Core Insights - The company reported a 6% year-on-year revenue increase to $1.523 billion for Q1 of FY2026, exceeding expectations by 1% [1] - Adjusted operating profit was approximately $336 million, with an operating margin of 22%, reflecting a 1 percentage point year-on-year expansion [1] - Adjusted net profit attributable to shareholders was $258 million, corresponding to a net profit margin of 17% [1] Performance Highlights - The study abroad-related business performed better than expected, with preparatory and consulting revenues increasing by 1% and 2% year-on-year, compared to a previous forecast of -5% [1] - The college/adult education segment maintained a robust growth rate, with a 14% year-on-year revenue increase [1] - The K9 new business segment saw a 15% year-on-year revenue growth, with learning machines outperforming non-subject areas [1] - Non-subject training enrollment increased by 10% year-on-year to 530,000, while paid users of the intelligent learning system and devices rose by 40% year-on-year to 452,000 [1] - The number of teaching points reached 1,347, an increase of 29 points or 2% from the previous quarter, within the company's expansion pace [1] - The company announced a cash dividend of $190 million and a $300 million share repurchase plan, which is better than previous expectations [1] FY2026 Outlook - Management maintains the FY2026 group revenue guidance, expecting a year-on-year growth rate of 5-10%, with Q2 revenue growth projected between 9-12%, compared to a previous expectation of 9% [2] - Concerns regarding business growth are alleviated by improved retention rates in K12 business and product quality enhancements, which are expected to stabilize revenue growth [2] - The study abroad-related business may remain under pressure, but is expected to benefit from a projected over 25% year-on-year increase in youth language training revenue and expansion in non-English-speaking countries' consulting services [2] - Overall revenue growth for FY2026/27/28 is anticipated to exceed 10%, with a continued trend of profit margin expansion [2] Valuation - The company remains optimistic about the demand and growth prospects for K12 education-related businesses, with steady revenue growth and potential for profit margin optimization [2] - Despite recent impacts on the study abroad-related business, it continues to lead the industry [2] - Using the SOTP valuation method, the company assigns a 15x P/E ratio for K12 business and an 8x P/E ratio for study abroad business, with corresponding profit growth rates of +25% and -7% [2] - The target price has been raised to HKD 55 / USD 71 (EDU US/Buy) from HKD 46 / USD 59, maintaining a buy rating [2]

Company Research: New Oriental (EDU) - Adjusted operating profit margin improved, with Q1 FY26 net revenue at $1.52 billion, up 6.1% year-on-year, slightly exceeding guidance of $1.46 to $1.51 billion[6] - Non-GAAP operating profit reached $336 million, a year-on-year increase of 11.3%, with a Non-GAAP operating profit margin of 22.0%, up 1.0 percentage points[6] - The company plans to return at least 50% of the previous fiscal year's net profit to shareholders, with a total shareholder return plan of $490 million, including $190 million in cash dividends and $300 million in share buybacks[9] Earnings Forecast and Valuation - For FY26Q2, net revenue is expected to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12%[8] - FY26 total net revenue is projected to be between $5.145 billion and $5.39 billion, indicating a growth of 5% to 10%[8] - Target price adjusted to $74.50, maintaining a "Buy" rating, based on a 25x PE for FY26E net profit[10] Company Research: China Shenhua (1088) - For the first three quarters of 2025, revenue was CNY 213.15 billion, down 16.6% year-on-year, with net profit attributable to shareholders at CNY 41.37 billion, a decrease of 13.8%[15] - Coal sales volume decreased by 8.4% to 316.5 million tons, with Q3 revenue at CNY 75.04 billion, down 13.1% year-on-year[16] - Despite challenges, the company maintained a strong cost control, with unit production costs down 3.1% year-on-year[16] Future Outlook and Valuation - Target price set at HKD 47.70, with a "Buy" rating, reflecting a potential upside of 15.1% from the current price[18] - Expected net profit for 2025-2027 is projected at CNY 58.8 billion, CNY 58.7 billion, and CNY 58.9 billion respectively[18] - The company is viewed as a "cash cow" with a generous dividend policy, providing a stable cash return to investors[18]

