Core Viewpoint - The U.S. stock market saw a collective rise in the three major indices, indicating positive investor sentiment and market performance [1] Group 1: Major Indices Performance - The Nasdaq increased by 0.65% [1] - The Dow Jones rose by 0.48% [1] - The S&P 500 index gained 0.37% [1] Group 2: Notable Stock Movements - Tesla's stock surged over 4% [1] - Intel's shares increased by more than 3% [1] - Google's stock rose by over 2% [1] Group 3: Chinese Concept Stocks - The Nasdaq Golden Dragon China Index saw a slight increase of 0.15% [1] - Futu Holdings experienced a rise of over 4% [1] - New Oriental and Xpeng Motors both fell by more than 3% [1]

Core Insights - New Oriental Education & Technology Group Inc. reported a 6.1% year-over-year revenue increase to $1.52 billion for the first quarter of its fiscal year, with operating profit rising 6% to $310 million, but net profit declined by 1.9% to $240 million, disappointing investors [2][3][4] Financial Performance - Revenue from overseas test preparation and overseas study consulting grew by only 1% and 2% year-over-year, respectively, while domestic exam prep for adults and university students increased by 14.4% and new educational initiatives grew by 15.3% [3][10] - The company’s revenue for the fiscal year through May is projected to reach up to $5.4 billion, with current quarter revenue guidance between $1.13 billion and $1.16 billion, indicating 9% to 12% year-over-year growth [8][13] Market Reaction - Following the profit decline, New Oriental's U.S.-listed shares fell over 9% intraday, closing down 3.4% at $58.56, while Hong Kong shares also dropped [4][5] - Despite the selloff, the stock is trading over 20% higher than its six-month lows, indicating some investor confidence remains [5] Strategic Focus - In light of limited revenue growth potential, the company is prioritizing cost optimization and operational efficiency to improve profits, as stated by CFO Yang Zhihui [11][12] - New Oriental aims to maintain discipline in cost management across all business lines for sustainable growth [12] Growth Challenges - The growth of overseas test preparation and study consulting services has significantly slowed, with expectations of flat revenue for overseas study consulting and only 5% to 10% growth for overseas test preparation in the current fiscal year [9][16] - Ongoing U.S.-China tensions and protectionist policies are creating uncertainty for the overseas study business, which is a major revenue source for New Oriental [9][15] Valuation and Leadership - The current stock price gives New Oriental a forward P/E ratio of 25, reflecting steady operations but lacking immediate growth catalysts [17] - CEO Yu Minhong's leadership is highlighted as a key asset, with a strong track record in navigating regulatory challenges, positioning the company for future opportunities [18]

Company Research: New Oriental (EDU) - Adjusted operating profit margin improved, with Q1 FY26 net revenue at $1.52 billion, up 6.1% year-on-year, slightly exceeding guidance of $1.46 to $1.51 billion[6] - Non-GAAP operating profit reached $336 million, a year-on-year increase of 11.3%, with a Non-GAAP operating profit margin of 22.0%, up 1.0 percentage points[6] - The company plans to return at least 50% of the previous fiscal year's net profit to shareholders, with a total shareholder return plan of $490 million, including $190 million in cash dividends and $300 million in share buybacks[9] Earnings Forecast and Valuation - For FY26Q2, net revenue is expected to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12%[8] - FY26 total net revenue is projected to be between $5.145 billion and $5.39 billion, indicating a growth of 5% to 10%[8] - Target price adjusted to $74.50, maintaining a "Buy" rating, based on a 25x PE for FY26E net profit[10] Company Research: China Shenhua (1088) - For the first three quarters of 2025, revenue was CNY 213.15 billion, down 16.6% year-on-year, with net profit attributable to shareholders at CNY 41.37 billion, a decrease of 13.8%[15] - Coal sales volume decreased by 8.4% to 316.5 million tons, with Q3 revenue at CNY 75.04 billion, down 13.1% year-on-year[16] - Despite challenges, the company maintained a strong cost control, with unit production costs down 3.1% year-on-year[16] Future Outlook and Valuation - Target price set at HKD 47.70, with a "Buy" rating, reflecting a potential upside of 15.1% from the current price[18] - Expected net profit for 2025-2027 is projected at CNY 58.8 billion, CNY 58.7 billion, and CNY 58.9 billion respectively[18] - The company is viewed as a "cash cow" with a generous dividend policy, providing a stable cash return to investors[18]

