Investment Rating - Buy (Maintained) [4] Core Views - The company is expected to achieve a more balanced expansion and store efficiency from H2 2024, leading to better-than-expected revenue, profit scale, and margin improvement [1] - Market share is expected to continue optimizing, with K9 non-academic and high school stage revenues projected to exceed $2.2 billion and $1.8 billion respectively by FY27, with a CAGR of 35% and 19% from FY24 to FY27 [2] - Profit margins have ample room for optimization, with gross margins expected to improve by 4-5 percentage points due to increased utilization rates, OMO-driven store efficiency, and optimized rental costs [2] - The company is currently in an adjustment observation period, with short-term catalysts expected from summer and autumn enrollment growth outpacing store expansion [2] Market Share Optimization - The company's market share is expected to significantly improve compared to pre-double reduction levels, with K12 student enrollment share projected to reach 2.7% by FY27, matching FY2021 levels [2] - Market share growth is driven by: - Strict entry barriers for quality-oriented literacy courses [2] - Stronger financial capabilities for expansion compared to smaller institutions [2] - Standardized and high-quality teaching research providing cost-effective services [2] - National brand recognition post-2021 [2] Profit Margin Optimization - Gross margins are expected to improve by 4-5 percentage points due to increased utilization rates (from 66% to 80%), OMO-driven store efficiency, and optimized rental costs [2] - Management expense ratios are expected to improve by at least 2 percentage points over the next three years, driven by more balanced KPI settings and faster revenue growth [2] - The company's rapid store expansion in FY24Q4, with 114 new stores added, is seen as a temporary factor affecting margins, not a sign of intensified competition [2] Financial Projections and Valuation - Adjusted net profits for FY25-FY27 are projected at $541 million, $726 million, and $928 million, respectively, with PE ratios of 21.3x, 15.9x, and 12.4x based on the closing price on August 16, 2024 [3] - The company's FY25 PS ratio of 2.3x is below the industry average of 2.7x, and its FY25 PE ratio is lower than peers like TAL Education (42.8x) and Xueda Education (28.1x) [3] - A target market cap of $16.2 billion is set for FY25, implying a 41% upside from the August 16, 2024 closing price [3] Store Expansion and Efficiency - FY24 saw a 37% increase in learning centers, with 1,025 centers by FY24Q4, exceeding the 30% growth guidance [35] - Store expansion slowed in July 2024, signaling a shift towards balancing enrollment growth and store efficiency [35] - The company plans to increase capacity by 20%-25% in FY25, focusing on cities with better revenue and profit performance [35] Business Performance - FY24Q4 revenue grew 32% YoY to $1.14 billion, slightly above guidance, but non-GAAP operating profit and net profit were below Bloomberg consensus estimates due to factors like store expansion costs and management incentives [10] - Education-related new businesses grew rapidly, with FY24Q4 revenue up 50.3% YoY, and non-academic course enrollments increased by 39% YoY to 875,000 [12] - The company expects FY25Q1 revenue (excluding Dongfang Zhenxuan) to grow 31%-34% YoY, with education business operating margins improving by 2 percentage points [13]

已经丧失了信任的两方，终于可以不用再拧巴了。 文丨陈晶 编辑丨宋玮 "当不信任的扳机扣动后，很多事情的走向就不受任何一方的控制了。" 一位接近双方的人士如此评价与辉 同行 CEO 董宇辉、东方甄选 CEO 俞敏洪二人的 "分手" 结局。 这种不信任感始于董宇辉在东方甄选做主播期间声名鹊起，在 "小作文" 事件后达到顶峰——去年底一位 东方甄选员工称视频文案为团队而非都是董宇辉个人作品，被董宇辉的粉丝质疑 "抢功劳"。粉丝和东方甄 选员工来回缠斗、股价经历了多轮下跌。 7 个月后，董宇辉、俞敏洪分道扬镳。过去半年，董宇辉分走了与辉同行的一半利润，剩下另一半也被东 方甄选分配给了董宇辉，此外，董宇辉购买与辉同行的 7658 万元也将由新东方支付。 据东方甄选 7 月 25 发布的公告，将与辉同行利润分派给董宇辉，是出于 "俞先生及本集团对董先生所作贡 献的感谢及赞赏"。不少媒体将这笔利润分成总结为 "分手费"。 接近交易的知情人士称，今天的分成方案，是双方半年前就达成的承诺，并非是因 "分手" 给出的补偿。 上述人士说，去年底，有直播机构开出年薪 8 亿元邀请董宇辉加盟，俞敏洪为了留住董宇辉，曾承诺接下 来一年给 ...

