing to 28% of total revenue [6][7]. Performance Metrics - The report notes that the adjusted operating profit margin for the second quarter of fiscal year 2025 is projected at 2.7%, with a net profit margin of 3.4% [6][7]. - The company’s K12 education business is anticipated to show a revenue growth rate exceeding 30% for the fiscal year 2025, contributing nearly 60% to core education revenue [6][7]. - The report indicates that the company’s stock price has recently declined by 22% following earnings announcements, leading to a future 12-month P/E ratio of 13.8, which is considered low historically [6][7].

Investment Rating - Maintain BUY rating with a revised target price of US$80 0 (previous US$87 0) [1] Core Views - New Oriental's 2QFY25 net revenue grew 19% YoY to US$1 039mn (+31% YoY excluding East Buy revenue) in line with estimates but non-GAAP net income declined 29% YoY to US$36mn below estimates due to East Buy adjustment and tourism business investments [1] - Management guided 3QFY25E net revenue (excluding East Buy) to grow 18-21% YoY to US$1 01-1 03bn below expectations due to macro uncertainty and intensifying competition [1] - FY25-27E total revenue forecasts trimmed by 2-3% due to softer-than-expected revenue guidance [1] Earnings Summary - FY25E revenue forecast at US$5 081mn with adjusted net profit of US$439 4mn and EPS of US$2 65 [2] - FY27E revenue forecast at US$6 725mn with adjusted net profit of US$829 8mn and EPS of US$5 01 [2] - P/E ratio expected to decline from 25 4x in FY25E to 13 8x in FY27E [2] Business Segments - Overseas test prep and study consulting revenue grew 21% and 31% YoY respectively in 2QFY25 accounting for 24% of total revenue [5] - Domestic test prep revenue grew 35% YoY accounting for 9% of total revenue in 2QFY25 [5] - New educational initiatives revenue grew 43% YoY in 2QFY25 driven by non-academic tutoring (student enrolment +26% YoY) and intelligent learning systems (active paid users +44% YoY) [5] - East Buy revenue declined 9% YoY with a net loss of US$13 5mn in 1HFY25 but would have recorded US$4 6mn net income excluding the impact of Time with Yuhui disposal [5] - Tourism business revenue grew 233% YoY in 2QFY25 [5] Financial Forecasts - FY25E revenue revised down 2 6% to US$5 080 9mn with gross profit revised down 3 8% to US$2 721 0mn [6] - FY25E non-GAAP net income revised down 15 0% to US$439 4mn with EPS revised down 15 0% to US$2 7 [6] - Gross margin expected to be 53 6% in FY25E down 0 7ppt from previous forecast [6] Valuation - Educational and consulting business valued at US$77 1 (96% of total valuation) based on 28x FY25E PE [8] - East Buy valued at US$1 6 (2% of total valuation) based on 8x FY25E PE [8] - Tourism and others business valued at US$1 3 (2% of total valuation) based on 10x FY25E PE [8] - Sum-of-the-parts valuation of US$14 773 7mn with a 10% holdco discount resulting in a total valuation of US$13 296 3mn [9] Peer Comparison - Education sector average PE of 28 4x for FY25E and 16 1x for FY26E [11] - E-commerce sector average PE of 8 0x for FY25E and 7 0x for FY26E [11]

Investment Rating - The report maintains a "Buy" rating for the company, anticipating a price increase of over 15% in the next 6-12 months [4]. Core Insights - The company reported FY2Q25 unaudited revenue of $1.039 billion, representing a year-over-year increase of 19.4%. The net profit attributable to shareholders was $32 million, up 6.2%, while the adjusted net profit decreased by 29.1% to $36 million [1][2]. - The education segment, excluding certain businesses, generated $894 million in revenue, marking a 31.3% increase, surpassing previous guidance [2]. - The company expects FY3Q25 education revenue to be between $1.01 billion and $1.03 billion, reflecting a growth of 20-23% [2]. Summary by Sections Financial Performance - The company achieved a gross margin of 52.0%, an increase of 0.6 percentage points year-over-year. The operating profit margin (excluding e-commerce) was 2.8%, up 1.0 percentage points [3]. - The forecast for Non-GAAP net profit for FY25 to FY27 is $490 million, $670 million, and $850 million, respectively, with year-over-year growth rates of 34.75%, 35.96%, and 27.21% [4]. Revenue Growth - The education business saw significant growth, with overseas exam training and consultation services increasing by 21.1% and 31.0%, respectively. Domestic exam training for adults and college students grew by 34.9% [2]. - The number of active paid users for the smart learning system increased by 44.2% to 261,000 [2]. Cost Management - The company effectively controlled costs, with a sales expense ratio of 18.9% and a management expense ratio of 31.3%, both showing slight increases [3].

