Core Insights - New Oriental achieved net revenue of $1.191 billion in FY26Q2, 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 [1] - The company has raised its full-year revenue guidance for FY26 to between $5.292 billion and $5.488 billion, reflecting a year-on-year growth of 8% to 12% [2] - The board has approved a cash dividend of $0.12 per share and initiated a $300 million share buyback program, indicating management's confidence in future growth [2] Business Performance - The overseas examination preparation business saw a revenue increase of 4.1% year-on-year, while domestic examination preparation for adults and university students grew by 12.8% year-on-year, contributing significantly to core revenue [1] - New educational businesses reported a revenue increase of 21.6% year-on-year, with non-subject tutoring services operating in approximately 60 cities and attracting around 1.058 million registrations [1] - The "Oriental Selection" segment generated 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 of 239 million RMB [1] 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 year-on-year [2] - The improvement in profitability is attributed to a focus on core operations, cost reduction measures, and efficiency enhancements through organizational restructuring and AI technology [2] Future Outlook - 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% to 14% [2] - Continued revenue growth and ongoing cost optimization efforts are anticipated to further improve operating profits in the future [2] Profit Forecast and Valuation - The profit forecasts for the fiscal years 2026-2028 have been raised to $497 million, $585 million, and $680 million, respectively, with corresponding EPS estimates of $0.31, $0.37, and $0.43 [3] - The current stock price corresponds to a PE ratio of 18x for FY26, 15x for FY27, and 13x for FY28, reflecting the company's position as a leader in the education and training industry [3]

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].

Investment Rating - The report upgrades the investment rating of New Oriental-S (9901.HK) to "Buy" [1] Core Insights - FY26Q2 revenue reached USD 1.191 billion, a year-on-year increase of 14.7%, exceeding previous guidance. Net profit attributable to shareholders was USD 45.45 million, up 42.3% year-on-year, while Non-GAAP net profit attributable to shareholders was USD 72.90 million, reflecting a 68.6% increase year-on-year [5][6] - The company has raised its full-year revenue guidance for FY26 to USD 5.292-5.488 billion, representing a year-on-year growth of 8%-12%, up from the previous guidance of 5%-10% [7] - The company plans to distribute a cash dividend of USD 0.12 per share and has initiated a USD 300 million share buyback program, indicating management's confidence in future growth [7] Revenue Performance - The revenue breakdown for FY26Q2 shows: 1) Overseas business revenue grew by 4.1% year-on-year, focusing on core exam preparation needs 2) Domestic exam preparation for adults and university students saw a 12.8% year-on-year increase, becoming a core revenue support 3) New educational businesses reported a 21.6% year-on-year revenue growth, with significant expansion in non-subject tutoring across approximately 60 cities [6] 4) Dongfang Zhenxuan achieved revenue of RMB 2.3 billion in the six months ending November 30, 2025, a 5.7% year-on-year increase, and turned a profit of RMB 239 million [6] Profitability and Efficiency - FY26Q2 Non-GAAP operating profit was USD 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 year-on-year [8] - The improvement in profitability is attributed to a focus on core operations, cost reduction measures, and efficiency optimization through organizational restructuring and AI technology [8] Earnings Forecast and Valuation - The earnings forecast for FY26-28 has been revised upwards, with net profit estimates of USD 497 million, USD 585 million, and USD 680 million for FY26, FY27, and FY28 respectively, reflecting increases of 33.8%, 17.7%, and 16.2% [9] - The projected EPS for FY26-28 is USD 0.31, USD 0.37, and USD 0.43, with corresponding P/E ratios of 18x, 15x, and 13x, indicating a strong position in the education and training industry [9][10]

Company Overview: New Oriental Education & Technology Group Key Financial Metrics - Revenue for FY2026 Q2 reached $1.191 billion, representing a year-over-year increase of 14.7% [1] - Operating profit was $66 million, showing a significant year-over-year growth of 244.4% [1] - Non-GAAP operating profit stood at $89 million, reflecting a year-over-year increase of 206.9% [1] - Net profit attributable to shareholders was $46 million, up 42.3% year-over-year [1] - Non-GAAP net profit attributable to shareholders was $73 million, with a year-over-year increase of 68.6% [1] Business Segment Performance - The overseas exam preparation segment grew by 4.1% year-over-year [1] - Domestic adult exam preparation and university student business increased by 12.8% year-over-year [1] - New education business saw a growth of 21.6% year-over-year [1] - Non-academic training had 1.058 million students in Q2 [1] - Active paid users for smart learning systems and devices reached 352,000 [1] Operational Metrics - The company's operating profit margin (OPM) for Q2 was 5.6%, compared to 1.9% in the same period last year [1] - Non-GAAP OPM increased to 7.5%, a rise of 470 basis points year-over-year [1] Cash and Investment Position - As of January 27, 2026, the company repurchased approximately 1.6 million American Depositary Shares under the new share repurchase plan, totaling about $86 million [2] - Cash and cash equivalents at the end of the period were $1.843 billion, with time deposits of $1.610 billion and short-term investments of $1.875 billion [2] - Contract liabilities as of the end of November 2025 were $2.162 billion, reflecting a year-over-year increase of 10.2% [2] Future Guidance - The company expects FY2026 Q3 revenue to be between $1.313 billion and $1.349 billion, representing a year-over-year growth of 11% to 14% [2] - Full-year revenue guidance for FY2026 has been raised to between $5.292 billion and $5.488 billion, indicating a year-over-year increase of 8% to 12%, up from the previous guidance of 5% to 10% [2]

