Core Viewpoint - Guosen Securities maintains an "outperform" rating for New Oriental-S (09901) and raises the company's net profit forecast for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million respectively, with the latest market capitalization corresponding to PE ratios of 19.5, 17.0, and 15.2 times [1] Group 1: Revenue and Profitability - In FY2026Q2, the company achieved net revenue of $1.191 billion, a year-on-year increase of 14.7%, exceeding market expectations of 12% [1] - The company reported a non-GAAP operating profit of $89.13 million, reflecting a significant increase of 206.9% [1] - Deferred revenue reached $2.162 billion, marking a year-on-year growth of 10.2% [1] Group 2: New Education and Overseas Study Business - The new education business remains a core growth driver, benefiting from an increase in renewal rates, which grew by 21.6% year-on-year, accelerating from 15.3% in FY26Q1 [2] - Non-subject tutoring services covered approximately 1.058 million students, a year-on-year increase of 6.4% [2] - The overseas study-related business showed resilience, with total revenue slightly increasing year-on-year, outperforming previous market expectations of a 5% decline [2] Group 3: Quality Development and Operational Efficiency - As of FY26Q2, the company had 1,379 teaching locations, a 2% increase, continuing its cautious expansion strategy focused on high-quality development [3] - The non-GAAP operating profit margin improved by 4.7 percentage points to 7.5% year-on-year [3] - Gross margin was reported at 53.3%, an increase of 1.3 percentage points, while the management expense ratio remained stable at 31.4% [3] Group 4: Future Outlook - For FY2026Q3, the company expects a year-on-year revenue growth of 11-14% and has raised its full-year revenue growth guidance to 8-12%, up from the previous estimate of 5-10% [4]

Core Viewpoint - Guosen Securities maintains an "outperform" rating for New Oriental-S (09901) and raises the company's net profit forecast for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million, respectively, with the latest market capitalization corresponding to PE ratios of 19.5x, 17.0x, and 15.2x [1] Group 1: Revenue and Profitability - In FY2026Q2, the company achieved net revenue of $1.191 billion, a year-on-year increase of 14.7%, exceeding market expectations of 12% [1] - The company reported a significant increase in operating profit to $89.13 million, up 206.9% year-on-year, indicating continuous improvement in profitability [1] - Deferred revenue reached $2.162 billion, reflecting a year-on-year growth of 10.2% [1] Group 2: New Education and Study Abroad Business - The new education business remains a core growth driver, benefiting from an increase in retention rates, which grew by 21.6% year-on-year, accelerating from 15.3% in FY26Q1 [2] - Non-academic tutoring services reached approximately 1.058 million students, a 6.4% increase, as the company focuses on improving teaching quality and retention rates [2] - The study abroad-related business showed resilience, with total revenue slightly increasing year-on-year, outperforming previous market expectations of a 5% decline [2] Group 3: Quality Development and Operational Efficiency - As of FY26Q2, the company had 1,379 teaching locations, a 2% increase, continuing its cautious expansion strategy focused on high-quality development [3] - The Non-GAAP operating profit margin improved by 4.7 percentage points to 7.5%, with a gross margin of 53.3%, up 1.3 percentage points [3] - The company plans to enhance profitability through organizational optimization and technological advancements [3] Group 4: Future Outlook - For FY2026Q3, the company expects a year-on-year revenue growth of 11-14%, with an upward revision of the full-year revenue growth forecast to 8-12%, previously estimated at 5-10% [3]

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4]. Core Insights - The company has adjusted its revenue growth guidance for the fiscal year 2026 to 8-12%, up from the previous estimate of 5-10%, indicating a positive outlook for revenue growth across various business lines [3][21]. - The company reported a significant increase in net revenue of $1.191 billion, representing a year-on-year growth of 14.7%, which exceeded market expectations [2][9]. - The Non-GAAP operating profit reached $89.13 million, showing a remarkable year-on-year increase of 206.9%, reflecting continuous improvement in profitability [2][9]. - Deferred revenue stood at $2.162 billion, marking a 10.2% year-on-year growth, which lays a solid foundation for future revenue recognition [2][9]. Revenue and Business Performance - The new education business remains the core growth driver, with a year-on-year revenue increase of 21.6%, benefiting from improved renewal rates [2][13]. - The number of active paid users for the smart learning system reached 352,000, reflecting a 34.9% year-on-year growth [2][13]. - The company has 1,379 teaching centers, with a cautious expansion strategy, increasing by 2% quarter-on-quarter [3][18]. Financial Projections - The company expects revenue growth of 11-14% for Q3 FY2026, with various segments projected to achieve accelerated growth [3][20]. - The forecast for net profit for the fiscal years 2026-2028 has been raised to $483 million, $555 million, and $620 million, respectively [4][21]. - The latest market capitalization corresponds to a price-to-earnings (PE) ratio of 19.5, 17.0, and 15.2 for the fiscal years 2026, 2027, and 2028 [4][21].