Financial Data and Key Metrics - The company released its financial results for the second fiscal quarter of 2025, which are available on the company's website and Newswire services [3] Business Updates and Strategy - The company's Executive President and Chief Financial Officer, Stephen Yang, along with Investor Relations Director, Sisi Zhao, will provide detailed updates on the latest earnings results and business developments [3] Forward-Looking Statements - The discussion during the conference call will include forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995 [4] - These statements involve inherent risks and uncertainties, and actual results may differ materially from those expressed [4] - The company has outlined potential risks and uncertainties in its public filings with the SEC and does not undertake any obligation to update any forward-looking statements [4] Q&A Session - The management will be available to answer questions after the prepared remarks [3]

Core Insights - New Oriental Education & Technology Group reported strong revenue growth of 19.4% year-over-year, reaching $1.04 billion, surpassing analyst expectations of $1.01 billion [2][4] - The company faced challenges in adjusted earnings per share (EPS), reporting $0.22, which was below the forecasted $0.30, indicating a 24% decline from the previous year [4][8] - The operating margin decreased from 2.5% to 1.9%, attributed to increased operational costs related to business expansion and regulatory adaptations [4][8] Financial Performance - Revenue for Q2 FY2025 was $1.04 billion, a 19.4% increase from $869.6 million in Q2 FY2024 [4] - Adjusted EPS was $0.22, down from $0.29 in the same quarter last year [4] - Net income rose to $31.9 million, a 6.2% increase from $30.1 million in Q2 FY2024 [4] Operational Developments - The revenue growth was primarily driven by the expansion of non-academic tutoring services and intelligent learning systems, with a notable 31.3% growth when excluding contributions from East Buy [7] - Key segments such as overseas test preparation and study consulting saw growth rates of 21% and 31%, respectively, demonstrating the company's adaptability to regulatory changes [8] Regulatory Environment - The company continues to navigate challenges from China's "double reduction" policy, which aims to reduce student workloads and private tutoring hours, necessitating a pivot towards diversification and strategic cost management [9] - Operational costs increased by 20% year-over-year, reflecting the impact of regulatory adaptations [9] Strategic Outlook - Looking ahead, New Oriental projects a revenue increase of 18% to 21% for Q3 FY2025, excluding East Buy contributions, with a focus on expanding private label products and enhancing digital outreach [12] - Management is committed to strategic growth and profitability, emphasizing diversification and leveraging technology to capture new revenue opportunities [10][12]

Group 1 - U.S. stock futures are higher, with Dow futures gaining over 200 points [1] - New Oriental Education & Technology Group Inc. reported weak quarterly earnings, with adjusted earnings of 22 cents per share, missing the analyst consensus estimate of 30 cents per share [1] - The company's quarterly sales were $1.04 billion, slightly beating the analyst consensus estimate of $1.03 billion [1] Group 2 - New Oriental Education & Technology Group shares fell 16.2% to $50.98 in pre-market trading [2] - TechTarget, Inc. shares tumbled 19.5% to $14.00 in pre-market trading [3] - Baird Medical Investment Holdings Limited shares fell 18.2% to $7.24 after a previous jump of 63% [3] - Ranpak Holdings Corp. shares dipped 18.2% to $5.21 in pre-market trading [3] - Rayonier Advanced Materials Inc. shares declined 17.1% to $6.24 in pre-market trading [3] - SWK Holdings Corporation shares dipped 14.3% to $14.00 in pre-market trading [3] - Walgreens Boots Alliance, Inc. shares fell 6.8% to $11.66 following a lawsuit from the U.S. Justice Department [3] - Contineum Therapeutics, Inc. shares fell 6.8% to $11.60 in pre-market trading [3] - Tile Shop Holdings, Inc. shares fell 3.6% to $6.78 in pre-market trading [3]

Exhibit 99.1 New Oriental Announces Results for the Second Fiscal Quarter Ended November 30, 2024 BEIJING, Jan. 21, 2025 /PRNewswire/ – New Oriental Education & Technology Group Inc. (the "Company" or "New Oriental") (NYSE: EDU/ 9901.SEHK), a provider of private educational services in China, today announced its unaudited financial results for the second fiscal quarter ended November 30, 2024, which is the second quarter of New Oriental's fiscal year 2025. Financial Highlights for the Second Fiscal Quarter ...

