Investment Rating - The report maintains a "Buy" rating for New Oriental Education Technology (9901 HK) with a target price of HKD 75.00, indicating a potential upside of 53.8% from the current price of HKD 48.75 [1][4][9]. Core Insights - The overall performance of New Oriental is expected to be influenced by uncertainties surrounding the Oriental Selection business, but the education and cultural tourism segments remain robust. The contribution of Oriental Selection to overall profits is deemed minor [1][2]. - The revenue contribution from Oriental Selection for the fiscal year 2025 is adjusted down to 12% from the previous 15%, with revenue forecasts for Oriental Selection set at USD 623 million for FY25 and USD 710 million for FY26 [2][3]. - The education and cultural tourism businesses are projected to grow at a rate of 31% for FY25, with an operational profit margin improvement of 1 percentage point to 13%, translating to approximately USD 580 million [2][3]. Financial Projections - Revenue for FY25 is forecasted at USD 5.079 billion, with a year-on-year growth of 31%. The operational profit margin is expected to improve to 13% [2][10]. - The adjusted net profit for FY25 is projected at USD 553 million, with a net profit margin of 10.9% [3][10]. - The report anticipates a revenue of USD 1.007 billion for Q2 FY25, reflecting a year-on-year increase of 28% [2][6]. Key Financial Metrics - The gross margin is expected to improve to 54.9% in FY25, with operational profit margins projected to reach 10.9% [3][10]. - The adjusted operating profit for FY25 is estimated at USD 551 million, with a significant increase in net profit expected in subsequent years [3][10]. - The report highlights a projected increase in cash flow from operating activities, expected to reach USD 1.138 billion by FY25 [10].
新东方-S：教育业务稳健，利润率优化趋势不改