Core Viewpoint - The report from Shenwan Hongyuan maintains revenue projections for New Oriental-S (09901) for FY26-FY28 at $5.38 billion, $5.98 billion, and $6.73 billion, respectively, with expectations of profit margin pressure easing as the overseas study business stabilizes [1] Revenue Projections - Shenwan Hongyuan forecasts New Oriental's 2QFY26 revenue to be $1.165 billion, representing a year-on-year growth of 12.2% [2] - The education business (including cultural tourism) is expected to generate $957 million, up 11% year-on-year, while other businesses (mainly Dongfang Zhenxuan) are projected to earn $208 million, reflecting an 18% increase [2] Overseas Study Business - The overseas examination training and consulting business is anticipated to generate $242 million in 2QFY26, a decline of 3% year-on-year, with a slowdown of 33.3 percentage points compared to the same period last year [3] - The company is adjusting its high-end one-on-one training model to a one-to-many format to lower class prices and is expanding its youth overseas examination training services to enhance growth resilience [3] New Business Growth - New business revenue (K9 competency training + learning machine business) is expected to grow by 21% year-on-year to $364 million in 2QFY26, driven by high growth in non-subject competency services [4] - The number of teaching centers is projected to increase to 1,368, a 20% year-on-year growth, with a slight slowdown of 3.7 percentage points compared to 1QFY26 [4] Operating Profit Margin Improvement - Despite the slowdown in high-margin overseas study business, the increase in competency business margins is expected to offset this [5] - Shenwan Hongyuan anticipates a year-on-year expansion of approximately 2 percentage points in Non-GAAP operating profit margin to 4.7% for 2QFY26, with the education business margin at 4.1%, up 0.9 percentage points year-on-year [5]