New Street Research - New Oriental Education Technology Group Inc. Sponsored ADR (N1U) EDU 3QFY24 Results: Margins could be Under Pressure due to East Buy

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New Street Research

Jin Yoon

EDU 3QFY24 Results: Margins could be Under Pressure due to East Buy

What’s new: New Oriental’s reported 3QFY24 top-line results beat consensus and our expectations. Margins were below expectations partly due to investments related to East Buy. We maintain our PT at USD80.

Analysts:
Jin Yoon

25/04/2024 1 EN

Underlying

New Oriental Education & Technology Group Inc. Sponsored ADR

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US6475811070 Germany

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New Street Research

Provided by our team of experienced analysts, our work is idea driven, based on independence of thought, sector expertise, and firmly focussed on fundamentals and valuation.

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Pan European Telecom Services and Cable

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Analysts

Jin Yoon

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EDU 1QFY25 Results: Margin Pressure in 2QFY25

What’s new: New Oriental’s reported 1QFY25 top-line results that were largely in-line with consensus. Margin could see downward pressure in 2QFY25 partly due to lower seasonality in the education business coupled with continued investments in the tourism segment. We lower our PT from USD70 to USD65 due to lowered outlook. Our revised PT of USD65 implies a 20.0x FY25E P/E. We maintain our NEUTRAL rating. Analysts: Jin Yoon

October 24, 2024 October 24, 2024 1 EN

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New Oriental Education & Technology Group Page 8 (EDU US): 1QFY25: In line; moderated growth outlook in 2QFY25 on low seasonality.

EDU’s 1QFY25 top-line slightly missed expectations. Revenue grew 30% yoy to US$1,435m, slightly missing consensus estimate and previous guidance of 31-34% yoy. Non-GAAP net profit rose 40% yoy to US$265m, above our and consensus estimates, while net margin inched up 1ppt yoy to 18% for 1QFY25. EDU expects 2QFY25 revenue (excluding East Buy) to rise 25-28% yoy to US$851.4m-871.8m, 1-2ppt below expectations. Maintain BUY with a lower target price of US$85.00 (HK$66.00).

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EDU 3QFY24 Results: Margins could be Under Pressure due to East Buy

EDU 1QFY25 Results: Margin Pressure in 2QFY25

New Oriental Education & Technology Group Page 8 (EDU US): 1QFY25: In line; moderated growth outlook in 2QFY25 on low seasonality.

Greater China Daily: Thursday, October 24, 2024

Alphabet (GOOGL, Buy, $213 target) Forget Chrome, 3P payments are the heart of the issue

SATS: DBS merger breaks

3Q24 Broadband Trends: FWA capacity limits; FWA demand limits

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