Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company has experienced a slowdown in revenue growth, but cost reduction and efficiency improvements are expected to enhance profitability [3][7] - For FY2025 Q3, the company reported revenue of $1.18 billion, a year-over-year decrease of 2%, while net profit attributable to shareholders was $90 million, reflecting a year-over-year increase of 0.1% [6][8] - The company anticipates a revenue guidance for FY2025 Q4 of $1.01 to $1.04 billion, representing a year-over-year growth of 10% to 13% [8][12] Revenue Performance - The company's FY2025 Q3 revenue was $1.18 billion, with the education business (excluding Dongfang Zhenxuan) generating $1.04 billion, which is a year-over-year increase of 21.2%, exceeding previous guidance of 18% to 21% [8][12] - The gross profit for FY2025 Q3 was $650 million, with a gross margin of 55.1%, an increase of 8.5 percentage points year-over-year, primarily due to cost reduction and efficiency improvements [8][12] Profitability Metrics - Operating profit for FY2025 Q3 was $120 million, a year-over-year increase of 9.8%, with an operating margin of 10.5%, up 1.1 percentage points year-over-year [8][12] - Non-GAAP operating profit was $140 million, a year-over-year decrease of 0.2%, with a Non-GAAP operating margin of 12%, slightly above Bloomberg consensus expectations of 10.8% [8][12] Financial Position - As of the end of FY2025 Q3, the company had cash and cash equivalents of $1.42 billion, time deposits of $1.41 billion, and short-term investments of $1.85 billion [8][12] - The company has a strong brand reputation and operational experience in the education sector, which supports its profitability outlook despite challenges in traditional study abroad and new cultural tourism businesses [12] Future Projections - The company is projected to achieve revenues of $4.86 billion, $5.53 billion, and $6.27 billion for FY2025, FY2026, and FY2027, respectively, with net profits of $414 million, $514 million, and $617 million for the same periods [11][12] - The report anticipates a PE ratio of 19, 15, and 13 for FY2025, FY2026, and FY2027, respectively, indicating a favorable valuation outlook [12]

Investment Rating - The report maintains a "Buy" rating for the company with a target price not specified [5] Core Views - The company reported FY25Q3 revenue of $1.2 billion, a decrease of 2% year-over-year, with Non-GAAP operating profit at $140 million, down 0.2%, and Non-GAAP net profit attributable to shareholders at $110 million, down 14% [1] - Excluding self-operated products and live e-commerce, revenue grew by 21.2% this quarter, with overseas exam preparation and consulting revenues increasing by approximately 7.1% and 21.4%, respectively [2] - The company is focusing on sustainable long-term growth by enhancing product quality and operational efficiency, while also integrating innovative technologies into its educational offerings [2][3] Financial Performance Summary - The Non-GAAP operating profit margin for the quarter was 13.3%, down from 15.1% in the same period last year, impacted by slower growth in overseas business and investments in newly integrated cultural tourism operations [3] - The company has adjusted its revenue forecasts for FY25-27 to $4.9 billion, $5.8 billion, and $6.8 billion, respectively, with Non-GAAP net profits projected at $460 million, $570 million, and $690 million [4]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The core education business shows steady revenue growth, while the overseas and cultural tourism businesses are dragging down profits [1] - For FY25Q3, the company achieved net revenue of $1.183 billion, a year-on-year decrease of 2.0%, and a net profit attributable to shareholders of $87 million, a year-on-year increase of 0.1% [5][6] Revenue Performance - FY25Q3 net revenue (excluding revenue from self-operated products and live e-commerce) was $1.038 billion, representing a year-on-year growth of 21.2%, aligning with previous guidance [6] - Breakdown of revenue sources includes: - Overseas exam preparation