Jinwu Financial News | Guotai Junan released a research report stating that Oriental Selection (01797) and New Oriental (09901) issued a joint announcement. The directors of the two parties each approved the termination of the early subscription agreement, and New Oriental and Yu Minhong each promised to purchase a total value of HK$700 million Oriental Selected shares on the Stock Exchange at market price. Among them, New Oriental has promised to buy Oriental Selection shares with a total value of HK$660 million, which will be held by Yu Xinfang Benefit after purchase; and Minhong has promised to buy a total value of HK$40 million Oriental Select Shares. The law that selects shares will be controlled by Yu Minhong or him after purchase Group beneficial ownership. The share purchase will be carried out gradually over a period of 6 to 12 months from the announcement date.
The bank said that considering the company's current relatively abundant cash flow situation, the company believes that selling the education business to the Group and collecting 1.5 billion yuan in cash is not the main purpose of the subscription; ② By purchasing shares directly between the Group and Yu Minhong as an alternative, it maintains a dominant position in the selection and does not dilute the shareholders' holdings of other shareholders. Furthermore, it is also aimed at further enhancing the liquidity of the company's shares on the Stock Exchange while further stabilizing market expectations.
The bank believes that the current market is very divided over the company's positioning as MCN, retail, and product companies. There is still uncertainty about the model at this stage, organizational capabilities and supply chain stability are gradually being consolidated and explored, and brand strength is still being built. Considering the company's undefined business model and retaining overseas expectations, the adjusted non-GAAP net profit for FY2024-26 was maintained at $996/10.93/1,291 million yuan, maintaining an increase in holdings rating.