Jingu Financial News | Sealand issued a research report, stating that New Oriental (09901) will open five offline stores in the Beijing area on December 30, 2024, and will develop a smart learning model integrating online teaching with coaches answering questions offline. On October 23, they announced FY2025 Q1 performance, achieving revenue of 1.435 billion USD, +30% year-on-year, +26% quarter-on-quarter, Non-GAAP net income attributable to the parent of 0.265 billion USD, +40% year-on-year, and Non-GAAP net margin of 18%, +1 percentage point year-on-year.

The report indicated that FY2025 Q1 is the peak season for the education and training industry, and the income growth driven by new businesses meets expectations. The profit margin of the education business has recovered by 2.2 percentage points year-on-year. Q2 is traditionally a low season for the business; therefore, revenue and profit growth may slow down.

The report continued to state that the company's education business is growing strongly, with a rapid pace of new teaching locations opening. Considering the company's accumulated brand reputation, operational experience, and ample available funds in the education and training industry, the report is bullish on the revenue growth of the education business under the logic of capacity expansion. Given the contraction of the study abroad business, the revenue guidance for the company in FY2025 Q2 is slightly below previous expectations due to a low base in the previous year. However, based on industry development and competition analysis, the previous rating is maintained. The report expects the company to achieve revenues of 5.192/6.299/7.476 billion USD in FY2025-2027, with net income attributable to the parent of 0.473/0.634/0.8 billion USD, corresponding to PE ratios of 21/16/12x. Adjusted net income attributable to the parent is expected to be 0.528/0.689/0.876 billion USD, corresponding to adjusted PE ratios of 19/14/11x, and maintains a "buy" rating.