Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's core business revenue meets expectations, and there is optimism regarding long-term profit margin improvement [1][4] - The company has achieved revenue targets for nine consecutive quarters, with strong growth in new educational businesses and rapid growth in cultural tourism [2][16] - Profit margins are under temporary pressure, but there is confidence in gradual improvement as new outlets become more profitable [3][24] Revenue Performance - For FY2025Q1, total revenue increased by 30.5% year-on-year to $1.44 billion, with core business revenue excluding certain segments growing by 33.5% to $1.28 billion, aligning with performance guidance [12][13] - The company expects FY25Q2 revenue to be between $850 million and $870 million, representing a year-on-year growth of 25% to 28% [12][13] - Specific business segments showed notable growth: overseas exam preparation and consulting grew by 18.8% and 20.7% respectively, while new educational business revenue surged by 49.8% [16] Profitability Analysis - FY2025Q1 gross margin decreased by 1 percentage point to 59%, and Non-GAAP operating margin also fell by 1 percentage point to 21%, primarily due to investments in cultural tourism and the impact of new business segments [3][24] - The company anticipates that profit margins will improve as the utilization rate of new outlets increases [3][24] Financial Forecasts - The report adjusts the company's FY2025-2026 Non-GAAP net profit estimates from $500 million and $610 million to $490 million and $600 million respectively, while maintaining the FY2027 estimate at $720 million [4][27] - Current stock price corresponds to FY2025-2027 P/E ratios of 22, 17, and 15 based on Non-GAAP net profit [4][27] Shareholder Returns - The company emphasizes shareholder returns, having initiated a stock buyback program with an increased total value of up to $700 million, with approximately $457.9 million already spent on repurchasing shares [27]

Investment Rating - The report assigns an "Accumulate" rating to the company [2][10]. Core Views - The company shows resilience in new business growth despite concerns over revenue deceleration due to a low base. Profit margins are expected to gradually recover in Q3 and Q4 as the pace of capacity expansion slows [1][2]. Summary by Sections Financial Performance - For FY25Q1, the company reported revenue of $1.435 billion, a 30.5% increase year-over-year. The education segment generated $1.278 billion, up 33.5%, aligning with market expectations [2]. - Non-GAAP operating profit was $300 million, reflecting a 23% increase, with a profit margin of 20.9%, down 1.3 percentage points. The education segment's operating profit was $303 million, up 58.4%, with a profit margin of 24%, an increase of 2 percentage points [2]. - Non-GAAP net profit reached $265 million, a 40% increase, with a profit margin of 18.4%, up 1.2 percentage points [2]. Business Segments - The growth rates for various business segments in FY25Q1 were as follows: exam preparation +19%, consulting +21%, domestic university training +30%, and new businesses +50%. Concerns arose from a slight downward adjustment in the growth rates of high-end study abroad services and high school 1v1 tutoring [2]. - The company maintains its expectation of a 30% revenue growth rate and a 1 percentage point increase in profit margin for the education segment for the full year [2]. Future Outlook - The company plans to expand its network with a capacity growth target of 20-25% for the year. The pace of new store openings is expected to stabilize, which should lead to a gradual recovery in profit margins in Q3 and Q4 [2]. - The guidance for FY25Q2 indicates education segment revenue between $851 million and $872 million, representing a year-over-year growth of 25-28%, which is below the market's expectation of 30% [2].

Investment Rating - The investment rating for the company is "Buy" with a target price of 47.5 HKD, maintaining the rating for the next six months [1]. Core Insights - The company reported a revenue of 1.44 billion USD for FY25Q1, representing a 31% year-on-year increase. Excluding the revenue from Dongfang Zhenxuan's self-operated products and live e-commerce, the revenue growth was 34% [1]. - The company achieved a net profit of 250 million USD, up 48% year-on-year, with a Non-GAAP net profit of 260 million USD, reflecting a 40% increase [1][2]. - The company continues to focus on enhancing service quality and operational efficiency to improve profitability while balancing growth and sustainability [1]. Financial Performance - The operating profit for the quarter was 290 million USD, a 43% increase year-on-year, with a Non-GAAP operating profit of 300 million USD, up 23% [1]. - The company reported a GAAP operating profit margin of 23.7%, an increase of 370 basis points year-on-year, while the Non-GAAP operating profit margin was 24.4%, up 220 basis points [2]. - The company generated a net operating cash flow of 183.2 million USD for the quarter, with total cash and cash equivalents amounting to approximately 4.9 billion USD at the end of the quarter [2]. Growth Projections - The company maintains its revenue forecasts for FY25-27, expecting revenues of 5.2 billion, 6.4 billion, and 7.5 billion USD respectively, with adjusted net profits of 560 million, 770 million, and 1.06 billion USD for the same periods [2].

