Workflow
新东方-S(09901) - 2024 - 年度财报
09901NEW ORIENTAL(09901)2024-09-25 11:42

Financial Performance and Results - New Oriental Education & Technology Group Inc. reported its audited annual results for the fiscal year ending May 31, 2024[1] - Net revenue for FY2024 reached 4,313.586million,withnetservicerevenueat4,313.586 million, with net service revenue at 3,500.998 million and net product revenue at 812.588million[33]−OperatingprofitforFY2024was812.588 million[33] - Operating profit for FY2024 was 350.425 million, compared to a loss of 982.513millioninFY2022[33]−NetprofitforFY2024was982.513 million in FY2022[33] - Net profit for FY2024 was 325.218 million, a significant improvement from a net loss of 1,220.276millioninFY2022[33]−TotaloperatingcostsandexpensesforFY2024were1,220.276 million in FY2022[33] - Total operating costs and expenses for FY2024 were 3,963.161 million, with revenue costs at 2,050.960millionandsalesandmarketingexpensesat2,050.960 million and sales and marketing expenses at 660.586 million[33] - Interest income for FY2024 was 153.589million,whileinterestexpenseswereonly153.589 million, while interest expenses were only 0.298 million[33] - The company's effective tax rate for FY2024 was approximately 25.2%, with current tax provisions at 130.927millionanddeferredtaxprovisionsat130.927 million and deferred tax provisions at 21.237 million[33] - Basic earnings per share for FY2024 were 0.19,comparedtoalossof0.19, compared to a loss of 0.70 per share in FY2022[33] - Weighted average shares outstanding for basic EPS calculation in FY2024 were 1,653,597,432[33] - The company's intangible assets and goodwill impairment losses were zero in FY2024, compared to 31.794millioninFY2021[33]−Totalshare−basedcompensationexpensesforFY2024were31.794 million in FY2021[33] - Total share-based compensation expenses for FY2024 were 122.458 million, with general and administrative expenses accounting for 76.439millionofthattotal[33]−Cashandcashequivalentsincreasedfrom76.439 million of that total[33] - Cash and cash equivalents increased from 915.057 million in 2020 to 1,662.982millionin2023,butdecreasedto1,662.982 million in 2023, but decreased to 1,389.359 million in 2024[35] - Total assets grew from 6,556.885millionin2021to6,556.885 million in 2021 to 7,531.673 million in 2024[35] - Total liabilities increased from 3,687.074millionin2020to3,687.074 million in 2020 to 3,482.659 million in 2024[35] - Total equity rose from 2,869.811millionin2020to2,869.811 million in 2020 to 4,049.014 million in 2024[35] - Third-party net revenue for 2024 was 4,313.586million,upfrom4,313.586 million, up from 2,997.760 million in 2023[36][37] - Operating costs and expenses totaled 3,963.161millionin2024,comparedto3,963.161 million in 2024, compared to 2,807.714 million in 2023[36][37] - Net profit for 2024 was 325.218million,asignificantimprovementfromanetlossof325.218 million, a significant improvement from a net loss of 1,220.276 million in 2022[36][37] - Other net income increased to 143.416millionin2024from143.416 million in 2024 from 118.485 million in 2023[36][37] - Income tax provision for 2024 was 109.690million,upfrom109.690 million, up from 66.066 million in 2023[36][37] - Cash and cash equivalents for consolidated affiliated entities in 2024 were 1,389.359million[38]−Totalassetsincreasedto1,389.359 million[38] - Total assets increased to 7,531,673K in 2024 from 6,392,458Kin2023,reflectingagrowthof17.86,392,458K in 2023, reflecting a growth of 17.8%[39][40] - Total liabilities rose to 3,482,659K in 2024 from 2,577,670Kin2023,markinga35.12,577,670K in 2023, marking a 35.1% increase[39][40] - Total equity grew to 4,049,014K in 2024 from 3,814,788Kin2023,showinga6.13,814,788K in 2023, showing a 6.1% increase[39][40] - Net cash generated from operating activities was 1,122,643K in 2024, compared to 971,008Kin2023,a15.6971,008K in 2023, a 15.6% increase[41][42] - Net cash used in investing activities was 1,153,922K in 2024, compared to 37,411Kin2023,indicatingasignificantincreaseininvestmentoutflows[41][42]−Netcashusedinfinancingactivitieswas37,411K in 2023, indicating a significant increase in investment outflows[41][42] - Net cash used in financing activities was 160,438K in 2024, compared to 246,867Kin2023,showinga35246,867K in 2023, showing a 35% decrease in financing outflows[41][42] - Deferred revenue increased to 1,780,063K in 2024 from 1,337,630Kin2023,reflectinga33.11,337,630K in 2023, reflecting a 33.1% growth[39][40] - Property and equipment net value increased to 507,981K in 2024 from 359,760Kin2023,a41.2359,760K in 2023, a 41.2% increase[39][40] - Other non-current assets grew to 1,634,814K in 2024 from 1,618,811Kin2023,aslightincreaseof11,618,811K in 2023, a slight increase of 1%[39][40] - Total current assets increased to 5,388,878K