Investment Rating - The report assigns a "Buy" rating to New Oriental Education Technology (9901 HK) with a target price of HKD 55.00, indicating a potential upside of 19.9% from the current price of HKD 45.88 [4][8][15]. Core Insights - The report highlights that K12 education may accelerate, boosting shareholder returns and enhancing confidence in the company's growth prospects [2]. - Financial forecasts indicate a revenue growth trajectory, with expected revenues of USD 4.9 billion in 2025, growing to USD 6.875 billion by 2028, reflecting a compound annual growth rate (CAGR) of approximately 12% [3][16]. - The net profit is projected to increase from USD 372 million in 2025 to USD 792 million by 2028, with a notable increase in earnings per share (EPS) from USD 0.32 in 2025 to USD 0.45 in 2028 [3][16]. Financial Overview - Revenue (in million USD) is forecasted as follows: - 2024: 4,314 - 2025: 4,900 - 2026E: 5,413 - 2027E: 6,136 - 2028E: 6,875 - Year-on-year growth rates are expected to be 43.9% in 2024, 13.6% in 2025, and gradually declining to 12.0% by 2028 [3][16]. - Net profit (in million USD) projections are: - 2024: 310 - 2025: 372 - 2026E: 428 - 2027E: 481 - 2028E: 792 [3][16]. Valuation - The report employs a Sum-of-the-Parts (SOTP) valuation method, assigning a price-to-earnings (P/E) ratio of 15x for K12 business and 8x for study abroad business, reflecting expected profit growth rates of +25% and -7% respectively [7][8]. - The target price was adjusted upwards to HKD 55.00 from a previous HKD 46.00, maintaining a "Buy" rating based on the strong demand and growth outlook for K12 education services [7][8].

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].

Core Viewpoint - The report from Everbright Securities indicates a downward revision of New Oriental-S (09901) net profit forecasts for FY26-28 due to intensified industry competition and increased business base, with projected profits of $442 million, $514 million, and $582 million respectively, each down by 8% [1] Group 1: Financial Performance - In FY26Q1, New Oriental achieved net revenue of $1.523 billion, 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 overall net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9%-12% [2] Group 2: Business Segments - In the overseas business segment, exam preparation revenue grew by 1.0% and consulting revenue by 2.0%, with slower growth rates observed [1] - Domestic exam preparation for adults and university students saw a robust revenue increase of 14.4% year-on-year [1] - New educational business revenue grew by 15.3% year-on-year, although growth was impacted by increased competition from low-cost/free classes during the summer [1] Group 3: Operational Efficiency - Non-GAAP operating profit for FY26Q1 was $336 million, reflecting an 11.3% year-on-year increase, with an operating profit margin of 22.0%, up 1.0 percentage points [3] - The improvement in profit margin is attributed to ongoing efforts in cost optimization and operational efficiency [3] - The company is implementing a cautious capacity expansion strategy and enhancing the use of AI technology in its educational ecosystem and internal operations [3] Group 4: Shareholder Returns - The company announced a three-year shareholder return plan, committing to return at least 50% of the previous fiscal year's net profit to shareholders, including a cash dividend of $190 million and a $300 million share buyback plan [2]

Core Viewpoint - Company has adjusted its net profit forecasts for New Oriental-S (09901) for FY26-28 down by 8% to $4.42 billion, $5.14 billion, and $5.82 billion respectively, while maintaining an "Overweight" rating due to strong industry demand despite increased competition [1] Group 1: Financial Performance - In FY26Q1, the company achieved net revenue of $15.23 billion, a year-on-year increase of 6.1%, exceeding previous guidance [2][3] - 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% [2] - The company expects FY26Q2 net revenue to be between $11.32 billion and $11.63 billion, representing a year-on-year growth of 9%-12% [4] Group 2: Business Segments - The overseas examination preparation business saw a revenue increase of 1.0%, while the overseas consulting business grew by 2.0%, indicating a slowdown in growth [3] - Domestic examination preparation for adults and university students experienced a robust revenue growth of 14.4% [3] - New educational business revenue grew by 15.3%, although growth has slowed due to increased competition from low-cost/free classes during the summer [3] Group 3: Operational Efficiency - Non-GAAP operating profit for FY26Q1 was $336 million, an increase of 11.3% year-on-year, with an operating profit margin of 22.0%, up 1.0 percentage point [5] - The improvement in profit margin is attributed to ongoing efforts in cost optimization and operational efficiency [5] - The company is implementing a three-year shareholder return plan, 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 plan [4]

