Core Viewpoint - The report indicates that New Oriental's revenue for the first quarter of the 2026 fiscal year grew by 6% year-on-year to $1.523 billion, exceeding expectations by 1% [1] Financial Performance - Adjusted operating profit was approximately $336 million, with an operating margin of 22%, expanding by 1 percentage point year-on-year [1] - Adjusted net profit attributable to shareholders was $258 million, corresponding to a net profit margin of 17% [1] Future Guidance - Management maintains revenue guidance for the 2026 fiscal year, expecting a year-on-year growth of 5% to 10%, with the second fiscal quarter revenue growth projected between 9% and 12% [1] - The bank anticipates that New Oriental's overall revenue growth from 2026 to 2028 will exceed 10%, with a continued trend of profit margin expansion [1] Business Outlook - The bank remains optimistic about the demand and growth prospects for New Oriental's K12 education and training business, citing diversified age coverage and steady revenue growth [1] - Profit margins still have room for optimization, and shareholder returns reflect long-term growth certainty and ample cash flow [1] - Although the study abroad-related business has recently been impacted, it still leads the industry [1] Valuation and Target Price - The bank assigns a price-to-earnings ratio of 15 times for the K12 business and 8 times for the study abroad business, with corresponding profit growth rates of 25% and a decline of 7% respectively [1] - Considering the impact of the consolidation of Dongfang Zhenxuan, the target price for H-shares is raised from HKD 46 to HKD 55, and for U.S. shares from USD 59 to USD 71, maintaining a "Buy" rating [1]

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]

Core Viewpoint - The report from CMB International maintains a target price of HKD 46 for New Oriental-S (09901) and a "Buy" rating, despite a downward adjustment in revenue and operating profit forecasts for the fiscal years 2026 and 2027 [1] Revenue and Profit Forecasts - The company has lowered its revenue forecast by approximately 3% for the fiscal years 2026 and 2027, expecting revenue growth rates of 10% and 14% respectively [1] - Operating profit is expected to decrease by about 17%, with operating profit margins projected at 10.2% and 10.5%, showing a slight increase compared to the fiscal year 2025 [1] Business Segment Performance - CMB International remains optimistic about the demand and growth prospects for K12 education and training-related businesses [1] - The first quarter guidance was below expectations mainly due to seasonal factors, but growth rates are expected to recover in the second to fourth quarters [1] Valuation Methodology - The valuation method has been adjusted to SOTP (Sum of the Parts), assigning a price-to-earnings ratio of 15 times for K12 business and 8 times for study abroad business for the fiscal year 2026, corresponding to profit growth rates of +22% and -10% respectively [1] Quarterly Performance - In the fourth quarter of fiscal year 2025, revenue increased by 9.4% year-on-year, surpassing the expectations of CMB International and other institutions, which were 2% and 5% respectively [1] - Excluding Dongfang Zhenxuan (01797), education and cultural tourism revenue grew by 19% year-on-year, with an education operating profit margin of 6.5%, an increase of 410 basis points compared to the same period last year, attributed to effective cost reduction and efficiency improvement measures [1] Management Guidance - The management has indicated that the group’s revenue is expected to increase by 5-10% for the fiscal year 2026, compared to the market expectation of 12% [1] - The main adjustment is a downward revision of the growth forecast for overseas-related business to a decline of 5%, while the growth rate for K12-related business remains in line with market expectations at 19% [1] - The company is accelerating cost optimization efforts, aiming to achieve stable or slightly increased operating profit margins for the year [1]

Core Viewpoint - The report from CMB International maintains a target price of HKD 46 for New Oriental-S (09901) and a "Buy" rating, while adjusting revenue and operating profit forecasts for the fiscal years 2026 and 2027 downward by approximately 3% and 17% respectively [1] Group 1: Financial Projections - Revenue growth is expected at 10% and 14% for fiscal years 2026 and 2027 respectively, with an operating profit margin projected at 10.2% and 10.5%, showing a slight increase compared to fiscal year 2025 [1] - The fourth quarter of fiscal year 2025 saw a revenue increase of 9.4% year-on-year, surpassing the expectations of CMB International and other institutions, which were 2% and 5% respectively [1] - Excluding Dongfang Zhenxuan (01797), education and cultural tourism revenue increased by 19% year-on-year, with an education operating profit margin of 6.5%, up 410 basis points from the same period last year due to effective cost reduction and efficiency improvement measures [1] Group 2: Business Segments and Market Outlook - The guidance for the first quarter was below expectations primarily due to seasonal factors, but growth is expected to recover in the second to fourth quarters [1] - The management's guidance for fiscal year 2026 indicates a group revenue increase of 5-10%, compared to the market expectation of 12%, with the main adjustment being a downward revision of the growth forecast for overseas-related business to a decline of 5% [1] - The growth rate for K12-related business is maintained at the market expectation of 19% [1] Group 3: Valuation Methodology - CMB International has adjusted its valuation method to SOTP, assigning a price-to-earnings ratio of 15 times for K12 business and 8 times for study abroad business for fiscal year 2026, corresponding to profit growth rates of +22% and -10% respectively [1] - The company is accelerating cost optimization efforts, aiming to achieve stable or slightly increased operating profit margins for the entire year [1]