Core Insights - New Oriental achieved net revenue of $1.243 billion in FY25Q4, a year-on-year increase of 9.4%, while net profit attributable to shareholders was $7.1 million, down 73.7% year-on-year [1] - The core education business remained stable, but revenue growth guidance for FY26Q1 has decreased [1][2] - The company expects FY26Q1 net revenue to be between $1.464 billion and $1.507 billion, representing a year-on-year growth of 2%-5% [2] Revenue Breakdown - Excluding revenue from self-operated products and live e-commerce, FY25Q4 net revenue was $1.0885 billion, up 18.7% year-on-year, surpassing previous guidance [1] - Revenue from overseas exam preparation increased by 14.6%, while overseas consulting revenue rose by 8.2% in FY25Q4 [1] - Domestic exam preparation for adults and college students saw a year-on-year revenue increase of 17.0% in FY25Q4 [1] New Business Developments - Revenue from new educational services grew by 32.5% year-on-year in FY25Q4, with approximately 918,000 registrations and 255,000 active paying users for smart learning systems [2] - The number of operational outlets exceeded 1,300 by the end of FY25Q4, with expansion plans on track [2] Profitability and Margin Analysis - FY25Q4 operating profit margin was -0.7%, down from 0.9% in the same period last year, primarily due to a one-time goodwill impairment of $60.3 million in the kindergarten business [3] - Non-GAAP operating profit margin for FY25Q4 was 6.6%, an increase of 3.3 percentage points year-on-year [3] - The company anticipates that despite challenges in FY26Q1, profitability may still see year-on-year growth due to the turnaround of the live e-commerce segment and ongoing cost reduction efforts [3] Future Outlook - The company has announced a three-year shareholder return plan, intending to return 50% of the previous fiscal year's net profit to shareholders through dividends or buybacks [2] - Profit forecasts for FY26 and FY27 have been adjusted downwards to $481 million and $559 million, respectively, reflecting a conservative outlook due to macroeconomic pressures [3]

Core Viewpoint - New Oriental's FY25Q4 net revenue reached $1.243 billion, a year-on-year increase of 9.4%, while the net profit attributable to shareholders was $7.1 million, a decrease of 73.7% [4] Group 1: Financial Performance - FY25Q4 core education business maintained stability with net revenue (excluding self-operated products and live e-commerce) at $1.0885 billion, up 18.7% year-on-year, exceeding previous guidance [5] - The company expects FY26Q1 overall net revenue to be between $1.464 billion and $1.507 billion, representing a year-on-year growth of 2%-5% [6] - FY25Q4 operating profit margin was -0.7%, down from 0.9% in the same period last year, primarily due to a one-time goodwill impairment of $60.3 million in the kindergarten business [7] Group 2: Business Segments - In FY25Q4, the overseas examination preparation business revenue grew by 14.6%, and the overseas consulting business revenue increased by 8.2% [5] - The new education business saw a revenue increase of 32.5% year-on-year, with approximately 918,000 registrations and 255,000 active paying users for smart learning systems [5] - The company announced a three-year shareholder return plan, intending to return 50% of the previous fiscal year's net profit to shareholders through dividends or buybacks [6] Group 3: Future Outlook - Despite a significant slowdown in revenue growth for the overseas business and increased competition, the profitability from the Oriental Selection is expected to positively contribute to overall earnings [8] - The company aims to improve overall profit margins in FY26Q1 through cost reduction and efficiency enhancement measures [8]

Investment Rating - The report downgrades the investment rating of the company to "Accumulate" [1] Core Views - The company's FY25Q4 net revenue reached USD 1.243 billion, a year-on-year increase of 9.4%, while the net profit attributable to shareholders was USD 7.1 million, a decrease of 73.7% [3][4] - The core education business showed steady growth, but the overseas and cultural tourism businesses negatively impacted profits [4][6] - The company expects FY26Q1 net revenue to be between USD 1.464 billion and USD 1.507 billion, representing a year-on-year growth of 2%-5%, indicating a significant slowdown compared to previous guidance [5][7] Summary by Sections Revenue Performance - FY25Q4 net revenue (excluding self-operated products and live e-commerce) was USD 1.0885 billion, up 18.7% year-on-year, exceeding previous guidance [4] - The overseas examination preparation business revenue grew by 14.6%, and the overseas consulting business revenue increased by 8.2% [4] - Domestic examination preparation for adults and university students saw a revenue increase of 17.0% [4] Profitability - FY25Q4 operating profit margin was -0.7%, down from 0.9% in the same period last year, primarily due to a one-time goodwill impairment of USD 60.3 million in the kindergarten business [6] - Non-GAAP operating profit margin for FY25Q4 was 6.6%, an increase of 3.3 percentage points year-on-year [6] Financial Forecasts - The company has revised down its net profit forecasts for FY26 and FY27 to USD 481 million and USD 559 million, respectively, reflecting a 10% and 18% reduction [7][8] - The projected EPS for FY26, FY27, and FY28 are USD 0.29, USD 0.34, and USD 0.38, respectively, with corresponding P/E ratios of 15x, 13x, and 12x [7][8]