Investment Rating - The report initiates coverage with a "Buy" rating for New Oriental Education & Technology Group (09901.HK) [4] Core Insights - The report addresses the comprehensive questions surrounding the market's focus on the leading education training company since its rebirth, emphasizing the changes in industry policies and regulatory execution, innovative business models supporting performance recovery, and the evolving market space for various educational services [2][8] Summary by Relevant Sections Industry Policy and Regulatory Changes - The "Double Reduction" policy remains unchanged since its announcement in July 2021, focusing on reducing student burdens while gradually standardizing execution across various aspects such as funding regulation, training content supervision, advertising, operating hours, and pricing guidance [16][22] - The number of offline academic training institutions has drastically decreased from 124,000 to 4,932, a reduction rate of 96%, while online institutions dropped from 263 to 34, a reduction rate of 87% [16][17] Business Operations and Structural Changes - New Oriental has successfully transitioned its business model post-"Double Reduction," focusing on quality education and innovative products like rental learning machines, which have gained acceptance from students and parents [2][8] - The company has optimized its operational efficiency, achieving quarterly revenue of 8.6 billion RMB (approximately 1.2 billion USD) in FY24Q3, surpassing pre-"Double Reduction" levels [2][9] Market Space for Educational Services - The non-academic training market is expected to grow significantly, with projections indicating a market size expansion to 951.9 billion RMB by 2025, driven by increasing participation rates and higher spending per customer [2][9] - The study predicts a compound annual growth rate (CAGR) of 13% for the study abroad training market from 2023 to 2025, alongside a 7% CAGR for high school training and a 10% CAGR for graduate exam training during the same period [2][9] Financial Forecast and Valuation - Revenue projections for New Oriental are estimated at 4.3 billion USD, 5.7 billion USD, and 7.1 billion USD for FY2024, FY2025, and FY2026, respectively, with GAAP net profits expected to reach 382 million USD, 614 million USD, and 827 million USD in the same years [3][9] - The report assigns a target market capitalization of 165.2 billion HKD and a target price of 99.84 HKD for FY2025, based on a comprehensive valuation approach [4][9]
新东方-S：新东方为何是本轮教培行情的龙头？