Core Viewpoint - New Oriental reported a significant increase in its financial performance for the second quarter of fiscal year 2026, indicating strong growth across various business segments [1] Financial Performance - Net revenue reached $1.191 billion, representing a year-on-year increase of 14.7% [1] - Operating profit was $66.3 million, showing a substantial year-on-year growth of 244.4% [1] - Net profit attributable to shareholders was $45.5 million, up 42.3% compared to the previous year [1] Business Segments - Revenue from overseas exam preparation business grew by approximately 4.1% year-on-year [1] - Domestic exam preparation business for adults and college students saw a year-on-year increase of about 12.8% [1] - New education business achieved a year-on-year growth of 21.6% [1] Student Engagement - Non-academic tutoring courses have been launched in around 60 cities, attracting approximately 1.058 million students [1] - Smart learning systems and devices have been implemented in about 60 cities, with active paying users reaching 352,000 [1]

Core Viewpoint - New Oriental's financial performance for the second quarter of fiscal year 2026 shows significant growth, with net revenue increasing by 14.7% year-on-year to $1.191 billion, and operating profit rising by 244.4% to $66.3 million [1] Financial Performance - For the first half of fiscal year 2026, net revenue reached approximately $2.714 billion, a year-on-year increase of 9.7% - Operating profit for the same period was approximately $377 million, up 20.7% year-on-year - Net profit attributable to shareholders was approximately $286 million, reflecting a 3.2% year-on-year growth [1] Business Segments - Revenue from overseas exam preparation increased by approximately 4.1% year-on-year - Domestic exam preparation for adults and college students grew by about 12.8% year-on-year - New education business achieved a year-on-year growth of 21.6% - Non-academic tutoring courses have been launched in around 60 cities, attracting approximately 1.058 million students - The smart learning system and devices have been implemented in about 60 cities, with active paying users reaching approximately 352,000 [2] Strategic Initiatives - The company is focusing on enhancing core educational services, improving teaching quality and product standards, and optimizing cost structures and operational efficiency - A comprehensive cross-department customer service system has been initiated to enhance customer loyalty and retention, promote cross-department sales, and reduce customer acquisition costs [2] - The company is investing in AI technology and integrating it into existing educational products to improve operational efficiency and support for teaching teams [2] Shareholder Returns - The board has approved a cash dividend of $0.12 per ordinary share (or $1.20 per American Depositary Share), to be distributed in two installments as part of the fiscal year 2026 shareholder return plan - The first installment has been fully distributed, with the second installment to be announced later [3] Share Buyback Program - As part of the shareholder return plan, the company announced a share buyback program, authorizing up to $300 million in American Depositary Shares or ordinary shares over the next 12 months - As of January 27, 2026, approximately 1.6 million American Depositary Shares have been repurchased at a total cost of about $86.3 million [3] Future Outlook - The company expects net revenue for the third quarter of fiscal year 2026 (from December 1, 2025, to February 28, 2026) to be between $1.313 billion and $1.349 billion, representing a year-on-year growth rate of 11% to 14% [3]

Core Viewpoint - New Oriental's financial performance for the second quarter of fiscal year 2026 shows significant growth, with net revenue increasing by 14.7% year-on-year to $1.191 billion, and operating profit rising by 244.4% to $66.3 million [1] Financial Performance - For the first half of fiscal year 2026, net revenue reached approximately $2.714 billion, a year-on-year increase of 9.7% - Operating profit for the same period was approximately $377 million, up 20.7% year-on-year - Net profit attributable to shareholders was approximately $286 million, reflecting a 3.2% year-on-year growth [1] Business Segments - Revenue from overseas exam preparation increased by approximately 4.1% year-on-year - Domestic exam preparation for adults and college students grew by about 12.8% year-on-year - New education business achieved a year-on-year growth of 21.6% - Non-subject tutoring courses have been launched in around 60 cities, attracting approximately 1.058 million students [2] Strategic Initiatives - The company is focusing on enhancing core educational services and improving teaching quality and product standards - A comprehensive cross-departmental customer service system has been initiated to boost customer loyalty and retention, while also reducing customer acquisition costs [2] - The company is investing in AI technology and integrating it into existing educational products to enhance operational efficiency [2] Shareholder Returns - The board has approved a cash dividend of $0.12 per ordinary share (or $1.20 per American depositary share), to be distributed in two installments as part of the shareholder return plan for fiscal year 2026 [3] - A share buyback plan has been announced, authorizing the repurchase of up to $300 million of American depositary shares or ordinary shares within the next 12 months [3] Future Outlook - For the third quarter of fiscal year 2026, the company expects net revenue to be between $1.313 billion and $1.349 billion, representing a year-on-year growth rate of 11% to 14% [3]

