Core Viewpoint - Bank of America Securities has raised the target price for New Oriental-S (09901) to HKD 45.4, citing potential catalysts on the horizon, including improved overseas business performance and increased profit margins [1] Group 1: Earnings Forecast and Target Price Adjustment - The non-GAAP earnings per share forecast for the fiscal years 2026 to 2027 has been increased by 4% and 5% respectively, primarily due to a smaller-than-expected decline in overseas business revenue and improved profit margins [1] - The target price for New Oriental's U.S. stock has been raised to USD 58.2, maintaining a "Buy" rating [1] Group 2: Potential Catalysts - Shareholder returns are expected to improve, considering the company holds USD 4.8 billion in cash and has strong free cash flow generation capabilities projected to reach USD 500 million to USD 700 million from fiscal years 2026 to 2028. The current dividend payout ratio is equivalent to 50% of net profit, with significant room for increase. A 100% payout ratio in fiscal year 2026 would yield a dividend yield of 4.5% [2] - Overseas business performance is anticipated to exceed expectations, with management guiding for a single-digit percentage decline in overseas revenue for the August quarter and fiscal year 2026. Non-U.S./U.K. consulting and related services, which account for about 60% of consulting revenue, are expected to grow, partially offsetting declines in the U.S. (double-digit decline) and U.K. (moderate decline) [2] - The K9 business is expected to accelerate again, despite a potential slowdown in revenue growth for the August quarter due to course scheduling adjustments and competition from local small institutions. Growth is expected to resume in the November quarter as these negative factors dissipate [2] - Profit margin resilience is evident, with cost control measures, improved margins in K12 and Dongfang Zhenxuan, and a reduction in losses from the cultural tourism business expected to offset pressure on overseas business profit margins, driving an expansion in non-GAAP operating profit margins for fiscal year 2026 [2]
美银证券：升新东方-S(09901)目标价至45.4港元 潜在催化剂即将来临