Results for the fourth quarter of fiscal year 2024: Revenue of 1.1 billion US dollars, which is basically in line with expectations, up 32% year over year, mainly driven by growth in the new education business. The adjusted operating profit was 36 million US dollars, down 54% year on year, falling short of our expectations of 69 million US dollars. The adjusted operating profit margin was 3.2%, down 5.9 percentage points year on year, mainly due to the short-term impact of accelerating the expansion of teaching sites, investment in cultural tourism business, and increasing employee remuneration and rewards. The adjusted net profit of 37 million US dollars was lower than our agreed expectation of 77 million/72 million US dollars by Bloomberg, corresponding to the adjusted net interest rate of 3.2%, a decrease of 4 percentage points from the previous year.

Overview of the core education business: The expansion of teaching sites has accelerated, and the new education business has maintained rapid growth. 1) Traditional business: study abroad examination/ overseas consulting/ adult and college students/ high school income increased 17.7%/17.3%/16.4%/25% year-on-year, contributing about 55% of income. 2) New business: Revenue increased 50% year on year, revenue contributed about 20%, up 2 percentage points from the same period last year, and quarterly enrollment for non-subject training increased 39% year over year to 0.875 million. 3) The expansion of teaching sites accelerated. As of May 31, the number reached 1,025, an increase of 277/114 (+37%/13%, compared with a net increase of 68 compared to the previous quarter). The expansion is expected to be 20-25% in fiscal year 2025. 4) The expansion accelerated in the fourth quarter, while increasing investment in cultural tourism-related business and employee bonuses, which affected the profit margin of the education business.

Financial forecast and valuation: We expect revenue for the first quarter of FY2025 to increase 33% to 1.46 billion US dollars. Excluding Oriental Selection's revenue, we expect revenue to be about 1.26 billion US dollars, an increase of 34% year over year (management guidance 31-34%). The spin-off with Hui will still affect the overall operating profit margin for the 1st quarter, or decrease 3 percentage points year over year. However, excluding Oriental Selection, the operating profit margin is expected to increase by 2 percentage points to 19% year over year, mainly driven by the scale effect of the peak season in the education business. We believe that education and training demand and the company's business performance are still steady. Considering investment in the cultural tourism business, sales with Hui, and the impact of subsequent Oriental selection reforms, the Group's operating profit margin was lowered to 11.3% in FY2025. The conservative principle does not take into account Oriental selection and cash value. It provides 25 times the price-earnings ratio for the 12 months up to the end of February 2025, and the target price was lowered to HK$80/$103 (EDU US), corresponding to the 28/21 times price-earnings ratio for the 2025/26 fiscal year and the 30% revenue growth rate guide for fiscal year 2025. Keep buying.