Investment Rating - The investment rating for the company is "Outperform the Market" [6][4]. Core Insights - The company has adjusted its revenue growth guidance for the fiscal year 2026, now expecting a growth rate of 8-12%, up from the previous estimate of 5-10% [4][20]. - The company reported a significant increase in net revenue for FY2026Q2, achieving $1.191 billion, which represents a year-on-year growth of 14.7%, exceeding market expectations [2][9]. - The Non-GAAP operating profit reached $89.13 million, marking a substantial increase of 206.9% year-on-year, indicating continuous improvement in profitability [2][9]. - Deferred revenue stood at $2.162 billion, reflecting a year-on-year growth of 10.2%, which lays a solid foundation for future revenue recognition [2][9]. Revenue and Business Performance - The new education business remains the core growth driver, with a year-on-year revenue increase of 21.6%, benefiting from improved renewal rates [2][13]. - The number of active paid users for the smart learning system reached 352,000, showing a year-on-year growth of 34.9% [2][13]. - The company has 1,379 teaching centers, reflecting a cautious expansion strategy with a 2% quarter-on-quarter increase [3][18]. - The adult and university student-related business saw a year-on-year revenue growth of 12.8%, although the growth rate slightly declined compared to the previous quarter [2][13]. Financial Projections - The company has revised its net profit forecasts for the fiscal years 2026-2028 to $480 million, $560 million, and $620 million, respectively, up from previous estimates [4][21]. - The latest market capitalization corresponds to a price-to-earnings (P/E) ratio of 19.5 for 2026, 17.0 for 2027, and 15.2 for 2028 [4][21]. - The expected revenue for FY2026 is projected to be $5.47 billion, with a year-on-year growth of 11.6% [5][23].

Core Insights - New Oriental achieved net revenue of $1.191 billion in FY26Q2, a year-on-year increase of 14.7%, and a net profit attributable to shareholders of $45.45 million, up 42.3% year-on-year [1] - The company has raised its full-year revenue guidance for FY26 to between $5.292 billion and $5.488 billion, reflecting a year-on-year growth of 8% to 12% [2] - The board has approved a cash dividend of $0.12 per share and initiated a $300 million share buyback program, indicating management's confidence in future growth [2] Business Performance - The overseas examination preparation business saw a revenue increase of 4.1% year-on-year, while domestic examination preparation for adults and university students grew by 12.8% year-on-year, contributing significantly to core revenue [1] - New educational businesses reported a revenue increase of 21.6% year-on-year, with non-subject tutoring services operating in approximately 60 cities and attracting around 1.058 million registrations [1] - The "Oriental Selection" segment generated revenue of 2.3 billion RMB in the six months ending November 30, 2025, a year-on-year increase of 5.7%, and turned a profit of 239 million RMB [1] Operational Efficiency - Non-GAAP operating profit for FY26Q2 was $89.13 million, a significant increase of 206.9% year-on-year, with an operating profit margin of 7.5%, up 4.7 percentage points year-on-year [2] - The improvement in profitability is attributed to a focus on core operations, cost reduction measures, and efficiency enhancements through organizational restructuring and AI technology [2] Future Outlook - The company expects overall net revenue for FY26Q3 to be between $1.31 billion and $1.349 billion, reflecting a year-on-year growth of 11% to 14% [2] - Continued revenue growth and ongoing cost optimization efforts are anticipated to further improve operating profits in the future [2] Profit Forecast and Valuation - The profit forecasts for the fiscal years 2026-2028 have been raised to $497 million, $585 million, and $680 million, respectively, with corresponding EPS estimates of $0.31, $0.37, and $0.43 [3] - The current stock price corresponds to a PE ratio of 18x for FY26, 15x for FY27, and 13x for FY28, reflecting the company's position as a leader in the education and training industry [3]

