高盛认为，导致估值被低估的因素包括投资者情绪受到影响和对基本面的担忧，并指出，教育行业今年值得关注的关键主题包括K-12学习服务、K-12学习内容解决方案和海外留学。Goldman Sachs expressed an optimistic outlook for the performance of China's education industry giants New Oriental and TAL Education in 2025, citing more reasonable valuations and still strong growth prospects.
According to the Zhitong Finance APP, Goldman Sachs published a research report indicating that after experiencing relatively disappointing stock price performance last year, there is optimism for the performance of China's two major education giants, New Oriental (09901)(EDU.US) and TAL Education (TAL.US), in 2025, due to more reasonable valuations and strong growth prospects. The firm maintains a "Buy" rating on New Oriental, lowering the target price for Hong Kong stocks to 65 HKD and for US stocks to 83 USD; it maintains a "Buy" rating on TAL Education, with the target price lowered to 15 USD.
The report points out that New Oriental and TAL Education represent resilient domestic consumer demand in a highly fragmented market under a stable regulatory environment; thanks to the maturity of learning centers and operational leverage, and in the case of TAL Education, increased revenue recognition from deferred revenue for content solutions, the profit margin expansion trajectories for both companies are clear, with the expected compound annual growth rates for earnings per share for the fiscal years 2024 to 2027 projected to reach 31% and 58%, respectively; in addition, the forecasted PE for New Oriental and TAL Education's core education services in 2025 is 18 times, which may indicate a mispricing compared to the growth prospects of the covered China Internet sector.
Goldman Sachs believes that factors leading to undervaluation include negative investor sentiment and concerns over fundamentals, and notes that key themes in the education industry worth paying attention to this year include K-12 learning services, K-12 learning content solutions, and studying abroad.
In terms of earnings reports, the firm expects New Oriental's core revenue (in USD) for the second quarter of the fiscal year 2025 to grow by 28% year-on-year, reaching 0.874 billion USD, with Non-GAAP operating profit margin decreasing by 1 percentage point to 2.3%; core revenue growth for the third quarter, calculated in RMB, will accelerate to a year-on-year growth of 28%, but due to unfavorable forex factors, growth in USD will slow to 25%. It is expected that TAL Education's revenue for the third fiscal quarter will be 0.569 billion USD, showing a year-on-year growth of 52%, with Non-GAAP operating loss of 25 million USD and Non-GAAP operating profit margin of -4.3%.
