Core Viewpoint - Guosen Securities maintains an "outperform" rating for New Oriental-S (09901) and raises the company's net profit forecast for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million respectively, with the latest market capitalization corresponding to PE ratios of 19.5, 17.0, and 15.2 times [1] Group 1: Revenue and Profitability - In FY2026Q2, the company achieved net revenue of $1.191 billion, a year-on-year increase of 14.7%, exceeding market expectations of 12% [1] - The company reported a non-GAAP operating profit of $89.13 million, reflecting a significant increase of 206.9% [1] - Deferred revenue reached $2.162 billion, marking a year-on-year growth of 10.2% [1] Group 2: New Education and Overseas Study Business - The new education business remains a core growth driver, benefiting from an increase in renewal rates, which grew by 21.6% year-on-year, accelerating from 15.3% in FY26Q1 [2] - Non-subject tutoring services covered approximately 1.058 million students, a year-on-year increase of 6.4% [2] - The overseas study-related business showed resilience, with total revenue slightly increasing year-on-year, outperforming previous market expectations of a 5% decline [2] Group 3: Quality Development and Operational Efficiency - As of FY26Q2, the company had 1,379 teaching locations, a 2% increase, continuing its cautious expansion strategy focused on high-quality development [3] - The non-GAAP operating profit margin improved by 4.7 percentage points to 7.5% year-on-year [3] - Gross margin was reported at 53.3%, an increase of 1.3 percentage points, while the management expense ratio remained stable at 31.4% [3] Group 4: Future Outlook - For FY2026Q3, the company expects a year-on-year revenue growth of 11-14% and has raised its full-year revenue growth guidance to 8-12%, up from the previous estimate of 5-10% [4]

Core Viewpoint - Guosen Securities maintains an "outperform" rating for New Oriental-S (09901) and raises the company's net profit forecast for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million, respectively, with the latest market capitalization corresponding to PE ratios of 19.5x, 17.0x, and 15.2x [1] Group 1: Revenue and Profitability - In FY2026Q2, the company achieved net revenue of $1.191 billion, a year-on-year increase of 14.7%, exceeding market expectations of 12% [1] - The company reported a significant increase in operating profit to $89.13 million, up 206.9% year-on-year, indicating continuous improvement in profitability [1] - Deferred revenue reached $2.162 billion, reflecting a year-on-year growth of 10.2% [1] Group 2: New Education and Study Abroad Business - The new education business remains a core growth driver, benefiting from an increase in retention rates, which grew by 21.6% year-on-year, accelerating from 15.3% in FY26Q1 [2] - Non-academic tutoring services reached approximately 1.058 million students, a 6.4% increase, as the company focuses on improving teaching quality and retention rates [2] - The study abroad-related business showed resilience, with total revenue slightly increasing year-on-year, outperforming previous market expectations of a 5% decline [2] Group 3: Quality Development and Operational Efficiency - As of FY26Q2, the company had 1,379 teaching locations, a 2% increase, continuing its cautious expansion strategy focused on high-quality development [3] - The Non-GAAP operating profit margin improved by 4.7 percentage points to 7.5%, with a gross margin of 53.3%, up 1.3 percentage points [3] - The company plans to enhance profitability through organizational optimization and technological advancements [3] Group 4: Future Outlook - For FY2026Q3, the company expects a year-on-year revenue growth of 11-14%, with an upward revision of the full-year revenue growth forecast to 8-12%, previously estimated at 5-10% [3]

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4]. Core Insights - The company has adjusted its revenue growth guidance for the fiscal year 2026, now expecting a growth rate of 8-12%, up from the previous estimate of 5-10% [4][20]. - The company reported a significant increase in net revenue for FY2026Q2, achieving $1.191 billion, which represents a year-on-year growth of 14.7%, exceeding market expectations [2][9]. - The Non-GAAP operating profit reached $89.13 million, marking a substantial increase of 206.9% year-on-year, indicating continuous improvement in profitability [2][9]. - Deferred revenue stood at $2.162 billion, reflecting a year-on-year growth of 10.2%, which lays a solid foundation for future revenue recognition [2][9]. Revenue and Business Performance - The new education business remains the core growth driver, with a year-on-year revenue increase of 21.6%, benefiting from improved renewal rates [2][13]. - The number of active paid users for the smart learning system reached 352,000, showing a year-on-year growth of 34.9% [2][13]. - The company has 1,379 teaching centers, reflecting a cautious expansion strategy with a 2% quarter-on-quarter increase [3][18]. - The adult and university student-related business saw a year-on-year revenue growth of 12.8%, although the growth rate slightly declined compared to the previous quarter [2][13]. Financial Projections - The company has revised its net profit forecasts for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million, respectively, up from previous estimates [4][21]. - The latest market capitalization corresponds to a price-to-earnings (P/E) ratio of 19.5 for 2026, 17.0 for 2027, and 15.2 for 2028 [4][21]. - The expected revenue for FY2026 is projected to be $5.47 billion, with a year-on-year growth of 11.6% [5][23].