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's revenue for FY2024Q4 reached $1.137 billion, a year-over-year increase of 32%, aligning with market expectations [2] - The company has increased its share repurchase plan from $400 million to $700 million, with $330 million repurchased as of August 6, 2024 [2] - Despite revenue growth, profit margins were impacted by increased costs associated with business expansion and the Oriental Selection segment [2][6] Revenue Summary - For FY2024, the company achieved total revenue of $4.314 billion, a 44% year-over-year increase, returning to pre-regulatory reduction levels [6] - The revenue breakdown shows significant growth in various segments, including a 50% increase in new educational services [2][6] Profitability Summary - The gross profit for FY2024 was $2.263 billion, with a gross margin of 52%, slightly down from the previous year [6] - Operating profit for FY2024 was $350 million, reflecting an 84.4% year-over-year increase, while Non-GAAP operating profit was $473 million, up 69% [6][9] Expense Summary - Sales expenses for FY2024 totaled $661 million, a 49% increase year-over-year, with a sales expense ratio of 15% [6] - Management expenses reached $1.252 billion, a 31% increase year-over-year, with a management expense ratio of 29% [6] Future Outlook - The company expects FY2025Q1 revenue (excluding Oriental Selection self-operated products and live commerce) to be between $1.255 billion and $1.284 billion, representing a year-over-year growth of 31% to 34% [5] - The company anticipates FY2025 education business revenue of $4.134 billion, a 30% year-over-year increase, with Non-GAAP operating profit projected at $843 million [7][8] Market Performance - As of August 7, 2024, the company's stock price was HKD 55.80, with a 52-week range of HKD 38.85 to HKD 77.05 [4] - The company has shown a 24.6% increase over the past 12 months, outperforming the Hang Seng Index, which declined by 13.6% [4]

Investment Rating - The report maintains a "Buy" rating for New Oriental with a target price of $90.0, representing a potential upside of 50.4% from the current price of $59.9 [1]. Core Insights - The education business continues to grow despite short-term profit margin fluctuations, with a significant increase in the number of schools and learning centers, reaching 1,025, up by 114 from the previous quarter [1]. - The company expects net revenue for FY25Q1 to be between $1.25 billion and $1.28 billion, reflecting a year-over-year growth of 31% to 34% [1]. - The deferred revenue balance stands at $1.78 billion, up 33.1% quarter-over-quarter, aligning with revenue growth expectations [1]. Financial Overview - For FY24Q4, total revenue was $113.7 million, a year-over-year increase of 32.1%, slightly above the company's guidance [1]. - Non-GAAP operating profit for FY24Q4 was $36.32 million, a year-over-year increase of 53.8% [1]. - The company reported a gross margin of 52.3%, down 2.2 percentage points year-over-year, primarily due to increased investments in expansion and employee compensation [1][2]. Business Expansion - The overseas exam preparation and study abroad consulting businesses grew by 17.7% and 17.3% year-over-year, respectively [1]. - Non-academic tutoring business registrations increased by 39.1% year-over-year, contributing to an overall revenue growth of 50.3% in new business segments for Q4 [1]. Future Projections - Revenue projections for the next fiscal years indicate continued growth, with expected revenues of $5.02 billion in 2025 and $5.84 billion in 2026, reflecting year-over-year growth rates of 16.3% and 16.5%, respectively [2][3]. - The company anticipates maintaining a strong cash position with total cash, short-term investments, and deposits amounting to $4.94 billion [1].

Core Viewpoint - New Oriental Education & Technology Group Inc. has announced an increase in its share repurchase program from US$400 million to US$700 million, extending the program through May 31, 2025 [1][2]. Group 1: Share Repurchase Program - The initial share repurchase program authorized the company to repurchase up to US$400 million of its ADSs and/or common shares from July 28, 2022, to May 31, 2023 [1]. - The program has been extended for an additional two years, now effective through May 31, 2025 [1]. - As of the announcement date, the company had repurchased approximately US$330.3 million worth of its ADSs under the original program [1]. - The new aggregate value for the share repurchase program is now set at US$700 million [2]. - Repurchases may occur through various means, including open market transactions and block trades, depending on market conditions [2]. Group 2: Company Overview - New Oriental is a provider of private educational services in China, offering a diverse range of educational programs, services, and products [3]. - The company's offerings include educational services, test preparation courses, overseas study consulting, and livestreaming e-commerce [3]. - New Oriental is listed on both NYSE (NYSE: EDU) and SEHK (9901.SEHK), with its ADSs representing ten common shares [3].

