Before October 22nd$New Oriental Education & Technology Group (EDU.US) $Announce the results for the first quarter of fiscal year 2020. The data shows:

• Net income was $1.072 billion, up 24.6% from a year earlier.

• Operating profit was $246 million, up 52.6% from a year earlier.

• The net profit attributed to New Oriental Education & Technology Group was about US $209 million, an increase of 69.6% over the same period last year.

• Adjusted earnings per share were $1.45, up 25.3% from a year earlier.

Compared with Bloomberg's expectations, net income growth was in line with expectations, but all data at the profit level exceeded market expectations.

K12 remains the main driver of growth, Mr Yu said. In renminbi terms, its overall revenue grew 40 per cent year-on-year, including 38 per cent at Youneng Middle School and 44 per cent for bubble children.

Thanks to better-than-expected performance, New Oriental Education & Technology Group's guidance for the next quarter is more optimistic, with an income range of $750 million-$770 million and a year-on-year growth of 30-33 per cent in renminbi terms.

Since the beginning of the year, New Oriental Education & Technology Group's share price has doubled from $50 to around $117. As of press time, New Oriental Education & Technology Group was up more than 2.5 per cent before trading.

The number of students has soared and offline expansion has slowed down.

New Oriental Education & Technology Group's financial report ends on May 31, and the first quarter of the new fiscal year (FY2020Q1) is from June to August, including the peak season of education and training during the summer vacation. From the perspective of quarterly revenue, New Oriental Education & Technology Group is obviously affected by seasonality and tends to perform best in the first quarter of the fiscal year.

Reviewing past data, it can be found that New Oriental Education & Technology Group's revenue growth slowed down after the rapid growth in fiscal year 2018, but remained at more than 20 per cent. In the highly competitive education market, this performance is remarkable.

The main factor driving revenue growth is the number of enrolled students, with the number of New Oriental Education & Technology Group students reaching 2.61 million in the quarter, an increase of 50.4 per cent over the same period last year. In the first quarter, the performance was the highest since fiscal year 2017.

New Oriental Education & Technology Group relies on schools and learning centers in major cities for education and training business. New Oriental Education & Technology Group has a total of 1261 outlets this quarter, an increase of seven over the previous quarter, and the pace of expansion has slowed down.

In the context of the slowdown in the number of new schools, the number of students still maintains a significant high growth, and the revenue contributed by individual schools has also increased, which shows that New Oriental Education & Technology Group has improved the operational effectiveness of the network.

Sales expenses are properly controlled and profitability is highlighted.

Under the Non-GAAP caliber, New Oriental Education & Technology Group's operating profit (Operating income) for the current quarter reached 260 million US dollars, an increase of 46.8% over the same period last year.

The revenue growth rate maintained the normal level, but the operating profit increased significantly, which was due to the effective control of the cost level.

In the quarter, New Oriental Education & Technology Group's income cost (Cost of revenues) and administrative expenses (General and administrative expenses) were $440 million and $280 million, respectively, up 19.8% and 21.6% from a year earlier, both of which were lower than revenue growth.

But the more prominent performance is sales and marketing expenses (Selling and marketing expenses), which rose only 1.9 per cent year-on-year to $101 million in the quarter.

Reviewing the data of sales and marketing expenses in previous years, we can see that this quarter has achieved remarkable results in controlling this expenditure. In fact, before the announcement of the financial results, the form of cost reduction had already emerged.

According to research institutions, New Oriental Education & Technology Group raised the prices of some courses in this summer promotion compared with previous years. In this case, the number of students is still high compared with the same period last year, New Oriental Education & Technology Group's brand influence is strong, customer loyalty is no doubt.

At a time when expenses are under control, all profit indicators of New Oriental Education & Technology Group have exceeded market expectations, and the operating profit margin of Non-GAAP has increased from 20.4% in the same period last year to 24.0% Nonmuri GAAP with a net profit of US $230 million.

Conclusion: non-stop classes will lead to more growth.

With the high demand in China's education industry, New Oriental Education & Technology Group, relying on his long-established brand image, has maintained rapid growth in a highly competitive market and has shown strong profitability in school outlets in most parts of the country.

Recently, China Merchants International has set a target price of $140. at present, New Oriental Education & Technology Group's share price still has about 20% room to rise.