Core Viewpoint - The company is facing challenges due to a slowdown in overseas business but has managed to improve its Non-GAAP operating profit margin through cost optimization and operational efficiency efforts [2]. Financial Performance - The company reported a first-quarter revenue of $1.52 billion and estimates that total revenue for the fiscal year could reach up to $5.4 billion [4]. - For the second quarter, the company expects revenue to be between $1.132 billion and $1.163 billion, representing a year-over-year increase of 9% to 12% [2]. - The full-year revenue forecast is between $5.145 billion and $5.39 billion, indicating a year-over-year growth of 5% to 10% [2]. Business Segments - The growth in the company's new education business has slowed, dropping from 32% in the previous fiscal year's fourth quarter to 15.3% in the current fiscal year [3]. - The company anticipates a 5% to 10% growth in its overseas exam preparation business for the fiscal year, while revenue from study abroad consulting is expected to remain flat, a significant slowdown from previous double-digit growth [3]. Market Position and Outlook - The company has established an efficient structure and system, with a strong operational record and brand effect, led by a capable management team [3]. - Despite current challenges and a stock price around HKD 50 with a price-to-earnings ratio of 25, the company remains a significant player in the industry and is worth monitoring for long-term potential [3].

Core Insights - New Oriental achieved net revenue of $1.523 billion in FY26Q1, a year-on-year increase of 6.1%, exceeding previous guidance [1] - The company reported a net profit attributable to shareholders of $240,700, a decrease of 1.9% year-on-year, while Non-GAAP net profit was $258 million, down 1.6% [1] - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9%-12% [2] Business Performance - The overseas business segment saw revenue growth of 1.0% for exam preparation and 2.0% for consulting, with slower growth rates [1] - Domestic exam preparation for adults and college students grew by 14.4%, indicating strong performance [1] - New educational business revenue increased by 15.3%, although growth was impacted by intensified competition during the summer [1] Financial Guidance and Shareholder Returns - The company maintains its full-year net revenue guidance for FY26 at $5.145 billion to $5.390 billion, reflecting a year-on-year growth of 5%-10% [2] - A three-year shareholder return plan has been initiated, committing at least 50% of the previous fiscal year's net profit to shareholder returns, including a $190 million cash dividend and a $300 million share buyback [2] Operational Efficiency - Non-GAAP operating profit for FY26Q1 was $336 million, up 11.3% year-on-year, with an operating profit margin of 22.0%, an increase of 1.0 percentage points [2] - The improvement in profit margins is attributed to ongoing cost optimization and enhanced operational efficiency [2] - The company is focusing on prudent capacity expansion, advancing the OMO teaching system, and increasing the application of AI technology to improve overall operational efficiency [2] Profit Forecast and Valuation - The company has adjusted its net profit forecasts for FY26-28 to $442 million, $514 million, and $582 million, respectively, each down by 8% [3] - Corresponding EPS for FY26-28 is projected at $0.28, $0.33, and $0.37, with current stock prices reflecting PE ratios of 22x, 19x, and 16x [3] - The company remains a leader in the education and training industry, with strong demand persisting [3]

Core Viewpoint - The company reported a steady growth in its core business for FY26Q1, with a revenue guidance for Q2 indicating an acceleration in growth compared to Q1 [4][5][6]. Group 1: Financial Performance - For FY26Q1, the company achieved a net revenue of $1.523 billion, representing a year-on-year increase of 6.1% [4][5]. - The net profit attributable to shareholders was $240,700, a decrease of 1.9% year-on-year, while the Non-GAAP net profit was $258 million, down 1.6% year-on-year [4][5]. - The Non-GAAP operating profit for FY26Q1 was $336 million, reflecting an 11.3% increase year-on-year, with an operating profit margin of 22.0%, up 1.0 percentage point [7]. Group 2: Business Segments - The overseas business segment saw a revenue increase of 1.0% for exam preparation and 2.0% for consulting, with growth rates slowing down [5]. - Domestic exam preparation for adults and university students experienced a robust growth of 14.4% year-on-year [5]. - New educational business revenue grew by 15.3% year-on-year, although the growth rate was impacted by intensified competition during the summer [5]. Group 3: Future Outlook - The company expects overall net revenue for FY26Q2 to be between $1.132 billion and $1.163 billion, indicating a year-on-year growth of 9%-12% [6]. - The full-year net revenue guidance for FY26 is maintained at $5.145 billion to $5.390 billion, representing a year-on-year growth of 5%-10% [6]. - A three-year shareholder return plan has been initiated, with at least 50% of the previous fiscal year's net profit allocated for shareholder returns, including a cash dividend of $190 million and a $300 million share buyback plan [6]. Group 4: Operational Efficiency - The company has made significant strides in cost optimization and operational efficiency, which contributed to the improvement in profit margins despite challenges in overseas business [7][8]. - The implementation of an OMO teaching system and increased use of AI technology in the educational ecosystem and internal operations have effectively enhanced overall operational efficiency [7][8].