Investment Rating - The report maintains a "Buy" rating for New Oriental-S (09901) with a target price indicating an expected return of over 20% within the next six months [5][10]. Core Views - The company reported a revenue increase of 32.1% year-on-year for FY24Q4, reaching $1.14 billion, driven by strong growth in overseas exam preparation and new educational services [1][2]. - Despite a decrease in Non-GAAP net profit by 40.5% in FY24Q4, the overall annual performance showed a significant increase in revenue and net profit, indicating robust long-term growth potential [1][4]. - The company plans to expand its network by 20-25% in FY25, reflecting strong demand in the education sector and expected rapid growth in performance as new centers become operational [2][4]. Summary by Sections Financial Performance - FY24Q4 revenue was $1.14 billion, up 32.1% year-on-year, with significant contributions from overseas exam preparation (up 17.7%) and new educational services (up 50.3%) [1]. - For the full FY24, total revenue reached $4.31 billion, a 43.9% increase, with Non-GAAP net profit growing by 74.6% to $310 million [1][4]. Business Expansion - As of May, the total number of schools and learning centers reached 1,025, with a net increase of 114 centers in Q4, marking a 37% year-on-year growth [2]. - The company anticipates a revenue of $12.5-12.8 billion for FY25Q1, representing a year-on-year growth of 31-34% [1][4]. Strategic Outlook - The report highlights that the short-term impact from the performance of Dongfang Zhenxuan and the integration of tourism business will stabilize, allowing for improved profitability in the future [3][4]. - The tourism business is expected to contribute significantly to revenue, with projections of $1.2 billion in FY25 and potential breakeven by FY26 [3].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company's core education business is stable, and capacity expansion provides long-term growth momentum [1] - For FY2024 Q4, the company achieved net revenue of $1.137 billion, a year-over-year increase of 32.1%, exceeding previous guidance [1] - The company aims for a year-over-year increase of 20-25% in teaching point capacity for FY2025 [1] - The new business lines, including live e-commerce and cultural tourism, are expected to contribute significantly to revenue growth [1][2] Financial Performance - FY2024 total net revenue reached $4.314 billion, a year-over-year increase of 43.9% [3] - Non-GAAP net profit for FY2024 was $378 million, up 47.2% year-over-year [1][3] - The company expects FY2025 Q1 revenue to increase by 31-34% to between $1.255 billion and $1.284 billion [2] Business Segments - Traditional education business segments such as study abroad exam preparation and adult education showed growth rates of 17.7%, 17.3%, and 16.4% respectively [1] - The new education business saw a revenue increase of 50.3%, with active paid users for smart learning systems reaching 188,000, a year-over-year increase of 89.9% [1] Financial Projections - The company projects Non-GAAP net profits of $534 million, $710 million, and $930 million for FY2025, FY2026, and FY2027 respectively, representing year-over-year growth rates of 40.1%, 33.0%, and 30.9% [2][3] - The report indicates a projected revenue growth rate of 24.8% for FY2025 [3] Market Position - The company operates 1,025 schools and learning centers as of May 31, 2024, reflecting a quarter-over-quarter increase of 12.51% and a year-over-year increase of 37.03% [1] - The total market capitalization is approximately HKD 78.45 billion [4]