business: revenue grew by 7.1% - Overseas consulting business: revenue grew by 21.4% - Domestic exam preparation for adults and university students: revenue grew by 17.0% - New education business: revenue grew by 34.5% [6] Profitability Analysis - FY25Q3 operating profit margin was 10.5%, up from 9.4% in the same period last year; Non-GAAP operating profit margin was 12.0%, compared to 11.8% [8] - The report anticipates that the core education business's Non-GAAP operating profit margin will improve year-on-year in FY25Q4, despite pressures from the overseas high-end one-on-one business and cultural tourism [8] Future Outlook - The company expects FY25Q4 net revenue (excluding self-operated products and live e-commerce) to be between $1.009 billion and $1.037 billion, representing a year-on-year growth of 10%-13% [7] - The revenue growth rate is expected to slow down due to increased base effects and macroeconomic uncertainties [7] Financial Forecasts - The company has adjusted its net profit forecasts for FY2025-2027 to $406 million, $536 million, and $679 million, respectively, reflecting a conservative outlook [9] - Corresponding EPS for FY2025-2027 is projected to be $0.25, $0.33, and $0.42, with current stock price corresponding to P/E ratios of 19x, 14x, and 11x [9]

Investment Rating - The investment rating for the company is "Outperform the Market" [5] Core Views - The company has shown a cautious outlook on its study abroad business and future revenue projections, focusing on improving operational efficiency [1][3] - Non-selective business revenue increased by 21.2%, slightly exceeding management guidance, while total revenue for FY2025Q3 was $1.183 billion, down 2.0% year-on-year [1][8] - The company plans to maintain a 20-25% capacity expansion for FY2025, with a focus on improving outlet utilization [2][13] Revenue and Profitability - For FY2025Q3, the company reported a net profit of $113 million, adjusted down by 14.3% due to increased tax rates [1][8] - The deferred revenue at the end of February 2025 was $1.75 billion, reflecting a 15.0% year-on-year increase, although the growth rate has slowed compared to previous quarters [1][8] - The gross margin improved to 55.1%, up 8.5 percentage points, primarily due to a decrease in the proportion of low-margin e-commerce business [2][19] Business Segments Performance - K9 education new business grew by 35%, while high school training showed strong demand with a 19% increase [2][12] - The study abroad training and consulting segments grew by 7% and 21%, respectively, but are facing downward pressure due to declining consumer spending and international relations [2][12] - E-commerce and cultural tourism revenues dropped by 49% due to the divestment of "With Huixing" [2][12] Future Outlook - For FY2025Q4, the company expects non-selective revenue to grow by 10-13%, with continued pressure on study abroad demand and a high base effect in K12 education [3][21] - The company has initiated a share buyback program, having repurchased $696 million worth of shares, and plans to adopt more diversified shareholder return methods [3][21] - The adjusted net profit forecasts for 2025-2027 have been lowered to $470 million, $570 million, and $690 million, respectively, reflecting a downward adjustment of 3%, 14%, and 22% [3][22]

Group 1 - Goldman Sachs maintains a "Buy" rating on New Oriental-S (09901) and raises the target price to HKD 42 based on the sum-of-the-parts valuation method [1] - The firm expects investor confidence to gradually improve if the company achieves its profit margin expansion guidance for the May quarter, with the valuation multiple for New Oriental's core business projected to increase from the current 1x 12-month forward P/E [1] - Management emphasized cost control and operational efficiency during the February quarter earnings call, leading to an upward revision of non-GAAP operating profit expectations for FY25-27 by 7-14% [1] Group 2 - New Oriental's February quarter revenue and EPS fell short of expectations primarily due to a significant decline in revenue from Dongfang Zhenxuan (01797), which dropped by 59% year-on-year [2] - The firm has lowered its FY25 expectations for Dongfang Zhenxuan and adjusted the target price based on P/E to HKD 7.8 from HKD 8.2, but anticipates that Dongfang Zhenxuan will start contributing positively to group profits from the August quarter [2]