Investment Rating - The report maintains a "Buy" rating for the company [4] Core Views - The company's Q1 FY2025 financial results show a net revenue of $1.435 billion, representing a year-over-year increase of 30.5%, which aligns with market expectations [1] - The traditional education business continues to perform well, with significant growth in various segments, while the new business lines, including live commerce and cultural tourism, are also showing strong revenue growth [1][2] - The company expects a slight pressure on profit margins in Q2 due to seasonal factors, but anticipates continued growth in the education sector [2] Financial Performance Summary - For FY2025 Q1, the company achieved a Non-GAAP operating profit of $300 million, a year-over-year increase of 22.6%, and a Non-GAAP net profit of $265 million, up 39.8% [1] - The gross margin for FY2025 Q1 was 59.35%, with an operating profit margin of 20.4%, reflecting improvements in learning center utilization and cost reduction measures [2] - Deferred revenue reached $1.733 billion, indicating strong cash flow and future revenue assurance [2] Business Segment Performance - The total number of schools and learning centers increased to 1,089, a quarter-over-quarter growth of 6.24% and a year-over-year growth of 37.33% [1] - The traditional education business segments, including high school and study abroad training, saw growth rates of over 20%, while the new education business grew by 49.8% [1] - The cultural tourism business reported revenues of nearly $90 million for FY2025 Q1, a year-over-year increase of 221% [1] Financial Projections - The company projects FY2025 net revenue (excluding a specific segment) to grow by 25% to 28%, reaching between $851 million and $872 million [2] - Non-GAAP net profit forecasts for FY2025 to FY2027 are $515 million, $689 million, and $904 million, representing year-over-year growth rates of 35.2%, 33.6%, and 31.3% respectively [2][3]

Investment Rating - The report maintains a "Buy" rating for New Oriental-S (9901.HK) [1] Core Views - The company reported a total revenue of $1.435 billion for Q1 FY2025, representing a year-over-year increase of 30.5%, with a net profit of $245 million, up 48.4% year-over-year [1] - Non-GAAP operating profit for Q1 was $300 million, reflecting a year-over-year growth of 22.6% [1] - The non-selective business revenue grew by 33.5% year-over-year, indicating strong performance in new business segments [1] - The company expects Q2 non-selective business revenue to increase by 25-28% year-over-year, aligning with previous expectations [1] - The company has a robust expansion plan, with a target of increasing offline teaching points by 20-25% throughout the year [1] - The report forecasts non-selective business revenues for FY2025-2027 to be $4.416 billion, $5.536 billion, and $6.697 billion respectively, with Non-GAAP operating profits of $539 million, $731 million, and $938 million [1] Summary by Sections Financial Performance - Q1 FY2025 total revenue: $1.435 billion, up 30.5% YoY - Net profit: $245 million, up 48.4% YoY - Non-GAAP operating profit: $300 million, up 22.6% YoY [1] Business Segments - Non-selective business revenue: $1.278 billion, up 33.5% YoY - Growth in new business segments, particularly non-academic courses and intelligent learning systems [1] Future Outlook - Q2 revenue guidance for non-selective business: $851.4 million to $871.8 million, up 25-28% YoY - Continued growth expected in new business segments and stable performance in core education services [1] Expansion Strategy - Offline teaching points increased to 1,089, with a quarterly growth of 6% - National network advantages are strengthening with significant presence in major cities [1] Earnings Forecast - Projected adjusted EPS for FY2025-2027: $0.34, $0.44, and $0.55 respectively - Corresponding P/E ratios: 18x, 14x, and 11x [2][5]

Investment Rating - The investment rating for the company is "Outperform the Market" [4][12]. Core Views - The company's education business performance is in line with expectations, with operational efficiency continuously improving. In FY2025Q1, education revenue increased by 34%, and net revenue reached $1.435 billion, up 30.5% year-on-year. Excluding the impact of Dongfang Zhenxuan, net revenue was $1.278 billion, up 33.5% year-on-year, aligning with the revenue guidance for FY2024Q4 [1][5]. - The company maintains a full-year capacity expansion expectation of 20-25%, with the number of schools and learning centers reaching 1,089, a 37% year-on-year increase [1][5]. - The company anticipates FY2025Q2 education revenue to grow by 25-28%, driven by strong growth in new education businesses and domestic university student training [1][5]. Summary by Relevant Sections Financial Performance - In FY2025Q1, Non-GAAP operating profit was $300 million, up 22.6% year-on-year, with a Non-GAAP operating profit margin of 20.9%. Excluding the impact of Dongfang Zhenxuan, the operating profit margin was 24%, up 2.2 percentage points year-on-year [1][5]. - Non-GAAP net profit attributable to the parent company was $265 million, up 39.85% year-on-year, exceeding Bloomberg consensus expectations [1][5]. Business Segments - The new education business showed strong growth, with overseas examination preparation and consulting businesses growing by 18.8% and 20.7% year-on-year, respectively. Domestic university training business revenue increased by approximately 30% year-on-year, while high school training revenue grew by about 21% year-on-year [1][5]. - The new education business revenue increased by 49.8% year-on-year, driven by non-academic training and learning machine subscriptions, which reached 323,000 users, up 78.5% year-on-year [1][5]. Future Outlook - The company projects FY2025-2027 revenue forecasts of $5.113 billion, $6.414 billion, and $7.893 billion, respectively, with Non-GAAP net profits of $528 million, $796 million, and $1.096 billion, respectively [2][5]. - The overall education industry remains in a high-growth phase, with a persistent supply-demand imbalance for quality offerings, supporting the company's upward profit margin trajectory [2][5].

