Futu news on November 18thNew Oriental Education & Technology Group online after being included in the Hong Kong Stock Connect, southward capital holdings continue to increase, the company's share price has also hit new highs.New Oriental Education & Technology Group online climbed to the top again today. As of press time, it is now up 12.64% to HK $22.10, with a turnover of HK $154 million.In additionThe stock has been included in the Hong Kong Stock Connect since September, and as of November 13, southward capital holdings have increased all the way to the latest 6.63%. AndThe share price has risen more than 100% this year.

According to the latest data from the Securities and Exchange Commission (SEC), by the end of the third quarter, China-listed stocks continued to maintain a core position in Hillhouse Capital's US stock holdings, with iQIYI, Inc. still the largest heavy stock, while TAL Education Group, New Oriental Education & Technology Group, Pinduoduo, BABA, Beep Mile Education and Internet companies received significant increases. Among them, TAL Education Group and New Oriental Education & Technology Group, two education enterprises, increased their holdings of Hillhouse 547600 shares and 1.0588 million shares in the third quarter.

CITICAccording to the previous research report, it is optimistic about the content advantage of New Oriental Education & Technology Group's outstanding online teacher resources + high-quality course experience, the customer advantage of group brand endorsement + accurate advertising, and the strategic advantage of Kmur12 based on university business. It is considered that the company has the basic advantage of becoming one of the ultimate winners under the trend of increasing concentration of online education. under this basic judgment, combined with the prospect of online K12 education market scale, the value space of the company is significant.

However, in view of the adjustment of the company's university and preschool business, the double division of K12 large class is still in the accumulation period, and the investment in the self-developed live broadcast system, the company's FY2020-2022 revenue forecast is reduced to 1.317 billion / 2.106 billion / 3.689 billion yuan (formerly 1.477 billion / 2.399 billion / 3.793 billion yuan). The corresponding adjusted net profit forecast of FY2020~2022 Company is-245 million /-69 million / 262 million yuan (original-217 million /-147 million / 108 million yuan), and the corresponding EPS forecast is-0.26 / 0.07 / 0.27 yuan respectively.Although the short-term valuation of the current price is high, we are still optimistic about the long-term space of the company and suggest active allocation.

UBS had previouslyIt issued a report to raise New Oriental Education & Technology Group's online bid price from HK $14.55 to HK $25, maintaining its "buy" rating.

New Oriental Education & Technology Group's online share price rose more than 50 per cent after it was included in Hong Kong Stock Connect, and its southbound stake also rose from 1 per cent of freely tradable shares to 23 per cent, the bank said. The bank believes that the company has a number of positive factors to support the share price, including the recent strong growth of mobile applications, the accelerated expansion of Oriental Youbroadcast and K12 small-class businesses, and the positive performance of the Group's fiscal quarter gross profit margin. Relevant factors support the bank's forecast of future revenue and gross margin expansion, especially after fiscal year 2022, which is not reflected in the share price.

At the same time, New Oriental Education & Technology Group online still has a number of issues to deal with in the 2020 fiscal year, including the recent strategic restructuring of non-core business, resulting in a 4 per cent reduction in revenue forecast for the current fiscal year. At the same time, based on contacts with senior executives of parent company New Oriental Education & Technology Group Education (EDU), it is estimated that R & D expenditure and sales and marketing expenses may be higher than expected, but the related factors have been more or less reflected in the stock price, and the increased operating leverage of K12 business will also offset the negative impact in fiscal year 2021.