After New Oriental Education & Technology Group live broadcast with goods became the most concerned topic in the market over the weekend, $New Oriental Education & Technology Group online (01797.HK) $skyrocketed again in early trading on June 13. As of press time, the company's share price rose more than 90%, New Oriental Education & Technology Group online closed up 39.37% last trading day, the share price has doubled in just two trading days.

Behind the recent rise of New Oriental Education & Technology Group series stocks, New Oriental Education & Technology Group's "Oriental selection" live studio (the main operator is New Oriental Education & Technology Group online) has created the screen brushing effect in a very short time.

Why is the Oriental selection so popular?

After the announcement of the "double reduction" policy in the education industry in 21 years, New Oriental Education & Technology Group completely stopped K12 business online, and at the end of 21 years, teacher Yu Minhong launched the agricultural business "Oriental selection" brand on Douyin platform to enter the field of live streaming. The main operator is wholly owned by New Oriental Education & Technology Group online.

Oriental selects and sells agricultural products, and most of the anchors are former famous New Oriental Education & Technology Group teachers. In the studio, in addition to high-density bilingual goods, they also export general knowledge of life, geography, poetry, and so on.On June 10, 2002, "Anchor New Oriental Education & Technology Group" went viral and the topic "never thought I could learn English in the studio" topped the list of hot topics on Douyin.

Since the popularity of Douyin on June 10th, the number of followers on Douyin has grown rapidly from 1 million-to 2.9 million + (as of 7pm on June 12), GMV has grown from a million level to nearly 20 million (June 11), and live streaming has entered the top 10 of Douyin.

Compared with the head Douyin studio, how is the Oriental selection going?

Since its inception, Oriental selection is committed to selecting high-quality agricultural products, through live broadcast with goods, building agricultural products e-commerce platform and other ways to achieve the docking of high-quality agricultural products and consumers. As of June 11, 612 of a total of 736 commodities selected by Oriental were food department stores (accounting for 83.2%).

According to CITIC's research reportIn terms of price:The average unit price of Oriental selection Douyin studio is about 60-70 yuan (total sales / number of pieces sold), which is lower than 100 + yuan of other live rooms, mainly because the products are mainly food department stores. Among them, 80% + the amount of a single transaction is less than 100 yuan, and 60% + the amount of a single transaction is less than 50 yuan.

In terms of user traffic:Oriental selection ranked among the top five in Douyin studio on June 10, with outstanding GMV and viewing numbers, and there is still room for improvement in the number of followers. At the current growth rate, the number of followers of Oriental selection Douyin account is expected to exceed 10 million in a week.

Horizontal comparison of the head anchors of Douyin platformThe number of top 10 fans is 10 million +, the average daily GMV is 10 million +, and the average number of daily viewers is 5w +. In contrast, the Oriental selection of nearly two days of GMV, the number of viewers has entered the head broadcast room, the follow-up still need to increase the number of fans to retain, there is still a lot of room for improvement.

Compare to making friends (formerly Luo Yonghao) Douyin studioThe number of its fans has reached 1700w, the average GMV per game is 5 million +, and the daily average GMV is 10 million. Oriental selects the main agricultural products, with food department stores accounting for 80% +, and the guest list value is nearly half of that of making friends (73 yuan). Cosmetics, books and stationery and other categories are gradually developing, and the subsequent guest list value is expected to increase gradually.

How to look at the oriental selection of future development space and New Oriental Education & Technology Group online valuation?

CITIC believes thatAssuming that according to the current fan growth rate (70-800000 per day), if the decline rate is not high, the number of fans selected by the East is expected to reach 10 million in the next two weeks.Assuming that the average daily GMV of 10 million yuan is estimated, the annual GMV of Oriental selection will reach 3.7 billion yuan. In this reference, the net profit / GMV can reach 3%. With the increase in the proportion of self-owned products and the increase in the unit price of customers, the profit margin is expected to increase to 5%. Here, 20 times PE and 3.7 billion market capitalization are given.

In addition, the company's university business income of 500 million yuan, according to 10% net interest rate, 20 times PE, corresponding to 1 billion market capitalization. Considering the company's net cash and equivalents on hand is 1.6 billion yuan, and the combined market capitalization is 6.3 billion yuan. at present, the company's market capitalization is 5.3 billion yuan, which still has nearly 20% room for increase. Considering the continuous development of other live broadcast rooms under the company, New Oriental Education & Technology Group still has the potential to improve online follow-up.

Risk hints: potential policy risks, product quality risks, and lower-than-expected user growth risks in bilingual live streaming.

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