Core Viewpoint - New Oriental reported a net revenue of $1.191 billion for FY26Q2, representing a year-on-year increase of 14.7%, and a net profit attributable to shareholders of $45.45 million, up 42.3% year-on-year [4][5]. Group 1: Business Performance - The company's revenue from overseas examination preparation increased by 4.1% year-on-year, focusing on core exam training needs [5]. - Revenue from domestic examination preparation for adults and college students grew by 12.8% year-on-year, maintaining a steady growth trend [5]. - New business revenue rose by 21.6% year-on-year, with non-subject tutoring services operating in approximately 60 cities and attracting around 1.058 million registrations [5]. - The Oriental Selection segment achieved revenue of 2.3 billion RMB in the six months ending November 30, 2025, a year-on-year increase of 5.7%, and turned a profit with a net profit of 239 million RMB [5]. Group 2: Financial Guidance and Shareholder Returns - The company expects overall net revenue for FY26Q3 to be between $1.31 billion and $1.349 billion, reflecting a year-on-year growth of 11%-14% [5]. - Full-year net revenue guidance for FY26 has been raised to $5.292 billion to $5.488 billion, indicating a year-on-year growth of 8%-12% [5]. - The board has approved a cash dividend of $0.12 per share (equivalent to $1.20 per ADS) and initiated a $300 million share buyback program, demonstrating management's confidence in future growth [5]. Group 3: Operational Efficiency - Non-GAAP operating profit for FY26Q2 was $89.13 million, a significant increase of 206.9% year-on-year, with an operating profit margin of 7.5%, up 4.7 percentage points [7]. - The improvement in profitability is attributed to a focus on core operations, avoiding blind expansion, and optimizing market expenditure [7]. - Cost reduction and efficiency enhancement measures are being implemented in two phases, with the first phase focusing on reducing unnecessary costs and the second phase leveraging organizational restructuring and AI technology [7].

Investment Rating - The report upgrades the investment rating of New Oriental-S (9901.HK) to "Buy" [1] Core Insights - FY26Q2 revenue reached USD 1.191 billion, a year-on-year increase of 14.7%, exceeding previous guidance. Net profit attributable to shareholders was USD 45.45 million, up 42.3% year-on-year, while Non-GAAP net profit attributable to shareholders was USD 72.90 million, reflecting a 68.6% increase year-on-year [5][6] - The company has raised its full-year revenue guidance for FY26 to USD 5.292-5.488 billion, representing a year-on-year growth of 8%-12%, up from the previous guidance of 5%-10% [7] - The company plans to distribute a cash dividend of USD 0.12 per share and has initiated a USD 300 million share buyback program, indicating management's confidence in future growth [7] Revenue Performance - The revenue breakdown for FY26Q2 shows: 1) Overseas business revenue grew by 4.1% year-on-year, focusing on core exam preparation needs 2) Domestic exam preparation for adults and university students saw a 12.8% year-on-year increase, becoming a core revenue support 3) New educational businesses reported a 21.6% year-on-year revenue growth, with significant expansion in non-subject tutoring across approximately 60 cities [6] 4) Dongfang Zhenxuan achieved revenue of RMB 2.3 billion in the six months ending November 30, 2025, a 5.7% year-on-year increase, and turned a profit of RMB 239 million [6] Profitability and Efficiency - FY26Q2 Non-GAAP operating profit was USD 89.13 million, a significant increase of 206.9% year-on-year, with an operating profit margin of 7.5%, up 4.7 percentage points year-on-year [8] - The improvement in profitability is attributed to a focus on core operations, cost reduction measures, and efficiency optimization through organizational restructuring and AI technology [8] Earnings Forecast and Valuation - The earnings forecast for FY26-28 has been revised upwards, with net profit estimates of USD 497 million, USD 585 million, and USD 680 million for FY26, FY27, and FY28 respectively, reflecting increases of 33.8%, 17.7%, and 16.2% [9] - The projected EPS for FY26-28 is USD 0.31, USD 0.37, and USD 0.43, with corresponding P/E ratios of 18x, 15x, and 13x, indicating a strong position in the education and training industry [9][10]

Core Viewpoint - New Oriental's financial performance for the second quarter of fiscal year 2026 shows significant growth, with net revenue increasing by 14.7% year-on-year to $1.191 billion, and operating profit rising by 244.4% to $66.3 million [1] Financial Performance - For the first half of fiscal year 2026, net revenue reached approximately $2.714 billion, a year-on-year increase of 9.7% - Operating profit for the same period was approximately $377 million, up 20.7% year-on-year - Net profit attributable to shareholders was approximately $286 million, reflecting a 3.2% year-on-year growth [1] Business Segments - Revenue from overseas exam preparation increased by approximately 4.1% year-on-year - Domestic exam preparation for adults and college students grew by about 12.8% year-on-year - New education business achieved a year-on-year growth of 21.6% - Non-subject tutoring courses have been launched in around 60 cities, attracting approximately 1.058 million students [2] Strategic Initiatives - The company is focusing on enhancing core educational services and improving teaching quality and product standards - A comprehensive cross-departmental customer service system has been initiated to boost customer loyalty and retention, while also reducing customer acquisition costs [2] - The company is investing in AI technology and integrating it into existing educational products to enhance operational efficiency [2] Shareholder Returns - The board has approved a cash dividend of $0.12 per ordinary share (or $1.20 per American depositary share), to be distributed in two installments as part of the shareholder return plan for fiscal year 2026 [3] - A share buyback plan has been announced, authorizing the repurchase of up to $300 million of American depositary shares or ordinary shares within the next 12 months [3] Future Outlook - For the third quarter of fiscal year 2026, the company expects net revenue to be between $1.313 billion and $1.349 billion, representing a year-on-year growth rate of 11% to 14% [3]