in 2024 from 4,413,887Kin2023,showinga22.14,413,887K in 2023, showing a 22.1% growth[39][40] - Net cash used in financing activities for the year ended May 31, 2023 was 246.867 million, compared to 230.858millionforthepreviousyear[43]−NetcashgeneratedfromoperatingactivitiesfortheyearendedMay31,2022wasnegative230.858 million for the previous year[43] - Net cash generated from operating activities for the year ended May 31, 2022 was negative 1.280 billion[43] - Net cash generated from investing activities for the year ended May 31, 2022 was 1.169billion[43]−Long−terminvestmentfairvaluechangesresultedinalossof1.169 billion[43] - Long-term investment fair value changes resulted in a loss of 0.9 million for the fiscal year ending May 31, 2023, and a gain of 19.0millionforthefiscalyearendingMay31,2024[77]RegulatoryandComplianceRisks−ThecompanyhassubmittedareportontheeffectivenessofinternalcontroloverfinancialreportingasrequiredbySection404(b)oftheSarbanes−OxleyAct[6]−Thecompanyfacesrisksrelatedtocompetitioninlive−streaminge−commerceandthedevelopmentofneweducationalproductsandservices[13]−Thecompanyanticipateschangesinrevenue,costs,andexpenses,influencedbymarkettrendsandregulatorypoliciesinChina[13]−Thecompany′sVIEs,includingBeijingXunchengandNewOrientalChina,areconsolidatedintofinancialstatementsdespitenodirectequityownership[9]−Thecompany′sforward−lookingstatementsarebasedonexpectationsoffutureevents,financialtrends,andregulatoryimpactsinChina[13]−ThecompanyoperatesinChinathroughaseriesofcontractualarrangementswithvariableinterestentities(VIEs),includingequitypledgeagreements,exclusiveoptionagreements,andserviceagreements[15][16][17]−Thecompany′scontractualarrangementsforcontrollingvariableinterestentities(VIEs)arelesseffectivethandirectownership,posingrisksofconflictsandlegaluncertainties[20]−PotentialchangesinChineselawsandregulationscouldimpacttheenforceabilityofthecompany′scontractualarrangementswithVIEs,leadingtoseverepenaltiesorlossofbusinessinterests[21]−Thecompanyfacesrisksrelatedtoregulatoryapprovals,antitrustactions,educationindustryregulations,andcybersecurity,whichcouldaffectitsoperationsandstockvalue[21]−Chinesegovernmentoversightandcontroloveroverseaslistingsandinvestmentscouldseverelylimitthecompany′sabilitytoissuesecurities,potentiallycausingasignificantdropintheirvalue[22]−Thecompany′sChinesesubsidiariesandconsolidatedaffiliatedentitieshaveobtainednecessarylicensesandpermits,includingprivateschooloperationpermits,ICPlicenses,EDIlicenses,foodbusinesslicenses,publicationbusinesslicenses,performancebusinesslicenses,travelagencybusinesslicenses,andhealthcarelicenses[23]−ThecompanyisnotcurrentlyrequiredtoobtainpermitsorcompletefilingswiththeChinaSecuritiesRegulatoryCommission(CSRC)ortheCyberspaceAdministrationofChina(CAC)forpastsecuritiesissuancestoforeigninvestors[24]−ThecompanybelievesitisnotsubjecttocybersecurityreviewbytheCACformaintainingitslistingstatusontheNYSEundercurrentChineselawsandregulations[24]−The"OverseasListingTrialMeasures"requireChinesecompaniesseekingoverseassecuritiesissuancetofilewiththeCSRC,butcompanieslistedbeforeMarch31,2023,arenotrequiredtofileimmediately[24]−FutureoverseassecuritiesissuancesbythecompanymayrequirefilingwiththeCSRC,includingfollow−onofferings,convertiblebondissuances,andrelistingsafterprivatization[24]−TheChinesegovernmenthasexpressedintentionstoincreasesupervisionandcontroloveroverseasissuancesandforeigninvestments,creatingregulatoryuncertaintyforthecompany[25]−Failuretoobtainnecessaryapprovalsorchangesinlawsandregulationscouldresultinpenalties,includingfines,suspensionofoperations,orrevocationoflicenses,severelyimpactingthecompany′sabilitytoissuesecurities[25]−Thecompanyfacesrisksrelatedtodataprivacy,protection,andcybersecurityregulations,whichcouldleadtopenalties,reputationaldamage,andadverseeffectsonitsbusinessoperations[23]−Thecompanymayneedtoobtainadditionallicenses,permits,orapprovalsinthefutureduetopotentialchangesintheinterpretationandenforcementoflawsandregulations[23]−Regulatoryuncertaintiesandpotentialgovernmentoversightcouldsignificantlyimpactthecompany′soperationsandthevalueofitssecurities[25]−ThecompanymaybeidentifiedasaCommission−IdentifiedIssuerundertheHFCAAifPCAOBdeterminesitcannotfullyinspectorinvestigateaccountingfirmsinChinaandHongKong,potentiallyleadingtoatradingbanintheU.S.ifidentifiedfortwoconsecutiveyears[26]−Thecompany′sabilitytopaydividendsandrepaydebtdependsondividendsfromitsChinesesubsidiariesandservicefeesfromvariableinterestentities,whicharesubjecttoregulatoryrestrictionsandChineseaccountingstandards[27]−Chinesesubsidiariesandvariableinterestentitiesfacerestrictionsontransferringassetsordividendsoverseas,includingforeignexchangecontrolsandmandatoryreserveallocations[28]−Thecompanyreceivedloanrepaymentsof19.0 million for the fiscal year ending May 31, 