On July 29th, Gelunhui reported that East Selection, a subsidiary of New Oriental, announced last week that it would sell 100% stake in the live e-commerce business of With Huitong (Beijing) Technology under the With Huitong brand to Dong Yuhui, a related party, for CNY 76.59 million. Daiwa's research report said that Dong Yuhui's departure is expected to cause a 2%-4% decline in New Oriental's revenue for the fiscal year 2025, while the negative impact on profitability is about 5%-7%. It is within the controllable range because its core business has operating leverage to offset the above impact. In addition, as the profitability of live e-commerce further declines, the market will see that New Oriental's profit comes from its core education business. The bank reiterated its "buy" rating on New Oriental.
大行评级｜大和：重申对新东方“买入”评级 董宇辉离开料对盈利影响约5%至7%
Daiwa reaffirms buy rating for New Oriental, with Dong Yuhui's departure expected to have a profit impact of about 5% to 7%.
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