Investment Rating - The report maintains an "OUTPERFORM" rating for New Oriental, with a target price raised from HK$49 to HK$52, reflecting an 18x PE on FY26 Non-GAAP net profit [2][5]. Core Insights - New Oriental's total revenue for 2QFY26 grew by 15% year-over-year to US$1.191 billion, exceeding Bloomberg consensus by 3% and surpassing the previous guidance range of 9% to 12% [3][11]. - The company's Non-GAAP operating profit surged by 223% year-over-year to US$89 million, significantly beating consensus expectations [3][11]. - Deferred revenue reached US$2.1615 billion, marking a 10.2% year-over-year increase [3][11]. - The K12 business is expected to accelerate growth, with projected revenue increasing by 19% year-over-year to US$815 million, driven by improved retention rates and increased course offerings during the winter vacation [12][3]. - The overseas study segment remains under pressure, but the company managed to achieve a 1% year-over-year growth in 2Q26, with expectations of a decline in revenue for the upcoming fiscal year due to ongoing market challenges [13][4]. Financial Summary - For FY26, total revenue is projected to be US$5.464 billion, with a net profit of US$525 million, reflecting a 15.4% growth year-over-year [9][10]. - The gross margin is expected to improve from 55.4% in FY25 to 55.7% in FY26, with operating margins increasing from 8.7% to 11.2% [9][10]. - The report highlights a significant improvement in operational efficiency, with core education operating profit margins rising by 3 percentage points due to effective cost optimization strategies [14][4]. Valuation and Recommendations - The report suggests that despite the current low double-digit revenue growth, investors should focus on the company's commitment to enhancing profit margins and overall returns for shareholders [15][5]. - The valuation reflects a sustainable growth outlook for the K12 segment, while the overseas study business is expected to improve its profit margins despite revenue challenges [15][5].
新东方-S（09901）：超预期并上调指引，降本增效战略持续显效