Investment Rating - The report assigns a "Buy" rating with a target price of HKD 62.84, based on a FY25 PE of 25X [3]. Core Views - The K12 education training policy is improving, with a significant reduction in offline training institutions, leading to a shift from academic tutoring to quality education training. The high school student population is expected to grow, and the declining college admission rates will drive the recovery of the high school academic training market [2]. - The company's brand strength remains robust, with revenue and capacity recovering to industry-leading levels. The company is expected to benefit from the recovery of profit margins as capacity increases [2]. - Future growth drivers include strong demand for quality training and learning devices, recovery in overseas study services, and potential growth in cultural tourism and e-commerce businesses [2][3]. Summary by Sections Company Overview - The company has been deeply involved in the education sector for 31 years, evolving from providing exam preparation for students studying abroad to a comprehensive education group covering various services including K12 training, overseas study services, vocational education, and online education [1][15]. K12 Education - The K12 education sector is experiencing favorable policies and effective supply clearing, with a 96.7% reduction in offline academic training institutions by January 2025. The demand for quality training is expected to grow as the market shifts from academic tutoring [2][36]. - The company is well-positioned to capture the growing demand for quality education and learning devices, with a significant increase in the number of students participating in quality education programs [2][45]. Overseas Study Services - The demand for overseas study services is recovering, with the market expected to stabilize as the supply of study institutions improves. The company holds a leading position in this sector [2][3]. Other Businesses - The cultural tourism business is anticipated to become a new growth curve, while the e-commerce segment is expected to recover from short-term challenges and return to reasonable growth in the medium to long term [2][3]. Profit Forecast and Valuation - The report forecasts Non-GAAP net profits of USD 528 million, USD 692 million, and USD 887 million for FY25, FY26, and FY27, respectively, with year-on-year growth rates of 44.5%, 31.1%, and 28.2% [3][6].