2024[77] Regulatory and Compliance Risks - The company has submitted a report on the effectiveness of internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act[6] - The company faces risks related to competition in live-streaming e-commerce and the development of new educational products and services[13] - The company anticipates changes in revenue, costs, and expenses, influenced by market trends and regulatory policies in China[13] - The company's VIEs, including Beijing Xuncheng and New Oriental China, are consolidated into financial statements despite no direct equity ownership[9] - The company's forward-looking statements are based on expectations of future events, financial trends, and regulatory impacts in China[13] - The company operates in China through a series of contractual arrangements with variable interest entities (VIEs), including equity pledge agreements, exclusive option agreements, and service agreements[15][16][17] - The company's contractual arrangements for controlling variable interest entities (VIEs) are less effective than direct ownership, posing risks of conflicts and legal uncertainties[20] - Potential changes in Chinese laws and regulations could impact the enforceability of the company's contractual arrangements with VIEs, leading to severe penalties or loss of business interests[21] - The company faces risks related to regulatory approvals, antitrust actions, education industry regulations, and cybersecurity, which could affect its operations and stock value[21] - Chinese government oversight and control over overseas listings and investments could severely limit the company's ability to issue securities, potentially causing a significant drop in their value[22] - The company's Chinese subsidiaries and consolidated affiliated entities have obtained necessary licenses and permits, including private school operation permits, ICP licenses, EDI licenses, food business licenses, publication business licenses, performance business licenses, travel agency business licenses, and healthcare licenses[23] - The company is not currently required to obtain permits or complete filings with the China Securities Regulatory Commission (CSRC) or the Cyberspace Administration of China (CAC) for past securities issuances to foreign investors[24] - The company believes it is not subject to cybersecurity review by the CAC for maintaining its listing status on the NYSE under current Chinese laws and regulations[24] - The "Overseas Listing Trial Measures" require Chinese companies seeking overseas securities issuance to file with the CSRC, but companies listed before March 31, 2023, are not required to file immediately[24] - Future overseas securities issuances by the company may require filing with the CSRC, including follow-on offerings, convertible bond issuances, and relistings after privatization[24] - The Chinese government has expressed intentions to increase supervision and control over overseas issuances and foreign investments, creating regulatory uncertainty for the company[25] - Failure to obtain necessary approvals or changes in laws and regulations could result in penalties, including fines, suspension of operations, or revocation of licenses, severely impacting the company's ability to issue securities[25] - The company faces risks related to data privacy, protection, and cybersecurity regulations, which could lead to penalties, reputational damage, and adverse effects on its business operations[23] - The company may need to obtain additional licenses, permits, or approvals in the future due to potential changes in the interpretation and enforcement of laws and regulations[23] - Regulatory uncertainties and potential government oversight could significantly impact the company's operations and the value of its securities[25] - The company may be identified as a Commission-Identified Issuer under the HFCAA if PCAOB determines it cannot fully inspect or investigate accounting firms in China and Hong Kong, potentially leading to a trading ban in the U.S. if identified for two consecutive years[26] - The company's ability to pay dividends and repay debt depends on dividends from its Chinese subsidiaries and service fees from variable interest entities, which are subject to regulatory restrictions and Chinese accounting standards[27] - Chinese subsidiaries and variable interest entities face restrictions on transferring assets or dividends overseas, including foreign exchange controls and mandatory reserve allocations[28] - The company received loan repayments of 282.1 million, 290.0million,and290.0 million, and 1.5 million from indirect holding companies and subsidiaries in fiscal years 2022, 2023, and 2024, respectively[28] - The company provided loans of 330.4million,330.4 million, 50.0 million, and $0 to