Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The company reported FY26Q2 net revenue of $119.1 million, a year-on-year increase of 14.7%, with net profit attributable to shareholders at $4.55 million, up 42.3%, and Non-GAAP net profit at $7.29 million, reflecting a 68.6% increase [2] - The revenue exceeded expectations primarily due to the recovery in new education business and the revival of Dongfang Zhenxuan, with profit growth outpacing revenue growth due to a 1.2 percentage point increase in gross margin and a 2.6 percentage point decrease in sales expense ratio [2] - The company has successfully advanced its shareholder return plan, having fully paid the first cash dividend of $0.06 per ordinary share and initiated a $300 million share buyback plan, repurchasing approximately 1.6 million ADS for a total consideration of about $86.3 million as of January 27, 2026 [2] Summary by Relevant Sections Business Performance - Non-academic business showed a recovery with a 6.4% increase in enrollment and a 10.2% rise in deferred revenue in the first half of the year. The new education business grew by 21.6% year-on-year in FY26Q2, significantly up from 15.3% in FY26Q1, driven by a focus on core education services and improved teaching quality [3] - The deferred revenue balance reached $2.162 billion, a 10.2% year-on-year increase, slightly up from 10.0% in FY26Q1 [3] Profitability Metrics - The company's gross margin and net profit margin for FY26Q2 were 53.3% and 3.8%, respectively, reflecting year-on-year increases of 1.2 and 0.7 percentage points. The sales and management expense ratios decreased by 2.6 and 0.1 percentage points, respectively [4] Financial Guidance - The company provided FY26Q3 guidance for revenue growth of 11-14% in USD terms, with an annual revenue growth forecast of 5%-10% for FY26. New business is expected to grow by 20%-25%, while high school business is projected to grow by 13% [5] - Long-term, the company is positioned as a rare national leader with stable core education revenue, focusing on cost reduction and efficiency improvements, which are expected to enhance profit margins [5] - The company maintains its revenue forecasts for FY26-28 at $5.297 billion, $5.778 billion, and $6.296 billion, respectively, and net profit forecasts at $458 million, $526 million, and $577 million, respectively, corresponding to EPS of $0.28, $0.32, and $0.35 [5]