Investment Rating - The report assigns a "Buy" rating to New Oriental Education Technology (9901 HK) with a target price of HKD 46.00, indicating a potential upside of 29.8% from the current price of HKD 35.45 [1][4][14]. Core Insights - The report highlights that the overseas business may still face pressure, but cost reduction and efficiency improvements are expected to manifest in the upcoming quarter [1]. - For the fiscal year 2025, the company is projected to achieve revenue growth of 12.9% and net profit growth of 21.5% [2][9]. - The core education segment contributed 57% of total revenue, with new business revenue growing by 35%, accounting for 27% of total revenue [8][9]. Financial Overview - Revenue for fiscal year ending May 31, 2023, was USD 2,998 million, with projections of USD 4,314 million for 2024 and USD 4,871 million for 2025, reflecting a year-on-year growth of -3.5%, 43.9%, and 12.9% respectively [2][15]. - Net profit for 2023 was USD 259 million, expected to rise to USD 381 million in 2024 and USD 457 million in 2025, with corresponding earnings per share of USD 0.15, USD 0.23, and USD 0.28 [2][15]. - The company’s operating profit margin is projected to be 12.1% for 2025, slightly down from 13.1% in 2024 [8]. Quarterly Performance - In the third quarter of fiscal year 2025, the company reported a revenue of USD 1,183 million, a 2% decrease year-on-year, with adjusted net profit of USD 102 million [8][9]. - The report anticipates a 13% year-on-year increase in core education revenue for the fourth quarter of fiscal year 2025, amounting to USD 1,036 million [8]. Valuation - The current price corresponds to a price-to-earnings ratio of 12 times for 2025, with an expected profit growth of over 15%, indicating an attractive valuation [8][9]. - The report maintains a target price of HKD 46.00, based on a 15 times price-to-earnings ratio for the education services business [8][9].

Investment Rating - The report maintains a "Buy" rating for the company [4][6]. Core Views - The company is expected to see a bottoming out of its performance, with a positive outlook on profit elasticity for the full year [1]. - The core K12 business shows steady revenue growth, and operational profit margins are anticipated to improve post-autumn 2025 due to cost reduction measures [1][3]. - The non-selective business is projected to have revenue growth guidance of 10-13% year-on-year for Q4 FY25, aligning with market expectations [1][2]. Financial Performance Summary - For Q3 FY25, total revenue was $1.183 billion, a year-on-year decrease of 2%, while revenue excluding selective business was $1.038 billion, reflecting a 21.2% increase [1][2]. - Adjusted operating profit for Q3 was $142 million, with a profit margin of 13.3%, slightly better than previous forecasts [1][2]. - The company expects non-GAAP operating profit margin to improve by approximately 1 percentage point in Q4 FY25 due to a low base effect [3]. Revenue and Profit Forecasts - Revenue forecasts for non-selective business are adjusted to $4.424 billion, $4.819 billion, and $5.538 billion for FY25, FY26, and FY27 respectively [4][10]. - Non-GAAP net profit estimates are revised to $457 million, $550 million, and $654 million for FY25, FY26, and FY27 respectively [4][10]. - The company anticipates a steady increase in revenue and profit margins, with a focus on enhancing management efficiency and optimizing expansion pace [3][4]. Valuation Analysis - The target price is set at $67.25 based on a 20x PE ratio for FY26E, reflecting the company's leading position in the education sector [4][13]. - The report highlights that the current demand for non-academic training remains strong, supporting the company's long-term growth potential [4][10].

