Core Viewpoint - Haitong International maintains an "outperform" rating for New Oriental-S (09901) and raises the target price from HKD 49 to HKD 52 based on upgraded performance expectations [1] Group 1: Financial Performance - In Q2 FY26, the company's total revenue increased by 15% year-on-year to USD 1.191 billion, exceeding consensus expectations by 3% and surpassing the previous guidance of 9%-12% [2] - Non-GAAP operating profit surged by 223% year-on-year to USD 89 million, exceeding consensus expectations by 62%, resulting in a Non-GAAP operating profit margin of 7.5%, which is 2.8 percentage points higher than the consensus forecast [2] - Deferred revenue reached USD 2.1615 billion, reflecting a year-on-year growth of 10.2%, consistent with the 10% growth in Q1 FY26 [2] Group 2: K12 Business Outlook - K12 business revenue is expected to accelerate in Q3 FY26, driven by improved retention rates and increased class scheduling during the winter break [2] - The company has made significant progress in enhancing product quality and teaching effectiveness, leading to a notable increase in user retention rates for high school and K9 non-academic businesses [2] - K12 revenue is projected to grow by 19% year-on-year to USD 815 million, with high school business expected to grow by 18% and K9 new business by 23% due to strong recovery in junior high [2] Group 3: Study Abroad Business Challenges - The study abroad sector remains under pressure, impacting the overall revenue of the core education segment [3] - Despite a challenging macroeconomic and international environment, the company managed to capture market share in Q2 FY26, achieving a 1% year-on-year growth [3] - The company holds a conservative outlook for Q4 FY26 due to the seasonal characteristics of the study abroad consulting business and anticipates a decline in study abroad revenue next year due to ongoing industry challenges [3] Group 4: Cost Reduction and Efficiency Improvement - The core education segment's operating profit margin improved by 3 percentage points in Q2 FY26, primarily due to effective cost reduction and efficiency measures [4] - These measures include cautious expansion of learning centers and control of marketing expenses, which are expected to continue delivering results [4] - The company forecasts a year-on-year increase in Non-GAAP operating profit margins of 1.4 and 1.6 percentage points in Q3 FY26 and FY26, respectively, reaching 13.4% and 12.9% [4]

Group 1 - The core viewpoint of the report indicates that the Federal Reserve is unlikely to restart interest rate cuts in the first quarter of 2026, as the job market stabilizes and inflation has not yet shown a downward turning point [2] - The report highlights that New Oriental's FY26Q2 performance exceeded expectations, with net revenue of $1.191 billion, a year-on-year increase of 14.7%, and a net profit of $45.45 million, up 42.3% year-on-year [5] - The report projects an upward revision of New Oriental's net profit forecasts for FY26 to FY28, with estimates raised to $497 million, $585 million, and $680 million respectively, reflecting a 13%, 14%, and 17% increase [5] Group 2 - The A-share stock selection for February 2026 includes companies such as Zhongji Xuchuang, Hikvision, and China Life, indicating a focus on stable holdings during the holiday period [3] - The report notes that the bond market is increasingly influenced by non-bank financial sectors, emphasizing the need for macro-prudential mechanisms to address risks in the bond market [4]

Core Viewpoint - Haitong International maintains an "outperform" rating for New Oriental-S (09901) and raises the target price from HKD 49 to HKD 52 based on upgraded performance expectations [1] Group 1: Financial Performance - In Q2 FY26, the company's total revenue increased by 15% year-on-year to USD 1.191 billion, exceeding consensus expectations by 3% and surpassing the previous guidance of 9%-12% [1] - Non-GAAP operating profit surged by 223% year-on-year to USD 89 million, exceeding consensus expectations by 62%, with a Non-GAAP operating profit margin of 7.5%, up 2.8 percentage points from the consensus estimate of 4.7% [1] - Deferred revenue reached USD 2.1615 billion, a year-on-year increase of 10.2%, consistent with the 10% growth in Q1 FY26 [1] Group 2: K12 Business Outlook - K12 business revenue is expected to accelerate growth in Q3 FY26, driven by improved retention rates and increased course offerings during the winter break [2] - The K12 business revenue is projected to grow by 19% year-on-year to USD 815 million, with high school business expected to grow by 18% and K9 new business anticipated to increase by 23% [2] Group 3: Study Abroad Business Challenges - The study abroad sector remains under pressure, impacting the overall revenue of the core education segment [3] - Despite a 1% year-on-year growth in Q2 FY26, the company is expected to adopt a conservative outlook for Q4 FY26 due to the seasonal characteristics of the study abroad consulting business [3] - The company anticipates a decline in study abroad revenue next year due to the ongoing instability in the industry and the merger of exam preparation and study abroad consulting businesses [3] Group 4: Cost Reduction and Efficiency Improvement - The core education segment's operating profit margin improved by 3 percentage points in Q2 FY26, attributed to effective cost reduction and efficiency measures [4] - The company expects these measures to continue yielding results, with projected Non-GAAP operating profit margins increasing by 1.4 and 1.6 percentage points year-on-year to 13.4% and 12.9% for Q3 FY26 and FY26, respectively [4]

