20260129-招银国际-2QFY26_results_beat_strong_core_educational_business_and_solid_margin_expansion_6页_667kb

New Oriental (EDU US) Summary

Core Content

New Oriental (EDU US) reported strong performance in its 2QFY26 results, with net revenue increasing by 15% YoY to US$1.19 billion, surpassing the Bloomberg consensus estimate. Non-GAAP operating income surged by 207% YoY to US$89.13 million, significantly beating the consensus of US$54.87 million. The growth was primarily driven by enhanced operational efficiency and improved utilization in the educational business.

The company raised its FY26E net revenue forecast to US$5.29–5.49 billion, indicating continued momentum in its core educational and high-school tutoring segments. The management expects revenue growth to continue in 3QFY26E, with projections of 23% for new educational initiatives, 18% for high-school tutoring, 15% for domestic test prep, and 2% for overseas-related business.

Key Financial Highlights

• Revenue (US$ mn):

  • FY24A: 4,314
  • FY25A: 4,900
  • FY26E: 5,467
  • FY27E: 5,991
  • FY28E: 6,464
  • YoY growth: 43.9% (FY24A), 13.6% (FY25A), 11.6% (FY26E), 9.6% (FY27E), 7.9% (FY28E)

• Adjusted Net Profit (US$ mn):

  • FY24A: 381.1
  • FY25A: 517.1
  • FY26E: 594.2
  • FY27E: 695.4
  • FY28E: 761.7

• EPS (Adjusted):

  • FY24A: 2.30
  • FY25A: 3.19
  • FY26E: 3.74
  • FY27E: 4.38
  • FY28E: 4.80

• P/E (x):

  • FY24A: 31.5
  • FY25A: 25.7
  • FY26E: 18.6
  • FY27E: 15.5
  • FY28E: 13.4

• Current Price: US$58.95

• Target Price: US$78.00 (up from US$76.00)

• Up/Downside: 32.3%

Business Segments

• New Educational Business Initiatives: Revenue grew by 21.6% YoY, driven by 35% YoY growth in active paid users of the intelligent learning system and 6% YoY increase in non-academic tutoring course enrolment.
• Overseas Test Prep Business: Increased by 4% YoY despite macro uncertainty.
• Domestic Test Prep Revenue: Rose by 12.8% YoY.
• East Buy: Recovered by 6% YoY in 1HFY26, attributed to product category expansion and supply chain improvements.

Margin Expansion

• Non-GAAP OPM: Increased by 5ppt YoY to 7.5% in 2QFY26, due to operational efficiency and utilization improvements.
• GPM: Improved by 1ppt YoY.
• S&M expense ratio: Declined by 3ppt YoY.
• Expected Non-GAAP OPM in 3QFY26E: 13.1% (up 1ppt YoY).
• Share Repurchases: The company repurchased 1.6 million ADSs for US$86.3 million over the past three months, equivalent to 1% of the current market cap.

Valuation and SOTP

• Total Valuation (US$ mn): 13,739.7
• Holdco discount: 10%
• Final Valuation (US$ mn): 12,365.8
• Valuation per ADS: US$78.0
• SOTP Breakdown:
  • Educational & Consulting: US$13,210.3 (96.1% of total valuation) at 25x FY26E PE.
  • East Buy: US$317.1 (2.3%) at 12x FY26E PE.
  • Tourism and Others: US$212.3 (1.5%) at 10x FY26E PE, which is a discount to other OTA platforms.

Peer Valuation Comparison

• Education Sector:

  • TAL: 34.2 (2025E), 23.5 (2026E), 18.3 (2027E)
  • Youdao: 38.2 (2026E), 26.8 (2027E)
  • Gaotu: 15.7 (2025E), 12.7 (2026E), 10.7 (2027E)
  • Fenbi: 15.7 (2025E), 12.7 (2026E), 10.7 (2027E)
  • Average: 25.0 (2025E), 24.8 (2026E), 18.3 (2027E)

• E-commerce Sector:

  • Alibaba: 27.7 (2025E), 19.3 (2026E), 16.4 (2027E)
  • Pinduoduo: 9.9 (2025E), 8.6 (2026E), 7.3 (2027E)
  • JD.com: 11.6 (2025E), 9.7 (2026E), 7.0 (2027E)
  • VIPShop: 7.5 (2025E), 7.0 (2026E), 6.7 (2027E)
  • Kuaishou: 14.8 (2025E), 13.0 (2026E), 11.2 (2027E)
  • Average: 14.3 (2025E), 11.5 (2026E), 9.7 (2027E)

• OTA Sector:

  • Trip.com: 9.6 (2025E), 14.7 (2026E), 13.0 (2027E)
  • Tongcheng: 14.7 (2025E), 12.8 (2026E), 11.4 (2027E)
  • Average: 12.2 (2025E), 13.8 (2026E), 12.2 (2027E)

Analyst Ratings

• CMBIGM Rating: BUY
• Target Price: US$78.00 (up from US$76.00)
• Reasons for BUY: Strong core educational business, solid margin expansion trend, and attractive shareholder return.

Shareholding and Stock Data

• Market Cap (US$ mn): 9,361.2
• Avg 3 mths t/o (US$ mn): 44.7
• 52w High/Low (US$): 60.71/41.22
• Total Issued Shares (mn): 158.8
• Shareholding Structure:
  • Minhong Yu: 12.5%
  • First Beijing: 11.0%

Share Performance

• 1-mth: 6.4% (Absolute), 4.9% (Relative)
• 3-mth: 2.0% (Absolute), 2.6% (Relative)
• 6-mth: 26.1% (Absolute), 11.7% (Relative)

Key Financial Ratios

• Gross Profit Margin: 55.2% (FY26E)
• Operating Margin: 11.0% (FY26E)
• Adj. Net Profit Margin: 10.9% (FY26E)
• ROE: 13.0% (FY26E)
• Current Ratio: 1.6 (FY26E)
• Receivable Turnover Days: 5.0 (FY26E)
• P/B: 2.3 (FY26E)

Disclaimer

The report is prepared for informational purposes only and does not constitute investment advice. It is not suitable for all investors. The information may be inaccurate, incomplete, or subject to change without notice. CMBIGM is not a registered broker-dealer in the U.S. and may have conflicts of interest. Investors are advised to consult with a financial advisor before making any investment decisions.