Investment Rating - The report maintains a "Buy" rating for New Oriental-S (09901.HK) [1] Core Views - New Oriental's FY24Q4 revenue grew by 32.1% year-on-year to $1.14 billion, exceeding performance guidance for four consecutive quarters. The company expects a revenue growth rate of 31% to 34% for FY25Q1, excluding the impact of Dongfang Zhenxuan [6][10] - The education business is experiencing comprehensive growth, with significant progress in study tours and cultural tourism. The overseas exam preparation business saw a 17.7% increase in revenue, while the study abroad consulting business grew by 17.3% [10][14] - The company is accelerating its network expansion, with a total of 1,025 schools and learning centers as of May 31, 2024, and plans to increase the number of outlets by 20% to 25% in FY25 [17][19] Summary by Sections Revenue Growth and Margin Pressure - New Oriental's FY24Q4 revenue reached $1.14 billion, with a gross profit of $590 million, although the gross margin declined by 2 percentage points to 52.3%. Non-GAAP operating profit fell by 54% to $40 million, with a non-GAAP operating margin down by 6 percentage points to 3.2% [10][27] - The company anticipates that the pressure on education business margins will ease, projecting a 2 percentage point increase in operating margin for FY25Q1 [10][27] Market Demand and Network Expansion - The demand in the market remains strong, with the number of new outlets increasing significantly. In FY24, the company opened 277 new outlets, compared to 68 in FY23, and plans to continue this trend [17][19] - Non-academic training business registrations increased by 39% year-on-year, indicating improved utilization rates across outlets [19] Impact of Dongfang Zhenxuan's Subsidiary - The subsidiary "Yuhui Tongxing" is expected to have a limited impact on New Oriental, contributing approximately 2% to revenue and 3% to net profit for FY24 [7][24] - The subsidiary's GMV is estimated to account for about 22% of Dongfang Zhenxuan's total GMV [24] Earnings Forecast and Valuation - The core valuation and market potential of New Oriental primarily depend on its education business. The report adjusts the FY25-26 non-GAAP net profit estimates to $500 million and $610 million, respectively, with a projected net profit of $720 million for FY27 [27] - The current stock price corresponds to a PE ratio of 20, 16, and 14 times for FY25-27 non-GAAP net profits [27]

Investment Rating - The report maintains a "Buy" rating for New Oriental-S (9901.HK) [2][3] Core Views - The report highlights short-term profit disturbances but remains optimistic about the healthy development of the education and training business [2] - For FY2024 Q4, the company achieved a net revenue of $1.137 billion, a year-on-year increase of 32%, while the net profit attributable to the parent company was $27 million, a decrease of 7% [2] - The report anticipates a revenue guidance for FY2025 Q1 in the range of $1.255 to $1.284 billion, representing a year-on-year growth of 31-34% [2] - The company is expected to maintain a robust growth trajectory in its education and training business, with a projected revenue growth rate of 22% over the next three years [2] Financial Summary - FY2024 net revenue was $4.314 billion, with a year-on-year growth of 44% and a Non-GAAP net profit of $381 million, reflecting a 47% increase [2][3] - The company plans to expand its offline teaching points by 20-25% in FY2025, with a total of 1,025 teaching points as of May 31, 2024, a 37% increase year-on-year [2] - The report projects FY2025-2027 revenues of $5.302 billion, $6.560 billion, and $7.864 billion, respectively, with a compound annual growth rate of 22% [2][3] - Non-GAAP net profits for FY2025, FY2026, and FY2027 are expected to be $577 million, $754 million, and $948 million, respectively, with a compound annual growth rate of 36% [2][3]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 59.20 [6][10] Core Insights - The company reported revenue of USD 1.137 billion for FY24Q4, representing a year-over-year increase of 32.1%. Non-GAAP operating profit was USD 36.32 million, down 53.8% year-over-year [3] - Revenue growth is driven by a stable regulatory environment in the education sector, benefiting leading compliant institutions. Key business segments such as overseas exams, consulting, domestic test preparation, and new educational services grew by 17.7%, 17.3%, 16.4%, and 50.3% respectively [3] - The company expanded its number of schools and learning centers to 1,025, a 37% year-over-year increase, with expectations for continued growth in FY25 [3] - Non-GAAP operating profit margin for FY24Q4 was 3.2%, down 5.9 percentage points year-over-year, primarily due to accelerated expansion and high investments in cultural tourism [3] - The company projects net revenue for FY25Q1 to be between USD 1.25 billion and USD 1.28 billion, reflecting a year-over-year growth of 31% to 34% [3] Financial Forecast and Valuation - The revenue forecast for FY24-26 has been adjusted to USD 4.31 billion, USD 5.32 billion, and USD 6.26 billion respectively, with adjusted net profit estimates of USD 381 million, USD 561 million, and USD 719 million [4][10] - The valuation for the group business is based on a comparable company valuation method, assigning a PE ratio of 22x for FY25, leading to a market capitalization estimate of HKD 91.59 billion [4][10]