Core Viewpoint - The company is experiencing a gradual stabilization in its core business, leading to a significant improvement in shareholder returns, with a target price adjustment to $74.5 or HKD 57.9, maintaining a buy rating [1] Performance Overview - For FY26Q1, the company reported a net revenue of $1.52 billion, a year-on-year increase of 6.1%, slightly exceeding previous guidance [1] - Operating profit reached $310 million, up 6% year-on-year, while Non-GAAP operating profit was $336 million, reflecting an 11.3% increase [1] - The net profit attributable to shareholders was $240 million, down 1.9% year-on-year, primarily due to dividend withholding tax and fluctuations in other income [1] - The Non-GAAP net profit attributable to shareholders was $258 million, a decrease of 1.6% year-on-year, with a Non-GAAP operating profit margin of 22.0%, up 1.0 percentage points year-on-year [1] Education Business Performance - In FY26Q1, the overseas exam preparation and study abroad consulting businesses grew by 1.0% and 2.0% year-on-year, respectively, with rapid growth in overseas youth exam training partially offsetting declines in adult exams [2] - The university and adult exam business saw a year-on-year growth of 14.4% [2] - New business revenue increased by 15.3% year-on-year, with non-academic tutoring registrations reaching 530,000, a 9.5% increase [2] - The number of active paying users for smart learning systems and devices reached 452,000 in Q4, a year-on-year increase of 39.9% [2] FY26Q2 and FY26 Outlook - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12% [3] - The net revenue forecast for FY26 remains unchanged, with expected total revenue between $5.145 billion and $5.39 billion, indicating a year-on-year growth of 5% to 10% [3] Shareholder Return Plan - In July 2025, the company approved a three-year shareholder return plan, committing to return no less than 50% of the previous fiscal year's net profit to shareholders starting from FY26 [4] - The announced shareholder return plan for FY26 includes a cash dividend of $190 million (to be paid in two installments) and a $300 million share buyback within the next 12 months, resulting in a total return of approximately $490 million [4]

Core Viewpoint - First Shanghai has given New Oriental-S (09901, EDU.US) a target price of $74.5 / HKD 57.9 based on a 25x PE for FY26E net profit, maintaining a buy rating due to the stabilization of core business and significant shareholder returns [1] Group 1: Performance Overview - For FY26Q1, the company reported a net revenue of $1.52 billion, a year-on-year increase of 6.1%, slightly exceeding previous guidance [2] - Operating profit reached $310 million, up 6% year-on-year, while Non-GAAP operating profit was $336 million, reflecting an 11.3% increase [2] - The net profit attributable to shareholders was $240 million, down 1.9% year-on-year, primarily due to dividend withholding tax and fluctuations in other income [2] Group 2: Education Business Performance - In FY26Q1, the overseas exam preparation and study abroad consulting businesses grew by 1.0% and 2.0% year-on-year, respectively, with youth exam training showing faster growth [3] - The university and adult exam business saw a year-on-year growth of 14.4% [3] - New business revenue increased by 15.3% year-on-year, with non-academic tutoring registrations reaching 530,000, a 9.5% increase [3] - The active paying users for the smart learning system and devices reached 452,000, up 39.9% year-on-year [3] Group 3: FY26Q2 and FY26 Outlook - The company expects FY26Q2 net revenue to be between $1.132 billion and $1.163 billion, representing a year-on-year growth of 9% to 12% [4] - For FY26, the total net revenue is projected to be between $5.145 billion and $5.39 billion, with a year-on-year growth of 5% to 10% [4] Group 4: Shareholder Return Plan - In July 2025, the company approved a three-year shareholder return plan, committing to return no less than 50% of the previous fiscal year's net profit to shareholders starting from FY26 [5] - The shareholder return plan includes a cash dividend of $190 million (to be paid in two installments) and a $300 million buyback within the next 12 months, resulting in a total return rate of approximately 5% [5] - The total planned return through dividends and buybacks amounts to $490 million [5]