Investment Rating - The investment rating for the company is maintained as "Buy" [1] Core Insights - The report highlights that the growth rate of the study abroad business has reached a bottom, and cost reduction actions are alleviating pressure on profit margins [6] - The company reported a revenue of $1.183 billion for 3QFY25, a year-on-year decrease of 2%, while non-selection business (education + cultural tourism) achieved revenue of $1.04 billion, a year-on-year increase of 21.2% [4] - The Non-GAAP net profit attributable to the parent company was $113 million, down 14.3% year-on-year, with a Non-GAAP net profit margin of 9.6%, narrowing by 1.4 percentage points year-on-year [4] Summary by Sections Study Abroad Business - The growth of the study abroad business has slowed, with revenue from overseas exam training and consulting reaching $296 million, a year-on-year increase of 11.4%, which is a slowdown of 35.4 percentage points compared to the same period last year [5] - The high-end one-on-one training business is facing challenges due to its premium pricing, and the demand for studying abroad is returning to normal after the rapid release of pent-up demand from the pandemic [5] New Business Growth - New business revenue (K9 quality training + learning machine business) grew by 34.5% year-on-year to $325 million [5] - The company is expanding its service offerings to enhance the resilience of its study abroad business by adjusting class types and increasing youth overseas exam training services [5] Profitability and Financial Projections - The Non-GAAP operating profit margin for non-selection business narrowed by 1.8 percentage points to 13.3% due to the slowdown in the high-margin study abroad business [6] - The report projects Non-GAAP net profits for FY25, FY26, and FY27 to be $454 million, $534 million, and $636 million respectively, with a DCF target price of $74.8 [6][8]

Financial Performance - For the third quarter of fiscal year 2025, net revenue decreased by 2.0% year-over-year to $1,183.1 million, while net revenue excluding self-operated products and live e-commerce increased by 21.2% to $1,038.3 million[9]. - Operating profit for the third quarter increased by 9.8% year-over-year to $124.5 million, with operating profit excluding losses from self-operated products and live e-commerce rising by 5.0% to $125.5 million[9]. - Net profit attributable to New Oriental shareholders for the third quarter rose by 0.1% year-over-year to $87.3 million[9]. - In the first nine months of fiscal year 2025, net revenue increased by 15.1% year-over-year to $3,657.1 million, and operating profit rose by 28.5% to $436.9 million[10]. - The company reported a Non-GAAP operating profit margin of 13.3% for the third quarter, down from 15.1% in the same period last year[12]. - The operating profit for the quarter was $124.5 million, an increase of 9.8% year-over-year, with a Non-GAAP operating profit of $142.1 million, a slight decrease of 0.2%[17]. - The net profit attributable to shareholders for the quarter was $87.3 million, a year-over-year increase of 0.1%, with basic and diluted earnings per ADS of $0.54[20]. - The Non-GAAP net profit attributable to shareholders was $113.3 million, a year-over-year decrease of 14.3%, with Non-GAAP earnings per ADS of $0.70[21]. - For the first nine months of fiscal year 2025, net revenue was $3,657.1 million, a year-over-year increase of 15.1%[24]. - Net revenue for the three months ended February 28, 2025, was $1,183,055, a decrease of 2.1% compared to $1,207,286 for the same period in 2024[42]. - Operating profit increased to $124,519, representing a 9.6% increase from $113,432 in the prior year[42]. - Net profit attributable to shareholders was $87,255, slightly up from $87,167 year-over-year[42]. - For the nine months ended February 28, 2025, net revenue rose to $3,657,107, an increase of 15.1% from $3,176,907 in the previous year[49]. - Operating profit for the nine-month period was $436,924, a 28.5% increase compared to $339,898 in the same period last year[49]. Cash and Assets - As of February 28, 2025, cash and cash equivalents totaled $1,418.8 million, with deferred revenue increasing by 15.0% year-over-year to $1,749.9 million[23]. - As of February 28, 2025, total assets amounted to $7,447.2 million, a decrease from $7,531.7 million as of May 31, 2024[39]. - Total liabilities decreased slightly to $3,471.7 million from $3,482.7 million during the same period[40]. - Shareholders' equity totaled $3,686.2 million, down from $3,775.9 million[40]. - Cash and cash equivalents increased to $1,418.8 million from $1,389.4 million[39]. - Short-term investments decreased to $1,853.6 million from $2,065.6 million[39]. - Cash and cash equivalents at the end of February 28, 2025, were $1,589,277, a decrease from $2,189,074 at the end of February 29, 2024[54]. Operational