Investment Rating - The report maintains a "Buy" rating for New Oriental Education Technology (9901 HK) with a target price of HKD 80.00, indicating a potential upside of 59.8% from the current price of HKD 50.05 [1][4]. Core Insights - The core education business remains robust, with a revenue of USD 1.44 billion for Q1 FY2025, reflecting a year-on-year growth of 30.5%. Excluding Dongfang Zhenxuan, revenue grew by 33.5% [1]. - Adjusted operating profit reached USD 300 million, a 23% increase year-on-year, with an adjusted operating margin of 21% [1]. - The company is expected to maintain a revenue growth of 30% for the fiscal year 2025, with an operating profit margin of 13% [2]. Summary by Sections Financial Performance - For FY2025, revenue is projected to reach USD 5.235 billion, with a year-on-year growth of 21.4% [3]. - Net profit is expected to be USD 563 million, with an EPS of USD 3.40, reflecting a growth of 49% year-on-year [3]. - The company’s P/E ratio is projected to be 1.9 for FY2025, indicating attractive valuation [3]. Business Segments - Traditional business segments such as study abroad preparation and consulting showed year-on-year revenue growth of 18.8% and 20.7% respectively, contributing approximately 50% to total revenue [1]. - New business segments experienced a 50% year-on-year revenue increase, contributing about 24% to total revenue [1]. - The number of teaching points increased to 1,089 as of August 31, 2024, with a management target of 20-25% expansion for FY2025 [1]. Market Outlook - The report suggests that New Oriental remains a leading player in the education training industry, with opportunities to adjust its product structure in response to market demand [2]. - The company is expected to benefit from scale effects due to last year's expansion of teaching points, which will enhance profitability [1].

Investment Rating - The report maintains a "Buy" rating for New Oriental Education & Technology Group (09901) [1][3] Core Insights - The company reported a strong revenue growth of 30.5% year-on-year for Q1 FY25, reaching USD 1.435 billion, driven primarily by its non-academic training business [2][3] - Non-GAAP net profit for the same period was USD 265 million, reflecting a year-on-year increase of 39.8% [2][3] - The company’s new business segment, which includes non-academic training, saw a revenue increase of 50% year-on-year, contributing USD 350 million [2][3] - The number of users for learning machines grew by 78.5% year-on-year, reaching 323,000 [2][3] - The total number of teaching points increased by 37.3% year-on-year to 1,089, indicating a robust demand for training services [2][3] Financial Data and Profit Forecast - Revenue projections for FY25 are estimated at USD 5.438 billion, with a year-on-year growth rate of 43.89% [3][5] - Non-GAAP net profit is forecasted to be USD 493 million for FY25, with a growth rate of 47.20% [3][5] - The report anticipates continued growth in the non-academic training sector, with a projected training participant count of 3.82 million for FY25, compared to 12 million prior to the "double reduction" policy [2][3] - The target price is set at USD 109.5, indicating a potential upside of 63.1% from the current price [3][5] Key Performance Indicators - The report highlights a projected EPS of USD 2.98 for FY25, increasing to USD 5.38 by FY27 [3][8] - The net asset return rate is expected to rise from 6.17% in FY23 to 14.22% in FY27 [3][8] - The gross margin is projected to improve from 52.98% in FY25 to 57.29% in FY27 [3][8]

