As of the end of the reporting period, the number of company schools and learning centers reached 1,089, a increase of 37%, with a net increase of 64 quarter-on-quarter, maintaining the annual 20-25% capacity expansion guidance.
Futubull Finance App learned that Guosen Securities released research reports stating that it maintains the FY2025-2027 fiscal year revenue forecast for new oriental-S (09901) at 5.113/6.414/7.893 billion US dollars, Non-GAAP net income at 0.528/0.796/1.093 billion US dollars, and maintains a "outperform the market" rating for the company. The bank stated that overall, the education industry is still in a high prosperity development stage, the supply-demand pattern of shortage of high-quality supply has not changed, and the bank also observed that the company's education core business profit margin is as expected in an upward trend, the growth rate of overseas exam preparation consultation and high school business has slowed slightly, but the company has also launched more cost-effective products in response to external demand changes.
Guosen Securities' main points are as follows:
Education revenue in FY2025Q1 increased by 34%, in line with expectations.
In FY2025Q1, net revenue was 1.435 billion US dollars, up by 30.5% year-on-year. Excluding the impact of East Buy, net revenue reached 1.278 billion US dollars, up by 33.5% year-on-year, in line with FY2024Q4 quarterly revenue guidance (31-34%); Non-GAAP operating profit was 0.3 billion US dollars, up by 22.6% year-on-year, Non-GAAP operating profit margin was 20.9%, down by 1.9 percentage points year-on-year, excluding the impact of East Buy, the operating profit margin was 24%, up by 2.2 percentage points year-on-year, reflecting the scale effect brought by revenue expansion; Non-GAAP net profit attributable to shareholders was 0.265 billion US dollars, up by 39.85% year-on-year, exceeding Bloomberg's consensus expectation (+36.08%).
The education's new business growth is strong, with steady growth in overseas & high school segments.
In FY2025Q1, study abroad exam preparation/consulting business increased by 18.8%/20.7% respectively year-on-year, continuing the steady performance from the previous quarter (+18%); revenue from domestic university student training business increased by about 30% year-on-year, with a significant speed-up compared to F24Q4 (+16%); high school training revenue increased by about 21.0% year-on-year, showing a slowdown compared to 24Q4 (+27%), expected to be due to some high-end product demand pressures; revenue from education's new business increased by 49.8%, continuing strong growth, with non-academic literacy training participants at 0.484 million, up by 10.5%, and learning device subscription users reaching 0.323 million, up by 78.5%; the growth rate slowed sequentially (+39.1%) in literacy training participants due to some enrollments brought forward to the 24Q4 quarter and internal conversions into learning device users; e-commerce business increased by about 10%; in July 2024, subsidiary East Buy officially sold "Walk with Brilliance"; cultural tourism revenue was around 0.09 billion US dollars, already profitable with seasonal support.
Maintain the full-year expectation of 20-25% capacity expansion.
As of the end of the reporting period, the company's number of schools and learning centers reached 1089, +37% year-on-year, with a net increase of 64 centers quarter-on-quarter, maintaining the full-year guidance of 20-25% capacity expansion. FY2025Q2 educational income is expected to increase by 25-28%. The company expects to achieve an income of 0.851-0.872 billion US dollars in FY2025Q2, a year-on-year increase of 25-28%. The bank's analysis suggests that the company's new education business and domestic university students are expected to continue to show rapid growth in the second quarter, while overseas and high school businesses are still growing relatively steadily. In addition, considering that the second quarter is traditionally the off-season for the cultural and tourism business, although the marginal profit margin of the education business will continue to improve, the overall operating profit margin is expected to decrease slightly year-on-year due to the drag from cultural and tourism operations.
Risk warning: Strictening policies, intensifying industry competition, slow improvement in business penetration rates, shareholding reduction by shareholders, etc.
