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]

Investment Rating - The report assigns an "Accumulate" rating for New Oriental-S (9901) [2][5]. Core Views - Short-term profit margins are impacted by increased compensation expenses, investments in cultural tourism, and the ramp-up of new stores. However, it is expected that FY25Q1 will stabilize expectations, with a focus on the recovery of the education segment's profit margins [5]. - The company has adjusted its FY2025-2026 and added FY2027 Non-GAAP net profit estimates to $537 million (-9%), $741 million (-5%), and $1,007 million, respectively, with EPS projected at $0.27, $0.39, and $0.54 [5]. - For FY24, the company achieved revenue of $4.314 billion (+44%), gross profit of $2.263 billion (+42%), and a gross margin of 52.45% (-1 percentage point) [5]. - The report highlights that the decline in profit margins is primarily due to accelerated store openings, increased cultural tourism investments, and rising employee compensation [5]. Financial Summary - FY24 revenue was $4.314 billion, with a year-on-year growth of 44%. The gross profit was $2.263 billion, with a gross margin of 52.45% [7]. - FY24Q4 revenue reached $1.137 billion (+32%), aligning with Bloomberg consensus expectations, while gross profit was $594 million (+27%) [5]. - The company’s operating profit for FY24 was $350 million (+84%), with a margin of 8% (+2 percentage points) [5]. - Non-GAAP net profit for FY24 was $381 million (+47%), with a margin of 8.84% [5].

Investment Rating - The report maintains a "Buy" rating for New Oriental [5][13][14] Core Views - New Oriental's revenue for Q4 FY24 was $1.14 billion, a year-on-year increase of 32.1%, while Non-GAAP net profit attributable to the parent company was $37 million, a decrease of 40.5% year-on-year [9][12] - The full-year revenue for FY24 reached $4.31 billion, up 43.9% year-on-year, driven by strong growth in non-academic training and overseas study businesses [5][9] - The company is experiencing robust growth in non-academic training, with Q4 revenue from new business reaching $232 million, a 50% increase year-on-year [10][11] - The number of learning centers increased to 1,025 in Q4, representing a 37% year-on-year growth, indicating strong demand in the market [11][12] - The overseas test preparation and consulting business contributed $284 million in revenue for Q4, a 17.4% increase year-on-year, reflecting the recovery of the overseas study market [12][14] Summary by Sections Financial Performance - Q4 FY24 revenue was $1.14 billion, with a 32.1% year-on-year growth; full-year revenue was $4.31 billion, up 43.9% [5][9] - Non-GAAP net profit for FY24 was $381 million, a 47.2% increase year-on-year [5][9] Business Segments - Non-academic training showed strong growth, with Q4 revenue of $232 million, a 50% increase year-on-year; enrollment in non-academic training reached 875,000, up 39.1% [10][11] - The overseas study business generated $284 million in Q4, a 17.4% increase year-on-year, with annual revenue of $993 million, up 35% [12][14] Expansion and Market Position - The number of learning centers increased to 1,025, a 37% year-on-year growth, with expectations of continued expansion at 20-25% in FY25 [11][12] - The company is well-positioned to capture market share in the non-academic training sector due to its brand and operational experience [10][11]

Investment Rating - Maintains a **Buy** rating with a revised target price of **$95.0** (previously $102.5) [2][3] Core Views - New Oriental's core education business continues to show strong momentum, with FY24 revenue growing 44% YoY to $4.314 billion and non-GAAP net income up 47% YoY to $381.1 million [2] - The company's overseas test preparation and study consulting revenues grew 17.7% and 17.3% YoY, respectively, contributing approximately 11% and 15% of total revenue in 4QFY24 [2] - Domestic test preparation revenue increased 16.4% YoY, accounting for about 4% of total revenue in 4QFY24 [2] - New education initiatives grew 50.3% YoY, contributing approximately 20% of total revenue in 4QFY24 [2] - East Buy's revenue is expected to decline 20% YoY in FY25E to $741 million due to business adjustments [2] Business Performance and Outlook - For 1QFY25E, management guides total revenue growth of 31-34% YoY, reaching $1.255-1.284 billion, with OPM improving by 200 bps YoY [2] - The company expects overseas test preparation, overseas consulting, new education, and high school tutoring revenues to grow 25%, 15%, 50%, and 30% YoY, respectively, in FY25E [2] - Non-GAAP operating margin declined 5.9 percentage points YoY to 3.2% in 4QFY24, primarily due to capacity expansion and increased investments in live-streaming e-commerce [2] - The total number of schools and learning centers increased 37% YoY to 1,025 by the end of 4QFY24 [2] - Management expects capacity to grow 20-25% YoY in FY25E, with most new openings in cities with better unit economics [2] Financial Projections - FY25E revenue is projected at $5.267 billion, with non-GAAP net income of $571.7 million [3] - FY26E revenue is expected to reach $6.258 billion, with non-GAAP net income of $791.4 million [3] - Non-GAAP EPS for FY25E and FY26E is forecasted at $3.45 and $4.78, respectively [3] - Gross margin is expected to improve to 53.6% in FY25E and 54.8% in FY26E [6] - Operating margin is projected to increase to 11.1% in FY25E and 13.3% in FY26E [6] Valuation - The SOTP valuation method is used, with a 10% holdco discount, resulting in a target price of $95.0 per ADS [7] - Education and consulting business is valued at $89.9 (95% of total valuation), based on 30x FY25E PE [7] - East Buy is valued at $1.7 (2% of total valuation), based on 7x FY25E PE [7] - Travel and other businesses are valued at $3.3 (4% of total valuation), based on 15x FY25E PE [7] Industry Comparison - New Oriental's FY25E PE of 24.6x is higher than the education industry average of 22.4x, reflecting its strong leadership in China's education services market [7][9] - The company's FY25E PS of 2.2x is in line with the education industry average [9]