Financial Performance - For the second quarter of fiscal year 2025, net revenue increased by 19.4% year-over-year to $1,038.6 million, with net revenue excluding certain product lines rising by 31.3% to $894.2 million[6]. - Operating profit for the second quarter decreased by 9.8% year-over-year to $19.3 million, while operating profit excluding certain product lines increased by 102.5% to $25.0 million[7]. - Net profit attributable to New Oriental shareholders rose by 6.2% year-over-year to $31.9 million[7]. - For the first half of fiscal year 2025, net revenue increased by 25.6% year-over-year to $2,474.1 million[8]. - The company reported a 41.9% year-over-year increase in net profit attributable to New Oriental shareholders for the first half, reaching $277.4 million[8]. - The company achieved a Non-GAAP operating profit of $27.6 million in the second quarter, with a GAAP operating profit margin of 2.8%, reflecting a year-over-year increase of 100 basis points[11]. - The Non-GAAP net profit attributable to New Oriental shareholders for the quarter was $35.5 million, a decrease of 29.1% year-over-year[21]. - Net revenue for the three months ended November 30, 2024, was $1,038,636, an increase of 19.5% compared to $869,600 for the same period in 2023[49]. - Operating profit for the same period was $19,255, representing a decrease of 9.8% from $21,342 in the prior year[49]. - Net profit attributable to shareholders was $31,931, up 6.2% from $30,066 in the previous year[49]. - Net revenue for the six months ended November 30, 2024, was $2,474,052, an increase from $1,969,621 in 2023, representing a growth of approximately 25.6%[60]. - Operating profit for the same period was $312,405, compared to $226,466 in 2023, reflecting a year-over-year increase of about 37.9%[60]. - Net profit attributable to shareholders was $277,361, up from $195,452 in the previous year, indicating a growth of approximately 41.9%[60]. Operational Efficiency - The company plans to continue focusing on improving operational efficiency and teaching space utilization in the second half of the fiscal year[11]. - The operating profit for the quarter was $19.3 million, a decline of 9.8% year-over-year, resulting in an operating profit margin of 1.9%[18]. - The company reported a non-GAAP operating profit margin of 2.7%, down from 5.9% in the prior year[51]. - The operating profit margin improved to 12.6% from 11.5% in the previous year, indicating enhanced operational efficiency[62]. Cash and Investments - Cash and cash equivalents, along with short-term investments, totaled approximately $4.8 billion at the end of the quarter[11]. - New Oriental's cash and cash equivalents as of November 30, 2024, amounted to $1,418.2 million, with deferred revenue increasing by 19.2% year-over-year to $1,960.6 million[23]. - Cash and cash equivalents increased to $1,418.2 million from $1,389.4 million, reflecting a growth of approximately 2.1%[44]. - Short-term investments decreased to $1,951.4 million from $2,065.6 million, a decline of about 5.5%[44]. - The ending cash and cash equivalents balance was $1,611,073, down from $2,120,746 in 2023, a decrease of approximately 24.0%[68]. Strategic Focus - The company emphasizes the importance of Non-GAAP financial metrics to provide additional insights into operational performance and liquidity[41]. - The management highlighted the ongoing risks and uncertainties in the private education sector in China, which may impact future performance[38]. - The company is focused on maintaining and enhancing the "New Oriental" brand while ensuring quality in teaching and services[38]. - Future strategies include potential market expansion and acquisitions to enhance service offerings and competitive positioning[38]. - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[73]. - The company is focused on enhancing its operational efficiency and exploring potential mergers and acquisitions to strengthen its market position[73]. Assets and Liabilities - As of November 30, 2024, total assets amounted to $7,634.5 million, an increase from $7,531.7 million as of May 31, 2024[44]. - Total liabilities increased to $3,652,857 as of November 30, 2024, compared to $3,482,659 as of May 31, 2024, reflecting a growth of 4.9%[46]. - Total equity decreased to $3,981,631 from $4,049,014, a decline of 1.7%[46]. - The company’s total assets were reported at $7.531673 billion, with total liabilities of $3.482659 billion[79]. - Shareholders' equity totaled $3.775934 billion, indicating a strong financial position[79]. Accounting Standards - The financial statements were prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP), with notable differences from IFRS[73]. - Adjustments under International Financial Reporting Standards (IFRS) showed a difference in reported figures, with significant impacts on revenue and expenses[73]. - The company recognizes compensation expenses using the graded attribution method after estimating forfeitures during the necessary service period according to international financial reporting standards[85]. - Under US GAAP, the amortization of right-of-use assets and interest expenses related to lease liabilities are recorded as lease expenses, resulting in a straight-line recognition effect in the profit and loss statement[85]. - The company applies the straight-line method for amortizing right-of-use assets, while interest expenses related to lease liabilities are measured at amortized cost according to international financial reporting standards[86].

Financial Performance - New Oriental reported net revenues of US$1,038.6 million for the second fiscal quarter of 2025, a 19.4% increase year over year [8][12] - Operating income decreased by 9.8% year over year to US$19.3 million, while non-GAAP operating income fell by 45.8% to US$27.6 million [16][19] - Net income attributable to New Oriental increased by 6.2% year over year to US$31.9 million, with basic and diluted net income per ADS at US$0.20 and US$0.19 respectively [18][19] Revenue Breakdown - Total net revenues, excluding revenues from East Buy private label products and livestreaming business, increased by 31.3% year over year to US$894.2 million [8][12] - The overseas test preparation and overseas study consulting business grew by approximately 21.1% and 31.0% year over year [7] - Domestic test preparation targeting adults and university students recorded a growth of approximately 34.9% year over year [9] Operating Costs and Expenses - Operating costs and expenses for the quarter were US$1,019.4 million, representing a 20.2% increase year over year [14] - Non-GAAP operating costs and expenses, excluding share-based compensation, were US$1,011.1 million, a 23.5% increase year over year [14] - Total share-based compensation expenses decreased by 71.8% to US$8.3 million [15] Cash Flow and Balance Sheet - Net operating cash inflow for the second fiscal quarter was approximately US$313.3 million, with capital expenditures of US$60.6 million [20] - As of November 30, 2024, cash and cash equivalents totaled approximately US$1.4 billion, with total assets amounting to US$7.6 billion [21][44] Shareholder Returns - The board approved a special cash dividend of US$0.06 per common share, totaling approximately US$100 million distributed [10] - A share repurchase program was extended, increasing the authorized repurchase amount from US$400 million to US$700 million [11] Future Outlook - New Oriental expects total net revenues for the third quarter of fiscal year 2025 to be in the range of US$1,007.3 million to US$1,032.5 million, reflecting a year-over-year increase of 18% to 21% [31]