Investment Rating - The investment rating for New Oriental Education Technology (9901 HK) is "Buy" with a target price of HKD 80.00, indicating a potential upside of 46.1% from the current price of HKD 54.75 [1][9]. Core Insights - The report highlights that the Q4 FY2024 performance was below expectations, with revenue of USD 1.1 billion, a year-on-year increase of 32%, primarily driven by growth in new educational businesses. However, adjusted operating profit fell to USD 36 million, a 54% decline year-on-year, and below the expected USD 69 million, resulting in an adjusted operating margin of 3.2%, down 5.9 percentage points year-on-year [1][2]. - The core education business is expanding rapidly, with traditional services such as study abroad consulting and exam preparation showing year-on-year revenue growth of 17.7% to 25%. New business segments grew by 50%, contributing approximately 20% to total revenue, with non-academic training enrollment increasing by 39% to 875,000 students [1][2][3]. - The company is accelerating the expansion of its teaching points, reaching 1,025 locations as of May 31, with a net increase of 277 points year-on-year. The company plans to expand by 20-25% in FY2025 [1][2]. Financial Forecast and Valuation - For Q1 FY2025, revenue is expected to grow by 33% to USD 1.46 billion, with an adjusted operating margin projected to improve by 2 percentage points to 19%, excluding the impact of the spin-off of Huizhong [2][3]. - The financial outlook includes revenue projections of USD 5.46 billion for FY2025, with a year-on-year growth rate of 26.6%, and adjusted net profit expected to reach USD 603 million [3][10]. - The report adjusts the target price to HKD 80, based on a 25x price-to-earnings ratio, reflecting a conservative approach that excludes the value of the spin-off and cash [2][3]. Financial Data Overview - Key financial metrics for New Oriental Education Technology include: - Revenue (in million USD): 2023: 2,998, 2024: 4,314, 2025E: 5,462 [3][10]. - Net Profit (in million USD): 2023: 259, 2024: 381, 2025E: 603 [3][10]. - Adjusted Operating Margin: 2024: 11.3%, 2025E: 19% [2][3]. - Earnings Per Share (EPS in USD): 2024: 0.23, 2025E: 0.36 [3][10].
新东方-S：2024财年4季度利润率不及预期，教学点扩张稳定推进