Investment Rating - The report maintains a "BUY" rating for New Oriental, with a target price of US$87.00, down from the previous target of US$95.00, indicating a potential upside of 29.6% from the current price of US$67.13 [4][2]. Core Insights - New Oriental reported a net revenue growth of 30.5% YoY to US$1,435 million in 1QFY25, aligning with estimates. Non-GAAP net income increased by 39.8% YoY to US$265 million, driven by improved operating margins in core educational services [2]. - The company anticipates a revenue growth of 25-28% YoY for 2QFY25, with expectations of reaccelerated growth in 3Q and 4Q, maintaining a full-year growth outlook of approximately 30% YoY for FY25 [2]. - The report highlights strong performance in core educational businesses, with overseas-related revenue up 19% YoY and new educational initiatives growing by 50% YoY in 1QFY25 [2]. - The tourism business showed significant growth, with a 221% YoY increase in revenue from study tours and research camps for K12 and university students [2]. Financial Summary - For FY25E, total revenue is projected at US$5,216 million, with adjusted net profit expected to reach US$516.9 million. The adjusted EPS is forecasted at US$3.12 [3][11]. - The report indicates a gross margin of 54.3% and an operating margin of 9.7% for FY25E, with expectations for gradual improvement in profitability metrics over the following years [6][14]. - The company’s total assets are projected to grow from US$7,532 million in FY24 to US$10,634 million by FY27, reflecting a strong balance sheet position [12]. Valuation Methodology - The valuation employs a sum-of-the-parts (SOTP) approach, attributing US$83.4 million to the educational and consulting business, US$1.0 million to East Buy, and US$2.6 million to tourism and other ventures [8][9]. - The educational and consulting segment is valued at a premium PE of 27x FY25E, reflecting New Oriental's leadership in the educational services market in China [8].

Financial Data and Key Metrics - Total net revenues increased by 30.5% YoY, with core educational business revenues (excluding East Buy) growing by 33.5% YoY [3] - Operating margin and non-GAAP operating margin reached 23.7% and 24.4%, respectively, representing YoY improvements of 370 basis points and 220 basis points [4] - Net income attributable to New Oriental increased by 48.4% YoY to $245.4 million, with non-GAAP net income up 39.8% YoY to $264.7 million [12] - Net cash flow from operations was $183.2 million, with capital expenditures of $80.2 million [12] - Cash and cash equivalents, term deposits, and short-term investments totaled approximately $4.9 billion [9] Business Line Performance - Overseas test prep business revenue increased by 19% YoY, while overseas study consulting business revenue grew by 21% YoY [5] - Adults and university students business revenue increased by 30% YoY [5] - Non-academic tutoring courses recorded approximately 484,000 student enrollments, with the top 10 cities contributing over 60% of revenue [6] - Intelligent learning system and device business reported 323,000 active paid users, with the top 10 cities contributing around 55% of revenue [6] - New educational business initiatives grew by 50% YoY [6] - Tourism-related business, including study tours and research camps, saw revenue growth of 221% YoY, with operations in over 55 cities [7] Market and Strategic Direction - The company invested $24.6 million in its OMO teaching platform to enhance service flexibility [8] - East Buy expanded its product offerings to 488 SKUs and diversified its sales channels, including Tmall, JD, Pinduoduo, and Xiaohongshu [8][9] - The company plans to increase capacity by 20% to 25% in FY2025, focusing on cities with strong financial performance [14] - New Oriental is committed to integrating AI and ChatGPT into its educational offerings to improve efficiency and growth [16] Management Commentary - Management expressed confidence in maintaining healthy growth for the core educational business, supported by solid educational resources [14] - The company is cautiously managing capacity expansion and hiring to balance revenue and profitability growth [14] - Management expects steady growth and satisfactory operating profit for the full fiscal year, despite Q2 being a slower season [15] Q&A Session Question: Second quarter guidance and capacity expansion [18] - Management explained that Q2 is typically a slower quarter due to seasonality but expects revenue growth to accelerate in Q3 and Q4, with full-year growth around 30% YoY [19] Question: Capacity expansion and margin improvement [21] - The company plans to increase capacity by 20% to 25% for FY2025, with margin expansion expected for the full year despite minor pressure in Q2 [22] Question: Margin improvement drivers [24] - Margin improvement was driven by positive top-line growth across business lines, increased utilization rates from learning center expansion, and cost control measures [25] Question: Cultural tourism revenue and profitability [27] - Tourism-related business contributed approximately $90 million in Q1, with profitability expected to be loss-making for the full year [29] Question: K-12 new initiatives revenue breakdown [32] - Non-academic tutoring and intelligent learning device businesses grew by over 50% YoY, with similar growth rates for both segments [33] Question: Growth breakdown for Q2 [35] - Overseas-related business is expected to grow over 20%, domestic test prep and university students business over 30%, and new businesses over 50% [35] Question: New business growth clarification [37] - Non-academic tutoring and intelligent learning device businesses grew over 55% YoY, with non-academic tutoring contributing more than half of new educational business revenue [38][39] Question: Second quarter margin pressure [45] - Q2 margin pressure is attributed to seasonality, tourism business losses, and conservative guidance, with expectations of better performance in Q3 and Q4 [46] Question: East Buy revenue and guidance [51] - East Buy's financial results will be detailed in the next quarter, with Q2 guidance excluding East Buy's revenue [52] Question: New business growth and high school business performance [55] - New educational initiatives are expected to grow around 45% to 46% in Q2, with non-academic tutoring and intelligent learning devices growing over 50% [56]