Investment Rating - The report maintains a BUY rating for New Oriental with a target price of US$95.00, down from the previous target of US$102.50, indicating a potential upside of 37.2% from the current price of US$69.25 [2][3]. Core Insights - New Oriental's core educational business has shown strong momentum, with a 32% year-over-year increase in net revenue for 4QFY24, reaching US$1,137 million, aligning with estimates [2]. - Non-GAAP net income for 4QFY24 declined by 41% year-over-year to US$36.9 million, primarily due to accelerated capacity expansion and increased investment in live streaming e-commerce [2]. - For FY24, total revenue and non-GAAP net income grew by 44% and 47% year-over-year, reaching US$4,314 million and US$381 million, respectively [2]. - Management expects total revenue for 1QFY25E to grow by 31-34% year-over-year, projecting a range of US$1,255-1,284 million [2]. Financial Performance Summary - FY23A revenue was US$2,998 million, increasing to US$4,314 million in FY24A, with projections of US$5,267 million for FY25E and US$6,258 million for FY26E [3][11]. - Adjusted net profit rose from US$258.9 million in FY23A to US$381.1 million in FY24A, with forecasts of US$571.7 million for FY25E and US$791.4 million for FY26E [3][11]. - The adjusted EPS is projected to increase from US$2.30 in FY24A to US$3.45 in FY25E and US$4.78 in FY26E [3][11]. Business Segments - The educational business has shown steady recovery, with overseas test prep and study consulting revenues growing by 17.7% and 17.3% year-over-year, respectively, in 4QFY24 [2]. - New educational initiatives reported a revenue increase of 50.3% year-over-year in 4QFY24, contributing approximately 20% to total revenue [2]. - East Buy is undergoing business adjustments, with revenue expected to decline by 20% year-over-year to US$741 million in FY25E due to management changes [2]. Valuation Methodology - The report employs a sum-of-the-parts (SOTP) valuation, estimating the educational and consulting business at US$89.9 per share based on a 30x FY25E PE, reflecting New Oriental's strong market position [8]. - East Buy is valued at US$1.7 per share based on a 7x FY25E PE, while the tourism segment is valued at US$3.3 per share based on a 15x FY25E PE [8].

Financial Data and Key Metrics Changes - The company achieved a solid topline growth of 32.1% for the fiscal quarter, with operating margin and non-GAAP operating margin reaching 0.9% and 3.2% respectively [8][9] - Operating income decreased by 78.1% year-over-year to $10.5 million, while non-GAAP income from operations fell by 53.8% to $36.3 million [18] - Net income attributable to New Oriental was $27 million, a 6.9% decrease year-over-year, with basic and diluted net income per ADS at $0.16 [18][19] - Cash and cash equivalents, term deposits, and short-term investments totaled approximately $4.9 billion [15] Business Line Data and Key Metrics Changes - The overseas test-prep business recorded a revenue increase of 18% in dollar terms, or 23% in RMB terms year-over-year [10] - The overseas study consulting business saw a revenue increase of about 17% in dollar terms, or 23% in RMB terms year-over-year [10] - The adults and university students' business recorded a revenue increase of 16% in dollar terms, or 21% in RMB terms year-over-year [10] - New educational business initiatives reported a revenue increase of 50% in dollar terms, or 57% in RMB terms year-over-year [12] Market Data and Key Metrics Changes - Deferred revenue at the end of the fourth quarter was $1,780.1 million, an increase of 33.1% compared to the previous year [20] - The company plans to increase capacity by around 20% to 25% for fiscal year 2025, focusing on cities with better topline and bottom line performance [22] Company Strategy and Development Direction - The company is pivoting to expand its multi-pronged presence and will leverage East Buy for knowledge sharing and product dissemination [7] - A strategic focus on enhancing the OMO (Online-Merge-Offline) system is underway, with a total investment of $30.5 million in the teaching platform [14] - The company aims to integrate new technologies such as AI and ChatGPT into educational offerings to improve growth and efficiency [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving margin expansion for the educational business in the first quarter of 2025, excluding East Buy [21] - The company anticipates strong demand for its educational services and expects to achieve revenue growth of 31% to 34% in the first quarter of fiscal year 2025 [22] - Management noted that the regulatory environment is expected to stabilize, allowing for more predictable operations moving forward [55] Other Important Information - The company completed the acquisition of East Buy's online education business for RMB1.5 billion, which will now be recorded under educational services [16] - A share repurchase program was approved, allowing for the repurchase of up to $400 million of the company's ADS or common shares [15] Q&A Session Summary Question: Growth strategy and room for growth in existing locations - Management plans to increase capacity by 20% to 25% in existing cities, focusing on areas with better performance [27] Question: Margin decline analysis - The margin decline was attributed to accelerated learning center expansion, new tourism business investments, and additional incentives for management and staff [30] Question: Margin expansion expectations - Management expects margin expansion in Q1 and throughout the year, driven by operating leverage and strong market demand [36] Question: Enrollment growth versus capacity expansion - The difference in growth rates is partly due to timing, with expectations for revenue growth to cover incremental costs [39] Question: Revenue outlook for different segments - Revenue growth expectations include 20% to 25% for overseas test-prep, 15% for consulting, and 45% to 50% for new business initiatives [44] Question: Competitive landscape and summer enrollment growth - Competition has intensified, but management believes they will capture more market share due to strong demand and less competition compared to previous years [47] Question: Shareholder return and potential for increased buyback - Management is open to discussing further capital allocation to shareholders after completing the current buyback program [49] Question: Revenue contribution from tourism business - Expected revenue for the tourism business in fiscal year 2025 is around RMB1.2 billion, with anticipated losses in the first year of operation [52]