indirect holding companies and subsidiaries in fiscal years 2022, 2023, and 2024, respectively[28] - The company has no formal dividend policy or cash management policy governing fund transfers between entities, relying instead on applicable Chinese laws and regulations[30] - Under a hypothetical tax scenario, the company's net distributable profit after a 25% corporate tax rate and 10% withholding tax would be 67.5% of pre-tax profit[31] - If variable interest entities' cumulative profits exceed fees paid to Chinese subsidiaries, non-deductible transfers may occur, reducing the company's after-tax income[31] - The company's operations in China are subject to Chinese laws and regulations, which can change rapidly with little notice, potentially impacting legal protections and compliance decisions[49] - The Chinese government's significant oversight and discretionary power over the company's operations could lead to major adverse changes in its operations and the value of its American Depositary Shares (ADS)[49] - Offshore offerings by the company may require approval or filing with the China Securities Regulatory Commission (CSRC) or other Chinese government agencies, with uncertain timelines and outcomes[50] - PCAOB's inability to inspect auditors in China could lead to the delisting of the company's ADS from U.S. exchanges under the HFCAA, significantly impacting investor value[50] - The company's ADS and ordinary shares have experienced and may continue to experience significant price volatility, potentially causing substantial losses for shareholders[51] - Negative reports by securities or industry analysts could lead to a decline in the price and trading volume of the company's ordinary shares and ADS[51] - Termination of K-9 academic tutoring services in China due to regulatory changes has had and may continue to have a significant adverse impact on the company's business, financial condition, and prospects[52] - The company closed 644 schools and learning centers, reducing the total number from 1,669 as of May 31, 2021, to 1,025 as of May 31, 2024, as part of its business restructuring[52] - The company's smart learning systems and devices may be classified as subject-based after-school tutoring activities, potentially requiring compliance with the "Double Reduction" policy and other regulations[58] - The company's revenue and profitability may decline if it fails to attract students without significantly reducing course fees[59] - The company faces risks of fines, operational suspensions, or other penalties if it fails to comply with the "Double Reduction" policy and related regulations[58] - The company may need to adjust its business operations further if new rules or regulations are introduced in China[58] - The company's ongoing license applications and existing permits could be negatively affected by regulatory non-compliance[58] - The company faces risks related to recent regulatory changes in the after-school tutoring services market[63] - The company's past financial performance may not be indicative of future results due to uncertainties in new business development and acquisitions[63] - The company has been involved in intellectual property infringement claims, including a 2001 case resulting in a RMB 6.5 million damages payment[65] - The company collaborates with international education content providers such as Cambridge University Press and Oxford University Press[65] - The company faces challenges in maintaining consistent teaching quality across its school network[62] - The company must provide competitive compensation to attract and retain qualified teachers in China[62] - The company's growth may be impacted by a limited pool of experienced teachers in China[62] - The company's operations are subject to Chinese laws requiring teachers to obtain necessary qualifications[62] - The company's acquisitions may not yield expected benefits and could negatively impact business management[64] - The company faces potential legal claims and disputes related to copyright infringement and unauthorized use of third-party names, which could lead to increased expenses, revenue loss, and reputational damage[66] - The company has invested over 20 years in building the "New Oriental" brand, emphasizing quality and consistency, but faces challenges in preventing unauthorized use of its trademarks and names by third parties[67] - The company operates in a highly competitive education industry in China, with competitors potentially having more resources and faster adaptability to market changes, which could impact student enrollment and profitability[67] - The company faces competition from online education providers using advanced technologies like live streaming, which may force the company to lower course fees or increase spending