UBS issued a report, reiterating$New Oriental (EDU.US)$The target price was raised to $60 from $39.8. The bank said its live e-commerce business and new educational businesses such as non-academic after-school tutoring (AST) and intelligent learning systems jointly led to a bright spot.

The bank estimates that New Oriental Education & Technology Group's quarterly revenue grew by a further 41 per cent on a quarter-on-quarter basis, significantly exceeding the bank's forecast, mainly due to the launch of new live channels in the second quarter and an increase in own-brand products. The bank expects New Oriental Education & Technology Group online revenue in the second half of the year to grow by 25 per cent over the previous half, slightly slower than the rapid growth in the second quarter, but still higher than expected.

UBS said it increased New Oriental Education & Technology Group's revenue by 9.8% in the third quarter of 2023 and 9.5% in fiscal year 2023 to reflect the good trajectory of New Oriental Education & Technology Group online in the second quarter and to bring strong revenue growth into fiscal years 2024 and 25. In terms of profit margins, the bank cut its gross margin branch by 530bp and 487bp for fiscal years 2023 and 24, expecting low-margin private-label products to further increase revenue contribution, but estimated that higher revenue would lead to better operating leverage. The bank raised its adjusted net profit forecast for the 2023-2025 fiscal year by 5 to 16 per cent.