According to a report released by BOC International, the stock price of New Oriental (EDU.US) has recently declined due to rumors related to Dongfang Zhenxuan (01797.HK). However, the bank recommends that the market pay attention to the stable fundamentals of New Oriental, as the education business accounts for about 80% of New Oriental's sales and over 80% of its profits. The high growth in the education new business, high school education and study abroad training and consultation sector will drive the increase in New Oriental's revenue and profit.

The report stated that due to stronger-than-expected growth in the education business, New Oriental's sales growth for the fourth quarter of fiscal year 2024 is expected to be raised from a year-on-year growth of 26% to a growth of 30.5%. Considering that Dongfang Zhenxuan may continue to drag down New Oriental's profit margin and slightly decrease the operating profit margin under non-general accounting principles, even if the profit margin of Dongfang Zhenxuan is expected to increase quarterly in the future. The bank has slightly raised the target price of New Oriental's US stock to $105.23 and reiterated its "buy" rating.