新东方：Core educational business sustained strong momentum

Investment Rating - The report maintains a BUY rating for New Oriental with a target price of US$95.00, down from the previous target of US$102.50, indicating a potential upside of 37.2% from the current price of US$69.25 [2][3]. Core Insights - New Oriental's core educational business has shown strong momentum, with a 32% year-over-year increase in net revenue for 4QFY24, reaching US$1,137 million, aligning with estimates [2]. - Non-GAAP net income for 4QFY24 declined by 41% year-over-year to US$36.9 million, primarily due to accelerated capacity expansion and increased investment in live streaming e-commerce [2]. - For FY24, total revenue and non-GAAP net income grew by 44% and 47% year-over-year, reaching US$4,314 million and US$381 million, respectively [2]. - Management expects total revenue for 1QFY25E to grow by 31-34% year-over-year, projecting a range of US$1,255-1,284 million [2]. Financial Performance Summary - FY23A revenue was US$2,998 million, increasing to US$4,314 million in FY24A, with projections of US$5,267 million for FY25E and US$6,258 million for FY26E [3][11]. - Adjusted net profit rose from US$258.9 million in FY23A to US$381.1 million in FY24A, with forecasts of US$571.7 million for FY25E and US$791.4 million for FY26E [3][11]. - The adjusted EPS is projected to increase from US$2.30 in FY24A to US$3.45 in FY25E and US$4.78 in FY26E [3][11]. Business Segments - The educational business has shown steady recovery, with overseas test prep and study consulting revenues growing by 17.7% and 17.3% year-over-year, respectively, in 4QFY24 [2]. - New educational initiatives reported a revenue increase of 50.3% year-over-year in 4QFY24, contributing approximately 20% to total revenue [2]. - East Buy is undergoing business adjustments, with revenue expected to decline by 20% year-over-year to US$741 million in FY25E due to management changes [2]. Valuation Methodology - The report employs a sum-of-the-parts (SOTP) valuation, estimating the educational and consulting business at US$89.9 per share based on a 30x FY25E PE, reflecting New Oriental's strong market position [8]. - East Buy is valued at US$1.7 per share based on a 7x FY25E PE, while the tourism segment is valued at US$3.3 per share based on a 15x FY25E PE [8].