Core Viewpoint - The declining birth rate in China is prompting educational institutions to explore opportunities in the senior education sector, with companies like New Oriental leading the way in offering courses tailored for older adults [1][5][10]. Group 1: Industry Trends - The education industry is witnessing a shift as companies pivot towards the silver economy, with New Oriental launching senior universities and retirement clubs offering affordable courses [1][6]. - The silver economy market in China is projected to exceed 20 trillion yuan by 2030, indicating significant growth potential for senior education and related services [7]. - The demographic shift shows a rising percentage of the population aged over 60, increasing from 18.9% in 2021 to an expected 23% by 2025, highlighting the need for educational services targeting this age group [6][10]. Group 2: Company Strategies - New Oriental is not only focusing on senior education but also expanding into cultural tourism and health services, leveraging its existing K12 infrastructure [13][24]. - Other educational institutions, such as Angli Education and Excellence Education, are also entering the senior education market, offering various interest-based courses and even establishing senior care facilities [9][20]. - The pricing strategy for senior courses is significantly lower than traditional K12 offerings, with New Oriental's courses averaging 37.5 yuan per class hour, making them accessible to a broader audience [10][11]. Group 3: Market Dynamics - The traditional K12 education model faces challenges due to a peak in school-age populations, while the senior education market presents a new avenue for growth [10][25]. - The interest-driven nature of senior education poses challenges in terms of customer retention and revenue stability, as many older adults may not have a strong financial commitment to ongoing education [11][21]. - Companies are increasingly recognizing that the true value lies not just in classroom education but in connecting seniors to higher-margin services in cultural tourism and wellness [21][24].

Core Viewpoint - New Oriental reported a net revenue of $1.191 billion for FY26Q2, representing a year-on-year increase of 14.7%, and a net profit attributable to shareholders of $45.45 million, up 42.3% year-on-year [4][5]. Group 1: Business Performance - The company's revenue from overseas examination preparation increased by 4.1% year-on-year, focusing on core exam training needs [5]. - Revenue from domestic examination preparation for adults and college students grew by 12.8% year-on-year, maintaining a steady growth trend [5]. - New business revenue rose by 21.6% year-on-year, with non-subject tutoring services operating in approximately 60 cities and attracting around 1.058 million registrations [5]. - The Oriental Selection segment achieved revenue of 2.3 billion RMB in the six months ending November 30, 2025, a year-on-year increase of 5.7%, and turned a profit with a net profit of 239 million RMB [5]. Group 2: Financial Guidance and Shareholder Returns - The company expects overall net revenue for FY26Q3 to be between $1.31 billion and $1.349 billion, reflecting a year-on-year growth of 11%-14% [5]. - Full-year net revenue guidance for FY26 has been raised to $5.292 billion to $5.488 billion, indicating a year-on-year growth of 8%-12% [5]. - The board has approved a cash dividend of $0.12 per share (equivalent to $1.20 per ADS) and initiated a $300 million share buyback program, demonstrating management's confidence in future growth [5]. Group 3: Operational Efficiency - Non-GAAP operating profit for FY26Q2 was $89.13 million, a significant increase of 206.9% year-on-year, with an operating profit margin of 7.5%, up 4.7 percentage points [7]. - The improvement in profitability is attributed to a focus on core operations, avoiding blind expansion, and optimizing market expenditure [7]. - Cost reduction and efficiency enhancement measures are being implemented in two phases, with the first phase focusing on reducing unnecessary costs and the second phase leveraging organizational restructuring and AI technology [7].

