Yang attributed the quarter’s non-GAAP operating margin expansion to “better utilization,” higher operating leverage, cost control, and profit contribution from East Buy. In response to an analyst question, he added that excluding East Buy, the remaining businesses together delivered roughly 300 basis points of year-over-year margin expansion, versus a total non-GAAP operating margin increase of 470 basis points for the group.On a GAAP basis, operating income rose 264.4% to $66.3 million, and net income att ...

Company Overview - New Oriental Education & Technology Group operates a wide range of private education services in China, including K-12 after-school tutoring, test preparation, language training, and online education programs [5][8] - The company reported a market capitalization of $9.17 billion and a revenue of $4.99 billion for the trailing twelve months (TTM) [4] - Net income for the TTM was $367 million, indicating a slight year-over-year decline of 2% [4][10] Financial Performance - For the fiscal first quarter, revenue increased by 6.1% year-over-year to $1.52 billion, while operating income rose to $310.8 million [9] - Non-GAAP operating income grew by 11.3% to $335.5 million, supported by improved cost discipline and a 100-basis-point expansion in non-GAAP operating margin [9] - The company generated nearly $192 million in operating cash flow for the quarter and maintained over $1.28 billion in cash on its balance sheet [9] Investment Activity - First Beijing Investment Ltd increased its stake in New Oriental by 2.23 million shares, bringing its total position to 9.35 million shares valued at $496.02 million as of September 30 [2][6] - New Oriental now represents 19.15% of First Beijing Investment's U.S. equity portfolio, indicating a significant commitment to the education sector [2][6] Market Context - As of the latest data, New Oriental shares were priced at $55.03, reflecting a 13% decline over the past year, contrasting with the S&P 500's increase of approximately 16% [3] - The investor's decision to increase its stake in New Oriental suggests a belief that the market is undervaluing the company's resilience despite the challenges faced by the education sector in recent years [6][10]

Company Overview - New Oriental Education & Technology Group is a leading provider of private education services in China, operating a vast network of schools and learning centers, offering a diversified portfolio including language training, test preparation, and online education [5][8] - As of the latest report, the company's market capitalization is $9.3 billion, with a revenue of $5 billion and a net income of $367 million for the trailing twelve months [4] Recent Developments - Serenity Capital Management increased its stake in New Oriental Education & Technology Group by approximately $21.6 million, acquiring 411,380 additional shares during the third quarter, bringing its total holdings to 656,878 shares valued at $34.9 million as of September 30 [2][3] - The fund's investment now represents 8.8% of its reportable assets under management, making New Oriental its fifth-largest holding [3][7] Financial Performance - The company's first-quarter fiscal 2026 revenue rose 6.1% year over year to $1.52 billion, while operating income increased by 6% to $311 million, with a non-GAAP operating margin improvement to 22% [10] - The company ended the quarter with over $1.2 billion in cash and plans to return at least 50% of annual net income to shareholders through dividends and buybacks starting this fiscal year [11] Market Position and Strategy - Following regulatory changes in China's education sector, New Oriental has shifted its focus towards adult education, overseas test preparation, and consulting services, adapting its business model to ensure sustainability and profitability [9][10] - The company is positioned as a scaled, profitable survivor in a challenging market, indicating potential for future growth from a more stable base [12]