Core Viewpoint - The company is experiencing a gradual stabilization in its core business, leading to a significant improvement in shareholder returns, with a target price adjustment to $74.5 or HKD 57.9, maintaining a buy rating [1] Performance Overview - For FY26Q1, the company reported a net revenue of $1.52 billion, a year-on-year increase of 6.1%, slightly exceeding previous guidance [1] - Operating profit reached $310 million, up 6% year-on-year, while Non-GAAP operating profit was $336 million, reflecting an 11.3% increase [1] - The net profit attributable to shareholders was $240 million, down 1.9% year-on-year, primarily due to dividend withholding tax and fluctuations in other income [1] - The Non-GAAP net profit attributable to shareholders was $258 million, a decrease of 1.6% year-on-year, with a Non-GAAP operating profit margin of 22.0%, up 1.0 percentage points year-on-year [1] Education Business Performance - In FY26Q1, the overseas exam preparation and study abroad consulting businesses grew by 1.0% and 2.0% year-on-year, respectively, with rapid growth in overseas youth exam training partially offsetting declines in adult exams [2] - The university and adult exam business saw a year-on-year growth of 14.4% [2] - New business revenue increased by 15.3% year-on-year, with non-academic tutoring registrations reaching 530,000, a 9.5% increase [2] - The number of active paying users for smart learning systems and devices reached 452,000 in Q4, a year-on-year increase of 39.9% [2] FY26Q2 and FY26 Outlook - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12% [3] - The net revenue forecast for FY26 remains unchanged, with expected total revenue between $5.145 billion and $5.39 billion, indicating a year-on-year growth of 5% to 10% [3] Shareholder Return Plan - In July 2025, the company approved a three-year shareholder return plan, committing to return no less than 50% of the previous fiscal year's net profit to shareholders starting from FY26 [4] - The announced shareholder return plan for FY26 includes a cash dividend of $190 million (to be paid in two installments) and a $300 million share buyback within the next 12 months, resulting in a total return of approximately $490 million [4]

Core Viewpoint - First Shanghai has given New Oriental-S (09901, EDU.US) a target price of $74.5 / HKD 57.9 based on a 25x PE for FY26E net profit, maintaining a buy rating due to the stabilization of core business and significant shareholder returns [1] Group 1: Performance Overview - For FY26Q1, the company reported a net revenue of $1.52 billion, a year-on-year increase of 6.1%, slightly exceeding previous guidance [2] - Operating profit reached $310 million, up 6% year-on-year, while Non-GAAP operating profit was $336 million, reflecting an 11.3% increase [2] - The net profit attributable to shareholders was $240 million, down 1.9% year-on-year, primarily due to dividend withholding tax and fluctuations in other income [2] Group 2: Education Business Performance - In FY26Q1, the overseas exam preparation and study abroad consulting businesses grew by 1.0% and 2.0% year-on-year, respectively, with youth exam training showing faster growth [3] - The university and adult exam business saw a year-on-year growth of 14.4% [3] - New business revenue increased by 15.3% year-on-year, with non-academic tutoring registrations reaching 530,000, a 9.5% increase [3] - The active paying users for the smart learning system and devices reached 452,000, up 39.9% year-on-year [3] Group 3: FY26Q2 and FY26 Outlook - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12% [4] - For FY26, the total net revenue is projected to be between $5.145 billion and $5.39 billion, with a year-on-year growth of 5% to 10% [4] Group 4: Shareholder Return Plan - In July 2025, the company approved a three-year shareholder return plan, committing to return no less than 50% of the previous fiscal year's net profit to shareholders starting from FY26 [5] - The shareholder return plan includes a cash dividend of $190 million (to be paid in two installments) and a $300 million buyback within the next 12 months, resulting in a total return rate of approximately 5% [5] - The total planned return through dividends and buybacks amounts to $490 million [5]

Investment Rating - The report assigns a "Buy" rating to New Oriental Education Technology (9901 HK) with a target price of HKD 55.00, indicating a potential upside of 19.9% from the current price of HKD 45.88 [4][8][15]. Core Insights - The report highlights that K12 education may accelerate, boosting shareholder returns and enhancing confidence in the company's growth prospects [2]. - Financial forecasts indicate a revenue growth trajectory, with expected revenues of USD 4.9 billion in 2025, growing to USD 6.875 billion by 2028, reflecting a compound annual growth rate (CAGR) of approximately 12% [3][16]. - The net profit is projected to increase from USD 372 million in 2025 to USD 792 million by 2028, with a notable increase in earnings per share (EPS) from USD 0.32 in 2025 to USD 0.45 in 2028 [3][16]. Financial Overview - Revenue (in million USD) is forecasted as follows: - 2024: 4,314 - 2025: 4,900 - 2026E: 5,413 - 2027E: 6,136 - 2028E: 6,875 - Year-on-year growth rates are expected to be 43.9% in 2024, 13.6% in 2025, and gradually declining to 12.0% by 2028 [3][16]. - Net profit (in million USD) projections are: - 2024: 310 - 2025: 372 - 2026E: 428 - 2027E: 481 - 2028E: 792 [3][16]. Valuation - The report employs a Sum-of-the-Parts (SOTP) valuation method, assigning a price-to-earnings (P/E) ratio of 15x for K12 business and 8x for study abroad business, reflecting expected profit growth rates of +25% and -7% respectively [7][8]. - The target price was adjusted upwards to HKD 55.00 from a previous HKD 46.00, maintaining a "Buy" rating based on the strong demand and growth outlook for K12 education services [7][8].

