We believe that New Oriental continues to maintain its leading position in international education and that the education business continues to expand steadily.

The expansion in FY2025 may be slower than in FY2024, but it will continue to lead to profit margin optimization. We expect revenue from the education business to grow at a compound rate of 24% in the 2024-27 fiscal year, and will maintain a steady growth trend. Corresponding to the profit for the 12 months up to the end of February 2026, the education business was given a price-earnings ratio of 20 times. The target price was maintained at HK$80/$103 regardless of Oriental Selection's value contribution, and the purchase rating was maintained.

Earnings preview for the 1st quarter of FY2025: We maintain our previous revenue growth forecast. Total revenue is expected to increase 33% to 1.46 billion US dollars. Among them, the total revenue of the non-Oriental selection business is expected to be 1.247 billion US dollars, up 33% year over year, within the 31-34% range of the company's guidelines, compared to 31% of Visible Alpha and 30.9% of Bloomberg. By business, the estimated income for studying abroad exam preparation is +21% /high school +27% /college students +26% /new business +52%, compared with +19% /new business +58% expected by Visible Alpha. We estimate adjusted operating profit of 0.32 billion US dollars and net profit of 0.26 billion US dollars, corresponding to an adjusted operating profit margin of 21.9% and a net profit margin of 17.7%, mainly driven by about 2 percentage points year-on-year optimization of the adjusted operating margin of non-Oriental Selection Business.

Offline teaching site expansion progress update: First quarter or 6% month-on-month increase. According to our statistics, as of August 31, the number of New Oriental teaching sites added 60+ over the same period. Among them, literacy +39/examination+17/international+6, the literacy campus continues to grow at an accelerated pace. The number of first-tier/new first-tier cities increased by 44, and is still the main expansion area.

According to the current expansion guidelines of 20% + in FY2025, it is expected that the pace of expansion of subsequent teaching sites may slow down compared to FY2024.