Group 1: New Oriental (EDU) - New Oriental's FY25Q4 net revenue increased by 9.4% year-on-year to $1.24 billion, exceeding previous guidance of $1.009 to $1.037 billion[5] - The company expects FY26Q1 net revenue to be between $1.46 billion and $1.51 billion, representing a year-on-year growth of 2% to 5%[6] - Non-GAAP net profit for FY25Q4 was $98.08 million, a 59.4% increase year-on-year[5] Group 2: Apple Inc. (AAPL) - Apple's total revenue for the quarter was $94.04 billion, a 9.6% year-on-year increase, surpassing Bloomberg's consensus estimate of $89.3 billion[16] - iPhone revenue grew by 8.2% year-on-year, while services revenue increased by 13.3%[16] - The company expects overall revenue growth for FY25Q4 to be in the mid to high single digits[16] Group 3: Hong Kong Stock Exchange (388) - The average daily trading volume for the Hong Kong Stock Exchange reached HKD 2.402 trillion in H1 2025, a 118% year-on-year increase[22] - The total market capitalization of the Hong Kong market grew to HKD 42.7 trillion, a 33% increase year-on-year[25] - The target price for Hong Kong Stock Exchange is set at HKD 500, representing a potential upside of 15.8% from the previous closing price[26] Group 4: HIMS & HERS HEALTH (HIMS) - HIMS reported Q2 revenue of $545 million, a 73% year-on-year increase, but a 7% decrease quarter-on-quarter[32] - The company expects Q3 revenue to be between $570 million and $590 million, with adjusted EBITDA projected at $60 million to $70 million[32] - The target price for HIMS is set at $62.1, indicating a 22% upside potential from the current price[34]

Group 1 - New Oriental reported FY2025 Q4 net revenue of $1.24 billion, a 9.4% increase, with an operating loss of $8.67 million and a net profit of $7.1 million, down 73.7% [1] - Non-GAAP operating profit reached $81.68 million, up 116.3%, and Non-GAAP net profit was $98.08 million, up 59.4% [1] - For FY2026 Q1, net revenue is expected to be between $1.464 billion and $1.507 billion, representing a growth of 2% to 5% [1] Group 2 - The core education business showed a recovery in profitability, with a gross margin of 54.2%, up 2 percentage points, while the operating profit margin was -0.7%, down 2 percentage points due to a one-time goodwill impairment of approximately $60 million [2] - Non-GAAP operating profit margin was 6.6%, up 3 percentage points, and excluding Oriental Selection, the Non-GAAP operating profit margin was 6.5%, up 4.1 percentage points [2] - The company is expected to experience a stable growth phase in its education business, with a three-year shareholder return plan to distribute at least 50% of the previous fiscal year's net profit to shareholders [2] Group 3 - As a leading player in the industry, New Oriental's advantages are highlighted in the current supply-demand landscape, despite challenges in overseas-related and cultural tourism businesses [3] - The company forecasts net profits of $490 million, $540 million, and $600 million for FY2026, FY2027, and FY2028, respectively, with Non-GAAP net profits of $550 million, $600 million, and $660 million [3] - The investment rating is maintained at "Buy" due to the anticipated steady growth of the education business alongside network capacity expansion [3]

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The core education business is showing a recovery in profitability, with a significant increase in Non-GAAP operating profit and net profit for FY2025Q4. The company is also implementing a three-year shareholder return plan, committing to distribute at least 50% of the previous fiscal year's net profit to shareholders through dividends and/or share buybacks [3][4]. - The company is expected to achieve steady growth in its core education business despite challenges in overseas-related services and tourism business. The forecasted net profit for FY2026 is projected to be between $492 million and $544 million, with Non-GAAP net profit expected to be between $550 million and $660 million for FY2026 [4][5]. Financial Summary - For FY2025Q4, the company reported a net revenue of $1.24 billion, a year-on-year increase of 9.4%. The operating loss was $8.67 million, while the net profit attributable to shareholders was $7.10 million, a decrease of 73.7%. Non-GAAP operating profit was $81.68 million, an increase of 116.3%, and Non-GAAP net profit was $98.08 million, an increase of 59.4% [1][2]. - The gross margin for FY2025Q4 was 54.2%, up by 2 percentage points, while the Non-GAAP operating margin was 6.6%, an increase of 3 percentage points [3]. - The company expects FY2026Q1 net revenue to be between $1.464 billion and $1.507 billion, representing a growth of 2% to 5% [1][4]. Business Segments - Excluding self-operated products and live e-commerce, the net revenue for FY2025Q4 grew by 18.7%. The overseas examination and consultation services grew by 14.6% and 8.2%, respectively, while domestic examination services for adults and college students increased by 17.0%. New educational businesses saw a growth of 32.5% [2][3]. - The number of registrations for non-subject tutoring reached 918,000, an increase of 4.9%, and the active paid users of the intelligent learning system and devices reached 255,000, a growth of 36% [2].