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].

Core Insights - New Oriental is diversifying its business model by focusing on the cultural tourism sector, aiming to create a synergistic ecosystem of "education + e-commerce + cultural tourism" [1][2] - The founder, Yu Minhong, is actively promoting the new cultural tourism brand "You Travel with Yu" while traveling extensively, which has sparked discussions about leadership presence and employee engagement [1] - The cultural tourism division, established in July 2023 with a registered capital of 1 billion RMB, is positioned to provide high-quality cultural tourism services and has already launched programs in 55 cities [2] Group 1 - Yu Minhong's travels are not just personal but are aimed at enhancing New Oriental's cultural tourism brand and vision [1] - The cultural tourism segment is seen as a new growth engine for New Oriental, with potential for independent listing [1][2] - New Oriental has invested in various companies to build a comprehensive service system covering educational travel, high-end customization, and cultural experiences [2] Group 2 - New Oriental's stock has faced challenges, with an 18.03% decline in the US market due to slowing overseas study business and profitability pressures [3] - Despite recent leadership changes at Dongfang Zhenxuan, the overall business structure is evolving towards a more resilient model integrating education, cultural tourism, and e-commerce [3]