Core Viewpoint - The company is expected to see a revenue increase of 12.2% year-on-year in Q2 FY26, driven by strong performance in its education and new business segments, despite challenges in its study abroad services [1][2]. Group 1: Financial Performance - Q2 FY26 revenue is projected at $1.165 billion, with education business (including cultural tourism) contributing $957 million, a growth of 11% year-on-year [1]. - Non-GAAP net profit is expected to reach $63 million, reflecting a significant year-on-year increase of 77.8%, with a Non-GAAP net profit margin of 5.4%, expanding by 2 percentage points [1]. - New business revenue (K9 competency training and learning machine) is anticipated to grow by 21% year-on-year to $364 million, indicating sustained high growth in non-academic sectors [2]. Group 2: Business Segments - The study abroad training and consulting business is expected to generate $242 million in revenue, a decline of 3% year-on-year, with a slowdown in growth rate compared to the previous year [1]. - The company is adapting its high-end one-on-one study abroad training model to a one-to-many format to lower costs and is expanding its youth study abroad training services to enhance growth resilience [1]. - The number of teaching locations is projected to increase to 1,368, a 20% year-on-year growth, although the growth rate has slowed by 3.7 percentage points compared to Q1 FY26 [2]. Group 3: Profitability and Efficiency - Despite the slowdown in high-margin study abroad business, the profitability of competency training is expected to offset this decline, leading to an improvement in overall operating profit margins [2]. - Non-GAAP operating profit margin is projected to expand by approximately 2 percentage points to 4.7% in Q2 FY26, indicating a trend of accelerating margin expansion [2]. - The education business's Non-GAAP operating profit margin is expected to reach 4.1%, with an increase of 0.9 percentage points year-on-year, while other businesses (mainly Dongfang Zhenxuan) are expected to achieve a Non-GAAP operating profit margin of 8%, up by 8.5 percentage points [2]. Group 4: Future Outlook - The company maintains revenue forecasts for FY26-FY28 at $5.38 billion, $5.98 billion, and $6.73 billion, respectively, with expectations of a recovery in profit margins as the study abroad business stabilizes [3]. - The target price is set at $69.9, corresponding to HKD 54.9 per share, with an upgrade to a buy rating reflecting confidence in the company's growth trajectory [3].

Core Viewpoint - The report from Shenwan Hongyuan maintains revenue projections for New Oriental-S (09901) for FY26-FY28 at $5.38 billion, $5.98 billion, and $6.73 billion, respectively, with expectations of profit margin pressure easing as the overseas study business stabilizes [1] Group 1: Financial Performance - Shenwan Hongyuan expects New Oriental's revenue for 2QFY26 to reach $1.165 billion, representing a year-on-year growth of 12.2% [2] - The education business (including cultural tourism) is projected to generate $957 million in revenue, up 11% year-on-year, while other businesses (mainly Dongfang Zhenxuan) are expected to achieve $208 million, growing 18% year-on-year [2] - The estimated Non-GAAP net profit attributable to the parent company for 2QFY26 is $63 million, reflecting a significant year-on-year increase of 77.8% [2] Group 2: Overseas Study Business - The overseas examination training and consulting business is expected to generate $242 million in revenue for 2QFY26, a decline of 3% year-on-year, with a slowdown in growth of 33.3 percentage points compared to the same period last year [3] - The high-end one-on-one overseas examination training business faces challenges due to its premium pricing, prompting the company to adjust its model to one-to-many classes to lower costs and expand its service offerings [3] - The growth rate of the overseas study training and consulting business is anticipated to bottom out in 2QFY26 [3] Group 3: New Business Growth - New business revenue, including K9 competency training and learning machine services, is projected to grow by 21% year-on-year to $364 million in 2QFY26, driven by strong growth in non-academic competency services [4] - The company plans to enhance its product matrix by offering competency classes in elementary school and subscription services for learning machines in middle school to meet differentiated training needs [4] - The number of teaching sites is expected to increase to 1,368, a year-on-year growth of 20%, although the growth rate has slowed by 3.7 percentage points compared to 1QFY26 [4] Group 4: Operating Profit Margin - Despite the slowdown in high-margin overseas study business, the increase in competency business margins is expected to offset this impact [5] - The company is implementing measures such as workforce optimization and cost control, leading to an anticipated expansion of Non-GAAP operating profit margin by approximately 2 percentage points to 4.7% in 2QFY26 [5] - The Non-GAAP operating profit margin for the education business is projected to be 4.1%, reflecting a year-on-year increase of 0.9 percentage points, while the margin for other businesses (mainly Dongfang Zhenxuan) is expected to be 8%, up 8.5 percentage points year-on-year [5]

