Core Viewpoint - The internal letter from Yu Minhong, celebrating the 32nd anniversary of New Oriental, has sparked significant public backlash due to its perceived disconnect from the current struggles of employees, particularly regarding their work pressures and the company's financial performance [1][3][20]. Summary by Sections Internal Communication - Yu Minhong's letter emphasized themes of perseverance and gratitude, likening the company's journey to the resilience of penguins in Antarctica [2][3]. - The letter mentioned the need for New Oriental to become a "sower of hope" and for its various branches, including Dongfang Zhenxuan and New Oriental Tourism, to represent integrity and cultural enrichment [1][11]. Employee Reactions - Employees expressed dissatisfaction with the letter, feeling it failed to acknowledge their current challenges, particularly the pressures of KPIs and long working hours [2][3][20]. - Social media reactions included comments highlighting the disparity between Yu's Antarctic experience and the daily struggles of employees, leading to a sense of alienation [2][3]. Financial Performance - New Oriental's financial results showed a significant decline, with a 73.7% drop in net profit for the fourth quarter of the 2025 fiscal year, despite a 9.4% increase in revenue [17][19]. - The company faced increased operational costs and a record goodwill impairment of $60.3 million, contributing to the profit decline [17][19]. Market Response - Following the internal letter, New Oriental's stock price rose slightly, closing at $53.44, but the stock has seen a 16.2% decline year-to-date and over 70% from its peak in 2021 [3][20]. - The overall market sentiment remains cautious, reflecting the ongoing challenges faced by the company and its leadership [20]. Talent and Leadership Challenges - The departure of key figures, including popular hosts from Dongfang Zhenxuan, has raised concerns about talent retention and the company's ability to maintain its competitive edge [14][19]. - The shift towards a "de-IP" strategy aims to reduce reliance on individual personalities and focus on building a more sustainable operational model [14][19]. New Business Initiatives - New Oriental has launched a tourism brand, aiming to diversify its offerings and leverage its educational expertise to enhance the travel experience [11][12]. - The tourism segment has shown potential for growth, with plans to expand into new areas and achieve profitability by the 2026 fiscal year [12][20].

Core Points - The recent internal letter from the chairman of New Oriental, Yu Minhong, while celebrating the company's 32nd anniversary, has sparked controversy due to his presence in Antarctica while employees are reportedly working overtime [1][4][8] - Yu Minhong emphasized the importance of employee feedback and expressed plans to take selected employees to Antarctica next winter, highlighting the company's tradition of allowing employee grievances [1][4] - The letter's theme of resilience and hope, likening the struggles of New Oriental to the survival of penguins in extreme conditions, was overshadowed by employee dissatisfaction regarding the disconnect between the chairman's vacation and their work pressures [7][9] Company Overview - New Oriental is currently undergoing a critical transformation phase, facing significant operational pressures, as evidenced by a 73.7% drop in net profit to $7.1 million in the fourth quarter of fiscal year 2025, primarily due to losses in the Oriental Selection business and goodwill impairment [20] - The company's revenue growth has slowed, with fiscal year 2025 revenue growth decreasing from 43.9% to 13.6% [20] - In the first quarter of fiscal year 2026, New Oriental reported net revenue of $1.523 billion, a year-on-year increase of 6.1%, driven by new educational business initiatives [20] Future Plans - New Oriental plans to establish a youth exploration center aimed at fostering children's understanding and appreciation of nature, with potential Antarctic exploration trips for youth set to begin next winter [14][18] - The chairman's recent activities in Antarctica are seen as part of a broader strategy to expand into the cultural tourism sector, which could provide new growth opportunities for the company [18][20]