智通财经APP获悉，周四，好未来(TAL.US)大涨逾12%，报12.13美元。好未来公布截止至2025年11月30 日的2026财年第三季度业绩。非GAAP每股收益为0.25美元，超出预期0.17美元。营收为7.7017亿美元， 同比增长27%，超出预期417万美元。 ...

Core Viewpoint - The company, TAL Education Group, reported strong financial growth in its third quarter for the fiscal year 2026, with significant increases in both revenue and net profit compared to the previous year [1]. Financial Performance - For the third quarter, the company's net revenue was $770 million, up from $606 million in the same period last year [1]. - The net profit attributable to TAL Education Group was $131 million, compared to $23.07 million in the prior year [1]. - Basic and diluted net profit per ADS were $0.24 and $0.23, respectively [1]. - For the nine months ending November 30, 2025, net revenue reached $2.207 billion, an increase from $1.640 billion year-over-year [1]. - The net profit attributable to the company for the nine months was $286 million, up from $91.90 million in the same period last year [1]. - As of November 30, 2025, the company had a total balance of cash, cash equivalents, and short-term investments amounting to $3.617 billion [1]. Strategic Focus - The company's President and CFO, Peng Zhuangzhuang, emphasized the commitment to integrating technology into the learning experience and continuously optimizing content, products, and services for the holistic development of students [1]. - The company plans to continue advancing its strategic initiatives, flexibly allocating resources to build competitive advantages and create value for users and society [1].

Investment Rating - The investment rating for the company is "Buy" [5][4]. Core Insights - The company reported a total revenue of $1.191 billion for Q2FY26, representing a year-over-year increase of 14.7%, exceeding the guidance upper limit of 12% [1]. - Adjusted operating profit for Q2 was $89 million, with an operating profit margin (OPM) of 7.5%, which is a year-over-year increase of 4.7 percentage points, significantly surpassing Bloomberg consensus expectations [1][2]. - The company expects total revenue growth of 11-14% for Q3FY26 and 8-12% for the full fiscal year, reflecting improvements in teaching quality, returning demand, and favorable exchange rates [1][2]. - The core K12 business is showing robust growth, and the company is expected to gradually improve profit margins through cost reduction and efficiency enhancements, aiming to provide stable returns to shareholders in the long term [1][4]. Summary by Sections Financial Performance - For Q2FY26, the company achieved a revenue of $1.191 billion, with a year-over-year growth of 14.7% [1]. - The adjusted operating profit margin increased to 7.5%, which is a 4.7 percentage point improvement from the previous year [2]. - The company has slightly raised its non-GAAP net profit forecasts for FY26, FY27, and FY28 to $578 million, $681 million, and $756 million, respectively [8][4]. Business Segments - The K12 segment is experiencing a return to normal pricing competition, with new business revenues growing by 21.6% year-over-year in Q2 [2]. - The revenue from university and adult education increased by 12.8%, while study abroad training revenue grew by 4.1% [2]. - The company plans to merge its study abroad consulting and training businesses by the end of FY26, which is expected to streamline operations and enhance efficiency [3]. Valuation and Price Target - The target price for the company is set at $65.43 per share, based on an 18x FY26 PE ratio, reflecting the stability of its core business and leading shareholder returns in the industry [4][8]. - The previous target price was $67.31, indicating a slight adjustment based on updated profit forecasts [4][8].

Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company reported FY26Q2 net revenue of $119.1 million, a year-on-year increase of 14.7%, with net profit attributable to shareholders at $4.55 million, up 42.3%, and Non-GAAP net profit at $7.29 million, reflecting a 68.6% increase [2] - The revenue exceeded expectations primarily due to the recovery in new education business and the revival of Dongfang Zhenxuan, with profit growth outpacing revenue growth due to a 1.2 percentage point increase in gross margin and a 2.6 percentage point decrease in sales expense ratio [2] - The company has successfully advanced its shareholder return plan, having fully paid the first cash dividend of $0.06 per ordinary share and initiated a $300 million share buyback plan, repurchasing approximately 1.6 million ADS for a total consideration of about $86.3 million as of January 27, 2026 [2] Summary by Relevant Sections Business Performance - Non-academic business showed a recovery with a 6.4% increase in enrollment and a 10.2% rise in deferred revenue in the first half of the year. The new education business grew by 21.6% year-on-year in FY26Q2, significantly up from 15.3% in FY26Q1, driven by a focus on core education services and improved teaching quality [3] - The deferred revenue balance reached $2.162 billion, a 10.2% year-on-year increase, slightly up from 10.0% in FY26Q1 [3] Profitability Metrics - The company's gross margin and net profit margin for FY26Q2 were 53.3% and 3.8%, respectively, reflecting year-on-year increases of 1.2 and 0.7 percentage points. The sales and management expense ratios decreased by 2.6 and 0.1 percentage points, respectively [4] Financial Guidance - The company provided FY26Q3 guidance for revenue growth of 11-14% in USD terms, with an annual revenue growth forecast of 5%-10% for FY26. New business is expected to grow by 20%-25%, while high school business is projected to grow by 13% [5] - Long-term, the company is positioned as a rare national leader with stable core education revenue, focusing on cost reduction and efficiency improvements, which are expected to enhance profit margins [5] - The company maintains its revenue forecasts for FY26-28 at $5.297 billion, $5.778 billion, and $6.296 billion, respectively, and net profit forecasts at $458 million, $526 million, and $577 million, respectively, corresponding to EPS of $0.28, $0.32, and $0.35 [5]

Financial Data and Key Metrics Changes - The company's net revenues for Q3 FY 2026 were $770.2 million, representing a year-over-year increase of 27.0% in USD and 26.8% in RMB terms [10][15] - Non-GAAP income from operations was $104.0 million, compared to a non-GAAP loss from operations of $1.9 million in the same period last year [18] - Gross profit increased by 35.0% year-over-year to $431.8 million, with gross margin rising to 56.1% from 52.7% [16][18] Business Line Data and Key Metrics Changes - Peiyou Small Class Enrichment Programs showed stable operations with year-over-year growth driven by increased enrollment [11] - Online enrichment learning programs maintained year-over-year growth, leveraging technology-driven innovations to enhance user engagement [12] - The learning device business reported year-over-year growth in both revenue and sales volume, with an average weekly active rate of approximately 80% [13][14] Market Data and Key Metrics Changes - The learning device market is evolving with advancements in hardware, software, and AI technologies, leading to a highly competitive environment [7][8] - The company is focusing on enhancing its devices with AI-enabled capabilities to improve user learning experiences [8][9] Company Strategy and Development Direction - The company aims to integrate technology with its industry expertise to enhance product design and service delivery [20] - A focus on long-term sustainable development is emphasized, with a commitment to building capabilities across core business lines [22] - The company is exploring new product formats and enhancing AI functions to support personalized learning experiences [9][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledges potential variability in financial performance due to seasonal demand shifts and competitive pressures [5] - The company remains focused on long-term capabilities despite short-term fluctuations in financial performance [5][22] - There is an expectation of moderated revenue growth in the second half of FY 2026 due to a higher comparison base [30] Other Important Information - The company has authorized a new share repurchase program, allowing for up to $600 million in common share purchases over the next 12 months [19] - As of November 30, 2025, the company had $2,146.3 million in cash and cash equivalents [19] Q&A Session Summary Question: Update on Learning Center network expansion and Peiyou revenue drivers - Management indicated that Peiyou offline enrichment programs delivered year-over-year revenue growth aligned with Learning Center network expansion, driven by increased enrollments [24][25] Question: Reasons for top-line growth slowdown and revenue outlook for learning devices - The moderation in growth was attributed to a deceleration in the learning device business and timing of product launches affecting sales patterns [28][30] Question: Q3 sales performance of learning devices and competitive landscape - Year-over-year volume growth was noted, with the learning device business still in an investment phase, reporting an adjusted operating loss [32][33] Question: Drivers of operating margin performance and outlook - The improvement in operating margin was driven by lower selling and marketing expenses and disciplined cost management across business lines [37][39]