Jingu Finance News | Huachuang Securities released a research report, stating that New Oriental (09901) achieved a total revenue of 1.435 billion USD in FY25Q1 (+31% YoY), and Non-GAAP net income attributable to the parent company was 0.265 billion USD (+40% YoY). The company guided that FY25Q2 revenue (excluding the selection process) is expected to be between 0.851-0.872 billion USD (+25%-28% YoY), mainly due to Q2 being the traditional off-season.
The bank pointed out that in FY25Q1, core education business revenue (excluding the selection process) increased by 33.5% YoY, at the upper end of the previous guidance (+31%-34% YoY), indicating a high level of prosperity in the education main business. By segment, revenue growth rates were: overseas exam preparation +19%, overseas consultation +21%, adult and college student domestic exam preparation +30%, new education business +50%, maintaining high growth. In addition, the company's cultural and tourism business showed impressive growth, with Q1 revenue increasing by 221% YoY, promising further growth in the future.
The bank expressed a bullish long-term view on the education industry's prosperity and the company's leading advantages. Currently, the company's capacity expansion and operational performance are improving, with expectations for further profit improvement after climbing costs related to opening new branches. However, in the short term, the company's overseas business is somewhat affected by weak macroeconomic conditions. Therefore, the bank slightly lowered its profit forecast, projecting the company's revenue for 2025-2027 to be 5.208/6.232/7.6 billion USD (previously forecasted revenue for FY25-26 was 5.329/6.509 billion USD), with a YoY growth of 21%/20%/20%; adjusted net income attributable to the parent company is expected to be 0.525/0.7/0.901 billion USD (previously forecasted profit for FY25-26 was 0.531/0.746 billion USD), with a YoY growth of 34%/33%/29%. Using the SOTP valuation method for analysis, the total corresponding market cap is 129.8 billion HKD (exchange rates at 0.91 RMB/HKD), with a corresponding target price of 79 HKD, maintaining a 'recommendation' rating.