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]

New Oriental Announces Results for the First Fiscal Quarter Ended August 31, 2024 BEIJING, Oct. 23, 2024 /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 first fiscal quarter ended August 31, 2024, which is the first quarter of New Oriental's fiscal year 2025. Financial Highlights for the First Fiscal Quarter Ended August 31, 2024 ...

Financial Performance - For the first quarter of fiscal year 2025, net revenue increased by 30.5% year-over-year to $1,435.4 million, while net revenue excluding the revenue from self-operated products and live e-commerce business rose by 33.5% to $1,278.2 million[3]. - Operating profit for the first quarter of fiscal year 2025 rose by 42.9% year-over-year to $293.2 million, and operating profit excluding losses from self-operated products and live e-commerce business increased by 58.4% to $303.1 million[3]. - Net profit attributable to New Oriental shareholders increased by 48.4% year-over-year to $245.4 million[3]. - Basic earnings per ADS increased by 48.6% year-over-year to $1.49, while diluted earnings per ADS rose by 49.6% to $1.48[3]. - Non-GAAP net profit attributable to New Oriental increased by 39.8% year-over-year to $264.7 million[3]. - The operating profit for the quarter was $293.2 million, representing a year-over-year increase of 42.9%[9]. - The GAAP operating profit margin was 23.7%, an increase of 370 basis points year-over-year[8]. - Non-GAAP operating profit margin was 24.4%, up 220 basis points compared to the previous year[8]. - The company reported a non-GAAP net profit of $264,732 for the three months ended August 31, 2024, compared to $189,318 in the same period of 2023[25]. Business Growth - The total number of schools and learning centers reached 1,089, an increase of 64 from 1,025 as of May 31, 2024, and an increase of 296 from 793 as of August 31, 2023[5]. - The overseas exam preparation and consultation businesses grew approximately 18.8% and 20.7% year-over-year, respectively[5]. - Domestic exam preparation business for adults and college students recorded a year-over-year growth of approximately 30.4%[5]. - New educational businesses maintained strong growth momentum with a year-over-year revenue increase of 49.8%[5]. - Active paying users for the smart learning system and equipment reached approximately 323,000 in about 60 cities during the quarter[5]. Cash Flow and Assets - The company achieved a net operating cash flow of approximately $183.2 million for the quarter[12]. - Cash and cash equivalents, along with time deposits and short-term investments, totaled approximately $4.9 billion at the end of the quarter[8]. - As of August 31, 2024, total assets amounted to $7,709,118 thousand, an increase from $7,531,673 thousand as of May 31, 2024[22]. - Total liabilities decreased slightly to $3,470,179 thousand from $3,482,659 thousand[23]. - Cash and cash equivalents were reported at $1,146,959 thousand, down from $1,389,359 thousand[22]. - The company’s total equity increased to $4,238,939 thousand from $4,049,014 thousand[23]. - The current assets totalled $5,491,293 thousand, compared to $5,388,878 thousand previously[22]. - The company experienced a decline in cash and cash equivalents, with a net change of $(237,953) for the three months ended August 31, 2024[28]. Future Outlook - New Oriental plans to achieve net revenue between $851.4 million and $871.8 million for the second quarter of fiscal year 2025, reflecting a year-over-year growth rate of 25% to 28%[14]. - The company has authorized a share repurchase plan of up to $700 million, extended until May 31, 2025, with approximately 9.8 million ADS repurchased for about $457.9 million as of October 22, 2024[6]. - Future outlook includes managing the expansion of the school network effectively while navigating regulatory uncertainties in the private education sector in China[19]. Financial Metrics and Reporting - The company reported a net income excluding stock-based compensation and investment fair value changes, providing a clearer view of operational performance[20]. - Deferred revenue stood at $1,733,126 thousand, a decrease from $1,780,063 thousand[23]. - The company emphasized the importance of Non-GAAP financial metrics for assessing performance and liquidity[20].

Investment Rating - The report maintains a "Buy" rating for New Oriental [5][11]. Core Views - New Oriental's revenue for the first quarter of FY25 is expected to reach USD 1.462 billion, representing a year-on-year increase of 32.9%, with a non-GAAP net profit of USD 277 million, up 46.4% year-on-year [4][7]. - The strong growth in the education business is driven by the rapid expansion of non-academic training, overseas study test preparation, and high school subject training [8][9]. - The company is expected to open over 50 new learning centers in FY25, increasing the total to over 1,075, a growth of approximately 35.6% year-on-year [9][11]. - The e-commerce segment is projected to contribute about USD 220 million in revenue for the first quarter, accounting for 15% of total revenue, which is a decrease from 19% in the previous quarter [10][11]. Financial Data and Profit Forecast - Revenue projections for New Oriental are as follows: - FY23: USD 2.998 billion - FY24: USD 4.314 billion - FY25: USD 5.438 billion - FY26: USD 6.916 billion - FY27: USD 8.844 billion - Non-GAAP net profit forecasts are: - FY25: USD 493 million - FY26: USD 672 million - FY27: USD 891 million [6][13]. - The report anticipates a non-GAAP operating profit margin of 24.3% for the education business in FY25, an increase of 2 percentage points year-on-year [11][12].

Investment Rating - The report maintains a **Buy** rating for New Oriental Education & Technology Group (9901 HK) with a target price of **HKD 80.00**, implying a potential upside of **25.2%** [2][4] Core Views - New Oriental continues to maintain its leading position in international education, with steady expansion in its education business [2] - The company's education business is expected to achieve a **24% CAGR** in revenue from FY2024 to FY2027, driven by ongoing margin optimization [2] - The offline teaching center expansion is progressing well, with a **6% QoQ increase** in Q1 FY2025, adding **60+ new centers**, primarily in Tier 1 and New Tier 1 cities [2][5] - The education business is valued at **20x P/E** for the 12 months ending February 2026, excluding contributions from Dongfang Zhenxuan [2] Financial Performance and Forecasts Q1 FY2025 Preview - Total revenue is expected to grow **33% YoY** to **USD 1.46 billion**, in line with the company's guidance of **31-34%** [3] - Non-Dongfang Zhenxuan revenue is projected to increase **33% YoY** to **USD 1.247 billion** [3] - Adjusted operating profit is estimated at **USD 320 million**, with an operating margin of **21.9%**, driven by a **2 percentage point improvement** in non-Dongfang Zhenxuan business margins [3] - Adjusted net profit is forecasted at **USD 259 million**, with a net margin of **17.7%** [3] Segment Performance - Overseas test preparation revenue is expected to grow **21% YoY**, high school revenue **27%**, university/adult education **26%**, and new businesses **52%** [3] - Gross margin is projected to improve to **58%**, up **2.5 percentage points** from the previous forecast [4] Long-Term Forecasts - Revenue is expected to grow from **USD 4.314 billion** in FY2024 to **USD 7.646 billion** in FY2027, with a **24% CAGR** [6] - Adjusted operating profit is forecasted to increase from **USD 473 million** in FY2024 to **USD 1.196 billion** in FY2027 [6] - Adjusted net profit is projected to rise from **USD 381 million** in FY2024 to **USD 1.043 billion** in FY2027 [6] Industry and Peer Comparison - The report covers multiple companies in the internet and education sectors, with **Buy** ratings for peers like TAL Education (TAL US) and Gaotu Techedu (GOTU US) [8] - New Oriental's valuation and growth prospects are highlighted as favorable compared to its peers in the education sector [8]