Group 1: New Oriental Education Technology - The company reported a revenue increase of 6% year-on-year to $1.523 billion for Q1 FY2026, exceeding expectations by 1% [1] - Adjusted operating profit was approximately $336 million, with an operating margin of 22%, expanding by 1 percentage point year-on-year [1] - The management maintained the revenue guidance for FY2026, expecting a growth rate of 5-10%, with Q2 revenue growth projected between 9-12% [1][2] - The company announced a cash dividend of $190 million and a share buyback plan of $300 million, which is better than previous expectations [1] Group 2: Howie Group - Howie Group achieved a record high quarterly performance in Q3 2025, with revenue of 7.83 billion yuan, a year-on-year increase of 14.8%, and a net profit of 1.18 billion yuan, up 17.3% [3] - The gross margin for Q3 was 30.3%, reflecting a 0.3 percentage point increase quarter-on-quarter [3] - The growth in the automotive CIS segment is expected to drive revenue growth, with increasing demand in smart driving applications [4] Group 3: Valuation and Market Outlook - The valuation outlook for New Oriental's K12 education business remains positive due to steady revenue growth and potential for margin optimization [2] - The target price for New Oriental has been raised to HKD 55.00, reflecting a potential upside of 19.9% [1][2] - Howie Group's target price is maintained at 180 yuan, corresponding to a 35 times P/E ratio for 2026 [4]

Core Insights - The forum emphasizes the need for a shift in family education from a "race" mentality to a "field" approach, advocating for systemic changes through collaboration among families, schools, and society [1][3] - The importance of maintaining the core value of moral education and the humanistic aspect of education amidst technological changes and diverse challenges is highlighted [1][3] Group 1: Family Education Perspectives - Family education is evolving from a personal matter to a national concern, indicating its significance in the broader context of society [1][3] - Parents are encouraged to move away from excessive anxiety and to embrace a more composed and wise approach to education [1][3] - The role of parents as role models in scientific parenting is emphasized, with a focus on moral education as the essence of family education [3] Group 2: Educational System and Social Responsibility - The need for a more diverse evaluation system in schools is stressed, along with the implementation of a holistic approach to education that includes moral, intellectual, physical, aesthetic, and labor education [1][3] - There is a call for society to create an environment that allows children to explore freely and discover themselves [1][3] - The impact of excessive competition and digital product proliferation on youth mental health is addressed, with suggestions for creating supportive environments for children [3] Group 3: Future-Oriented Education - The shift from "race thinking" to "field thinking" is seen as crucial for nurturing each child's uniqueness and autonomy, preparing them for future challenges [3] - In the age of AI, fostering an open exploratory spirit in parents and enhancing children's humanistic qualities and independent thinking skills are deemed increasingly important [3]

Core Insights - The 17th New Oriental Family Education Forum was held in Beijing, focusing on the theme "From 'Track' to 'Wilderness': Reconstructing the Life Framework of Children's Growth" [1] - The forum gathered top experts and practitioners from various fields to address educational anxieties and explore diverse paths for children's comprehensive and healthy development [1] Group 1: Key Discussions - Notable figures, including writer and psychologist Bi Shumin and New Oriental founder Yu Minhong, engaged in deep discussions on the core theme, emphasizing the importance of mental order and life values [1] - Professor Zhang Zhiyong, a member of the National Committee of the Chinese People's Political Consultative Conference, highlighted the essential elements of family education, stating that "life education is the 'root' of family education" and "moral education is the 'soul'" [3] Group 2: Challenges and Solutions - The forum addressed the current challenges in family education and youth development, aiming to provide solutions to educational competition and reconstruct the growth ecosystem [3] - A consensus emerged that the transition from "track" to "wilderness" requires a collaborative systemic change involving families, schools, and society, urging parents to overcome anxiety and embrace a more relaxed and wise approach to education [3]

Core Insights - Goldman Sachs reported that New Oriental's management highlighted several key points during the Q1 earnings call for FY2026, including expectations for accelerated revenue growth in K12 business for Q2, an annual expansion in operating profit margin, and shareholder returns next year not lower than this year's level [1] Revenue and Profit Forecasts - Goldman Sachs maintained its revenue forecasts for New Oriental for FY2026 to FY2028, while raising the non-GAAP net profit forecast by 4% to reflect an 8% increase in non-GAAP operating profit, partially offset by reduced interest income and increased income tax [1] - The target price for New Oriental's H-shares was raised from HKD 42 to HKD 47, and the target price for its US shares was increased from USD 54 to USD 60 [1] Eastern Selection Adjustments - The revenue forecast for Dongfang Zhenxuan was lowered by 12% to 13%, but the adjusted net profit forecast was only reduced by 2% to 3%, reflecting an improvement in profit margin expectations [1] - The rating for Dongfang Zhenxuan was set to "Sell," with the target price increased from HKD 9 to HKD 10.2 [1]