Golden Finance News | Swhy issued a research report, forecasting that New Oriental (09901) first quarter of fiscal year 25 (1QFY25, 2024.6-2024.8) revenue of 1.462 billion USD, a year-on-year growth of 32.9%, Non-GAAP net income attributable to the mother of 0.277 billion USD, a year-on-year growth of 46.4%. The significant increase in revenue and profit is driven by the sustained growth of the education business.

The bank expects 1Q revenue from East Buy to contribute approximately $0.22 billion, with revenue shares of 15%, lower than 19% in 4QFY24 by about 4 percentage points. The bank expects East Buy to be close to breakeven, mainly due to one-time costs related to the separation from Huitong's live broadcast room. The bank expects the company's e-commerce business profit margin to gradually stabilize, with revenue contribution of approximately $0.77 billion in fiscal year 2025, and net income of $0.022 billion. Corresponding revenue share is about 14.2%, and profit contribution share is about 4.5%.

The bank stated that due to the industry still being in a boom cycle, despite the company's rapid expansion of teaching outlets, benefiting from the tight supply and demand pattern, the company's profit margin in the education business continues to expand. The bank expects the Non-GAAP operating profit margin to expand by 2 percentage points year-on-year to 24.3% in 1QFY25. The Non-GAAP operating profit of the education business in 1QFY25 is expected to increase by 44.9% year-on-year to 0.302 billion USD. The bank maintains its forecast for Non-GAAP net income attributable to the mother for fiscal years 25/26/27 at 0.493 billion/0.672 billion/0.891 billion USD. Maintaining the target price at 109.5 USD under the SOTP valuation method (85.6 Hong Kong dollars, with each ADR equivalent to 10 ordinary shares, trading in Hong Kong Stock Exchange is for ordinary shares), corresponding to a 35.8% increase from the current price (30.4% increase in Hong Kong Stock Exchange), and maintains a buy rating.