Investment Rating - The report upgrades the investment rating of New Oriental-S (09901) to "Buy" [1][13] Core Insights - The report highlights an expected revenue of $1.165 billion for 2QFY26, representing a year-over-year increase of 12.2% [4][9] - The education business, including cultural tourism, is projected to generate $957 million, up 11% YoY, while other businesses, primarily EastBuy, are expected to contribute $208 million, reflecting an 18% YoY increase [4][9] - Non-GAAP net profit attributable to shareholders is anticipated to reach $63 million, surging 77.8% YoY, with a non-GAAP net margin forecasted at 5.4%, expanding by 2 percentage points YoY [4][9] Revenue and Profit Forecast - Revenue for FY26 is maintained at $5.38 billion, with projections for FY27 and FY28 at $5.98 billion and $6.73 billion, respectively [6][13] - Non-GAAP net profit forecasts for FY26, FY27, and FY28 are $555 million, $610 million, and $679 million, respectively [6][13] Business Segment Performance - The overseas study business is expected to see a revenue decline of 3% YoY to $242 million in 2QFY26, with growth challenges in high-end one-on-one services [5][10] - New business segments, including K9 non-academic subject tutoring and learning tablets, are projected to grow 21% YoY to $364 million [5][11] - The number of learning centers is expected to increase to 1,368, up 20% YoY, although the growth rate is moderating [5][11] Margin Improvement - Non-GAAP operating margin is forecasted to expand by approximately 2 percentage points YoY to 4.7% in 2QFY26, with the education business margin at 4.1% and other businesses at 8% [6][12]

Core Insights - New Oriental's 1QFY26 revenue reached $1.523 billion, a year-on-year increase of 6.1%, with education business revenue (including cultural tourism) at $1.366 billion, up 8.5% year-on-year [1] - Non-GAAP operating profit was $336 million, reflecting an 11.3% year-on-year growth, with a Non-GAAP operating profit margin of 22%, expanding by 1.1 percentage points year-on-year [1] - The company announced a shareholder return plan, distributing $190 million in cash dividends and repurchasing up to $300 million in stock [1] Education Business Recovery - The revenue from overseas examination training and consulting reached $328 million, growing by 1% year-on-year, but the growth rate slowed by 19 percentage points compared to the same period last year [2] - The company is adjusting its 1-on-1 training model to a 1-to-many format to lower class prices and is expanding its youth overseas examination training services to enhance growth resilience [2] - New business segments, including K9 non-academic training and learning machines, maintained high growth, with revenue increasing by 15% to $403 million [2] Operating Profit Margin Improvement - Despite a slowdown in high-margin overseas study business growth, the increase in the profit margin of quality education business offset this decline [3] - The company implemented measures such as workforce reduction and cost control, with sales expenses at $200 million, up 3.6% year-on-year, and administrative expenses at $370 million, up 2.4% year-on-year, both growing slower than revenue [3] - The Non-GAAP operating profit margin expanded by 1 percentage point to 22%, continuing the trend from 4QFY25 [3] Rating and Future Guidance - The company projects a 2QFY26 revenue growth of 9-12% year-on-year, exceeding the full-year guidance of 5-10% growth [4] - The education business growth is expected to recover, driven by excellent teaching reputation, with a forecasted increase in renewal rates for regular classes [4] - Revenue forecasts for FY26-FY28 have been raised to $5.38 billion, $5.98 billion, and $6.73 billion, respectively, with Non-GAAP net profit estimates adjusted to $555 million, $610 million, and $679 million [4]

Investment Rating - The report maintains an "Outperform" rating for the company [2][9]. Core Insights - The company's revenue for Q1 FY26 reached $1.523 billion, a year-on-year increase of 6.1%, with the education business (including cultural tourism) generating $1.366 billion, up 8.5% year-on-year [6]. - Non-GAAP operating profit was $336 million, reflecting an 11.3% increase, with a Non-GAAP operating margin of 22%, expanding by 1.1 percentage points year-on-year [6][8]. - The company announced a shareholder return plan, distributing $190 million in cash dividends and repurchasing up to $300 million in stock [6]. Revenue and Business Performance - The overseas examination training and consulting business generated $328 million in revenue, growing 1% year-on-year, but the growth rate slowed by 19 percentage points compared to the previous year [7]. - New business segments, including K9 non-academic training and learning machines, maintained high growth, with Q1 revenue increasing 15% to $403 million [7]. - The number of teaching locations increased to 1,347, a 24% year-on-year growth, continuing the trend of high expansion [7]. Profitability and Financial Forecast - The company expects Q2 FY26 revenue to grow by 9-12% year-on-year, which is higher than the full-year guidance of 5-10% growth [9]. - Revenue forecasts for FY26-FY28 have been revised upwards to $5.38 billion, $5.98 billion, and $6.73 billion, respectively [9]. - Non-GAAP net profit estimates for FY26-FY28 have also been increased to $555 million, $610 million, and $679 million, respectively [9]. Financial Data Summary - The projected revenue and net profit figures for FY24 to FY28 are as follows: - FY24 Revenue: $4.314 billion, Net Profit: $464 million - FY25 Revenue: $4.900 billion, Net Profit: $517 million - FY26E Revenue: $5.383 billion, Net Profit: $555 million - FY27E Revenue: $5.978 billion, Net Profit: $610 million - FY28E Revenue: $6.725 billion, Net Profit: $679 million [10][12].

