Core Points - The internal letter from Yu Minhong, founder of New Oriental, has sparked significant public backlash due to its perceived disconnect from employee concerns, particularly regarding work pressure and long hours [3][20] - Despite the controversy, New Oriental's stock price rose by 2.75% to $53.44 on the first trading day after the letter, although the stock has dropped 16.2% year-to-date and over 70% from its peak of $198.54 in 2021 [3][20] - New Oriental's net profit has plummeted by 73.7%, highlighting the company's financial struggles amid a talent crisis following the departure of key figures like Dong Yuhui and others [4][16] Company Overview - New Oriental has launched a new cultural tourism brand, aiming to diversify its business and leverage its existing educational resources [11][12] - The cultural tourism division has already established over 100 travel routes across 23 provinces, targeting K12 and university students [12] - The company reported a revenue of 3.3 billion yuan in 2023 for its tourism segment, with plans to expand into new areas such as cultural IP and hotel management [12] Financial Performance - For the fourth quarter of the 2025 fiscal year, New Oriental reported revenues of $1.24 billion, a year-on-year increase of 9.4%, but a net profit of only $710,000, down 73.7% [16] - The significant drop in net profit is attributed to rising costs, including a record goodwill impairment of $60.3 million [16] - The performance of Dong Yuhui's new venture, "With Hui Tongxing," has negatively impacted the sales and viewership of New Oriental's live-streaming business [19] Talent and Leadership Challenges - The departure of key influencers like Dong Yuhui has led to a strategic shift towards "de-IP" to reduce reliance on individual personalities [13][14] - The company is facing challenges in maintaining its competitive edge in the live-streaming e-commerce sector due to the loss of its star hosts [18][19] - New Oriental's leadership is attempting to adapt by focusing on building a more sustainable operational model rather than depending on high-profile individuals [13][14]

Core Viewpoint - The internal letter from Yu Minhong, celebrating the 32nd anniversary of New Oriental, has sparked significant public backlash due to its perceived disconnect from the current struggles of employees, particularly regarding their work pressures and the company's financial performance [1][3][20]. Summary by Sections Internal Communication - Yu Minhong's letter emphasized themes of perseverance and gratitude, likening the company's journey to the resilience of penguins in Antarctica [2][3]. - The letter mentioned the need for New Oriental to become a "sower of hope" and for its various branches, including Dongfang Zhenxuan and New Oriental Tourism, to represent integrity and cultural enrichment [1][11]. Employee Reactions - Employees expressed dissatisfaction with the letter, feeling it failed to acknowledge their current challenges, particularly the pressures of KPIs and long working hours [2][3][20]. - Social media reactions included comments highlighting the disparity between Yu's Antarctic experience and the daily struggles of employees, leading to a sense of alienation [2][3]. Financial Performance - New Oriental's financial results showed a significant decline, with a 73.7% drop in net profit for the fourth quarter of the 2025 fiscal year, despite a 9.4% increase in revenue [17][19]. - The company faced increased operational costs and a record goodwill impairment of $60.3 million, contributing to the profit decline [17][19]. Market Response - Following the internal letter, New Oriental's stock price rose slightly, closing at $53.44, but the stock has seen a 16.2% decline year-to-date and over 70% from its peak in 2021 [3][20]. - The overall market sentiment remains cautious, reflecting the ongoing challenges faced by the company and its leadership [20]. Talent and Leadership Challenges - The departure of key figures, including popular hosts from Dongfang Zhenxuan, has raised concerns about talent retention and the company's ability to maintain its competitive edge [14][19]. - The shift towards a "de-IP" strategy aims to reduce reliance on individual personalities and focus on building a more sustainable operational model [14][19]. New Business Initiatives - New Oriental has launched a tourism brand, aiming to diversify its offerings and leverage its educational expertise to enhance the travel experience [11][12]. - The tourism segment has shown potential for growth, with plans to expand into new areas and achieve profitability by the 2026 fiscal year [12][20].