Core Viewpoint - Haitong International maintains an "outperform" rating for New Oriental-S (09901) and raises the target price from HKD 49 to HKD 52 based on upgraded performance expectations [1] Group 1: Financial Performance - In Q2 FY26, the company's total revenue increased by 15% year-on-year to USD 1.191 billion, exceeding consensus expectations by 3% and surpassing the previous guidance of 9%-12% [2] - Non-GAAP operating profit surged by 223% year-on-year to USD 89 million, exceeding consensus expectations by 62%, resulting in a Non-GAAP operating profit margin of 7.5%, which is 2.8 percentage points higher than the consensus forecast [2] - Deferred revenue reached USD 2.1615 billion, reflecting a year-on-year growth of 10.2%, consistent with the 10% growth in Q1 FY26 [2] Group 2: K12 Business Outlook - K12 business revenue is expected to accelerate in Q3 FY26, driven by improved retention rates and increased class scheduling during the winter break [2] - The company has made significant progress in enhancing product quality and teaching effectiveness, leading to a notable increase in user retention rates for high school and K9 non-academic businesses [2] - K12 revenue is projected to grow by 19% year-on-year to USD 815 million, with high school business expected to grow by 18% and K9 new business by 23% due to strong recovery in junior high [2] Group 3: Study Abroad Business Challenges - The study abroad sector remains under pressure, impacting the overall revenue of the core education segment [3] - Despite a challenging macroeconomic and international environment, the company managed to capture market share in Q2 FY26, achieving a 1% year-on-year growth [3] - The company holds a conservative outlook for Q4 FY26 due to the seasonal characteristics of the study abroad consulting business and anticipates a decline in study abroad revenue next year due to ongoing industry challenges [3] Group 4: Cost Reduction and Efficiency Improvement - The core education segment's operating profit margin improved by 3 percentage points in Q2 FY26, primarily due to effective cost reduction and efficiency measures [4] - These measures include cautious expansion of learning centers and control of marketing expenses, which are expected to continue delivering results [4] - The company forecasts a year-on-year increase in Non-GAAP operating profit margins of 1.4 and 1.6 percentage points in Q3 FY26 and FY26, respectively, reaching 13.4% and 12.9% [4]
海通国际：维持新东方-S“优于大市”评级 降本增效战略持续显效