to remain competitive[67] - The company's profitability may be affected by intense competition from other live-streaming e-commerce participants with stronger financial and marketing resources[68] - The company's business operations could be significantly disrupted by infectious disease outbreaks, such as COVID-19, leading to temporary closures of schools and learning centers, impacting revenue and liquidity[70] - The company experienced a decline in gross and net profit margins due to regulatory developments in the after-school tutoring sector, with operating profit margins turning positive in FY2023 and improving in FY2024[71] - New investments and acquisitions may lead to a temporary decline in profit margins until the acquired businesses are fully integrated and synergies are realized[71] - The company's total revenue and operating performance are subject to seasonal fluctuations, with the highest revenue typically recorded in the first fiscal quarter (June 1 to August 31) due to increased student enrollment during summer[72] - The COVID-19 pandemic negatively impacted the company's financial and operating performance in the third and fourth fiscal quarters of 2020[72] - The company's American Depositary Shares (ADS) and ordinary shares experienced significant price declines following the release of the "Double Reduction" policy in July 2021[73] - The company's ADS and ordinary shares also saw a sharp decline after announcing the departure of a key figure and the sale of a subsidiary in July 2024[73] - The company faces risks from changes in exam materials, admission standards, and regulations, which could reduce the attractiveness of its courses and services[74] - The company may be required to take corrective measures or suspend training materials if it fails to comply with new curriculum and training material requirements[74] - A potential reduction in reliance on admission and assessment exams by higher education institutions could decrease demand for the company's services and products[75] - The company's deferred revenue, which represents prepaid tuition, may not reflect actual future revenue due to potential changes in customer preferences or service delivery[76] - Failure to fulfill obligations related to deferred revenue could adversely affect the company's operating performance and liquidity[76] - The company's new e-commerce platform under the "Oriental Selection" brand, launched in 2022, has shown significant progress in proprietary product sales and live-streaming e-commerce during the 2023 and 2024 fiscal years[78] - The "Yu Hui Tong Xing" live-streaming account, associated with star host Dong Yuhui, gained significant popularity since its launch in January 2024, leading to a broader consumer base[80] - In August 2024, "Yu Hui Tong Xing" ceased to be a consolidated affiliate of Oriental Selection, and its financial results were no longer included in Oriental Selection's consolidated financial statements[80] - The company's total net revenue for the fiscal year ending May 31, 2024, was largely derived from operations in Beijing, Hangzhou, Guangzhou, and Nanjing[80] - The company's OMO (Online-Merge-Offline) standardized digital classroom teaching system, developed in 2014, integrates offline schools and learning centers with online education systems to enhance operational efficiency[81] - The company faces risks in maintaining and expanding its market share due to rapid technological changes and unpredictable user preferences in the online education market[81] - The company relies heavily on star hosts for its live-streaming e-commerce business, and a decline in their popularity or inability to retain them could significantly impact gross merchandise value[80] - The company's ability to adapt to evolving student needs, technological advancements, and internet operations is critical for maintaining competitiveness in the online education market[81] - The company's reliance on unobservable inputs for fair value assessments of long-term investments introduces inherent uncertainty and subjectivity, which could significantly impact valuations[77] - The company maintains effective internal controls over financial reporting as of May 31, 2024, but cannot guarantee future effectiveness[82] - Lack of liability or business interruption insurance for some teaching facilities may expose the company to financial and reputational risks[83] - The company's online course infrastructure relies on elastic cloud computing to handle increasing student demand[83] - Multiple cloud data centers are used to ensure service continuity in case of damage to on-site computer centers[83] - The company has experienced multiple cyberattacks in the past, though none caused significant operational impact[84] - Data security measures are in place