Efficiency and Strategy - The company is focusing on enhancing product quality and operational efficiency to drive sustainable growth and profitability[12]. - New Oriental is increasing investments in artificial intelligence technology applications in the education sector to improve operational efficiency and service satisfaction[12]. - The company is actively managing the expansion of its school network and executing strategic plans amid regulatory uncertainties in the private education sector in China[34]. - The company is focused on maintaining and enhancing the "New Oriental" brand while ensuring teaching and service quality[34]. - Future outlook includes potential benefits from recent and upcoming acquisitions, despite ongoing litigation risks[34]. Shareholder Returns and Financial Metrics - The total value of the share repurchase plan has been increased to $700 million, with approximately 14.4 million ADS repurchased for a total value of about $695.5 million as of April 22, 2025[13]. - The company reported a net profit excluding stock-based compensation and other adjustments, indicating a focus on Non-GAAP financial metrics[35]. - The company emphasized the importance of Non-GAAP financial indicators for assessing performance and liquidity[36]. - The weighted average shares used for calculating basic net profit per ADS decreased from 1,653,742,514 in 2024 to 1,630,423,658 in 2025, a reduction of approximately 1.4%[52]. - New Oriental's basic net profit per American depositary share (ADS) for the nine months ended February 28, 2025, was $2.24, up from $1.71 for the same period in 2024, representing a 31% increase[52]. - The diluted net profit per ADS under non-GAAP for the nine months ended February 28, 2025, was $2.55, compared to $2.40 for the same period in 2024, reflecting a 6.25% increase[52]. Cash Flow and Expenses - Operating cash flow for the nine months ended February 28, 2025, was $497,470, down from $745,808 in the same period of 2024, indicating a decrease of approximately 33.3%[54]. - Total revenue costs for the nine months ended February 28, 2025, amounted to $31,297, significantly reduced from $96,661 in the same period of 2024, showing a decrease of about 67.6%[52]. - The company reported a significant increase in cash flow from investing activities, which amounted to $79,891, compared to $11,285 in the previous year[47]. - The company experienced a net cash used in financing activities of $(486,494) for the nine months ended February 28, 2025, compared to $(51,208) in the same period of 2024, indicating a substantial increase in cash outflow[54]. - The impact of foreign exchange rate changes resulted in a cash outflow of $(5,667) for the nine months ended February 28, 2025, compared to $(21,041) in the same period of 2024, showing a decrease in negative impact[54].

Investment Rating - The report maintains a "Buy" rating for New Oriental Education Technology (9901 HK) with a target price adjusted to HKD 46.00, indicating a potential upside of 24.7% from the current price of HKD 36.90 [1][4][10]. Core Insights - The report highlights that the study company is experiencing pressure in its study abroad business while maintaining stable performance in K12 education. The revenue for non-selective business is expected to grow by 22% year-on-year, with an adjusted operating profit margin declining by approximately 2.5 percentage points due to slower growth in study abroad-related services and investments in cultural tourism [2][8]. - The company plans to allocate more resources to youth study abroad services, and with cost reduction and efficiency improvement measures taking effect, there is still potential for long-term profit margin improvement [2][8]. Financial Forecast Adjustments - Revenue projections for FY25E have been slightly adjusted to USD 4,902 million, a decrease of 0.9% from previous estimates. For FY26E and FY27E, revenue is projected at USD 5,670 million and USD 6,420 million, reflecting decreases of 2.2% and 3.9% respectively [3][13]. - The adjusted operating profit for FY25E is forecasted at USD 503 million, with an operating profit margin of 10.3%. For FY26E and FY27E, the adjusted operating profit is expected to be USD 656 million and USD 771 million, with margins of 11.6% and 12.0% respectively [3][13]. - The adjusted net profit for FY25E is projected at USD 474 million, with a net profit margin of 9.7%. For FY26E and FY27E, net profit is expected to be USD 519 million and USD 620 million, with margins of 9.2% and 9.7% respectively [3][13]. Revenue Breakdown - The report provides a detailed breakdown of revenue sources, indicating that the study abroad consulting and preparation services are expected to generate USD 1,182 million in FY25E, while high school education is projected at USD 1,295 million. New business segments are expected to contribute USD 1,268 million [3][8][13].