Group 1 - The core viewpoint of the article highlights New Oriental's financial performance in Q4 FY25, with total revenue of $1.243 billion, representing a year-on-year growth of 9.4% [1] - The education business, including cultural tourism, generated $1.083 billion in revenue, showing a year-on-year increase of 18.7% [1] - The company's Non-GAAP net profit attributed to the parent company was $98 million, up 59.4% year-on-year, with a Non-GAAP net profit margin of 7.9%, expanding by 2.5 percentage points year-on-year [1] Group 2 - The study abroad business is experiencing a slowdown, with revenue from overseas exam training and consulting reaching $315 million, a year-on-year growth of 11%, which is a deceleration of 6.5 percentage points compared to the same period last year [1] - The company is adjusting its one-on-one training model to a one-to-many format to lower class prices and is expanding its services to include youth overseas exam training to enhance growth resilience [1] Group 3 - New business segments, including K9 competency training and learning machine services, saw a revenue increase of 32.5% to $307 million, driven by sustained high growth in non-subject competency services [2] - The company plans to expand its educational network to 1,318 locations, a year-on-year increase of 28.6%, indicating continued high growth [2] - The Non-GAAP operating profit margin for the education business is expected to expand by approximately 4.1 percentage points to 6.5% in Q4, reversing the declining trend from Q3 [2] Group 4 - Due to the slowdown in education business growth, the company expects Q1 FY26 revenue to grow only 2-5% year-on-year, with an annual growth forecast of 5-10% [3] - The company has revised its revenue forecasts for FY26 and FY27 to $5.28 billion and $5.79 billion, respectively, down from previous estimates [3] - The DCF target price has been lowered to $53.4, corresponding to a PE ratio of 15.6x for FY26 and a PEG ratio of 1.64x [3]

Group 1 - The core viewpoint indicates that New Oriental's revenue for Q4 FY25 is expected to be $1.186 billion, representing a year-on-year growth of 4.4% [1] - The education business, including cultural tourism, is projected to generate $1.034 billion in revenue, with a year-on-year increase of 13.3% [1] - Other businesses, primarily Oriental Selection, are expected to see revenue decline to $152 million, a decrease of 32.1% year-on-year [1] Group 2 - The study anticipates that the overseas examination training and consulting business will generate $298 million in revenue for Q4 FY25, reflecting a year-on-year growth of 5%, but a slowdown compared to previous periods [1] - The company is adjusting its high-end one-on-one training model to a one-to-many format to lower class prices and is expanding its youth overseas examination training services to enhance growth resilience [1] Group 3 - New business revenue, including K9 competency training and learning machine services, is expected to grow by 34% year-on-year to $311 million in Q4 [2] - The number of teaching outlets is projected to increase to 1,251, a year-on-year growth of 22%, indicating sustained expansion [2] - The company is implementing cost control measures and operational efficiency improvements, leading to an expected Non-GAAP operating profit margin expansion to 3% in Q4 [2] Group 4 - The revenue forecast for FY25-FY27 has been slightly adjusted downwards to $4.84 billion, $5.8 billion, and $7.03 billion, respectively, due to slower growth in the overseas study business [3] - Non-GAAP net profit estimates for FY25-FY27 have been revised upwards to $467 million, $575 million, and $710 million, respectively, reflecting improved cost control [3] - The DCF target price has been raised to $76.3, corresponding to a PE ratio of 17.1 for FY25 [3]

Investment Rating - The investment rating for the company is maintained as "Buy" [1] Core Insights - The report highlights that the growth rate of the study abroad business has reached a bottom, and cost reduction actions are alleviating pressure on profit margins [6] - The company reported a revenue of $1.183 billion for 3QFY25, a year-on-year decrease of 2%, while non-selection business (education + cultural tourism) achieved revenue of $1.04 billion, a year-on-year increase of 21.2% [4] - The Non-GAAP net profit attributable to the parent company was $113 million, down 14.3% year-on-year, with a Non-GAAP net profit margin of 9.6%, narrowing by 1.4 percentage points year-on-year [4] Summary by Sections Study Abroad Business - The growth of the study abroad business has slowed, with revenue from overseas exam training and consulting reaching $296 million, a year-on-year increase of 11.4%, which is a slowdown of 35.4 percentage points compared to the same period last year [5] - The high-end one-on-one training business is facing challenges due to its premium pricing, and the demand for studying abroad is returning to normal after the rapid release of pent-up demand from the pandemic [5] New Business Growth - New business revenue (K9 quality training + learning machine business) grew by 34.5% year-on-year to $325 million [5] - The company is expanding its service offerings to enhance the resilience of its study abroad business by adjusting class types and increasing youth overseas exam training services [5] Profitability and Financial Projections - The Non-GAAP operating profit margin for non-selection business narrowed by 1.8 percentage points to 13.3% due to the slowdown in the high-margin study abroad business [6] - The report projects Non-GAAP net profits for FY25, FY26, and FY27 to be $454 million, $534 million, and $636 million respectively, with a DCF target price of $74.8 [6][8]