宏观不确定性将影响收入增长和利润预期

Macro uncertainty to impact revenue growthand marginoutlook Target PriceUS$80.00(Previous TPUS$87.00)Up/Downside31.5%Current PriceUS$60.84 New Oriental announced2QFY25 results on21 Jan: net revenuewas upby19% YoY to US$1,039mn (+31% YoY if excluding revenuefrom East Buy), inline with our/consensus estimate; non-GAAP net incomedeclinedby29% YoYto US$36mn,belowour/consensus estimate of US$43/45mn, primarily due totheimpactofEast Buy adjustment and investment in tourism business.For3QFY25E, managementguidednet revenue (excluding revenue from East Buy)to grow by18-21% YoY to US$1.01-1.03bn,also below ourexpectationasmacro uncertainty impacts the high-end businesses and competition intensifies.That said,managementnotedthat New Oriental is still gaining market share.WetrimFY25-27Etotal revenue forecast by2-3%in view of the softer-thanexpectedrevenue guidance.We lower our SOTP-derived target price toUS$80.0 (previous: US$87.0).Maintain BUY. Saiyi HE, CFA(852) 3916 1739hesaiyi@cmbi.com.hk Wentao LU, CFAluwentao@cmbi.com.hk Ye TAO, CFAfranktao@cmbi.com.hk Educational businesses to decelerate in 3QFY25E.Overseastest prepand overseas study consultingbusiness revenue grew by 21% YoY and31% YoY in 2QFY25,together accounting for c.24% of total revenue.Domestic test prep revenuewas up by 35% YoYand accounted for c.9% oftotal revenuein 2QFY25.New educational business initiatives revenuerecorded robust growth of 43% YoYin 2QFY25 (c.30% of total revenue),primarilyfuelled by the growth of both non-academic tutoring (studentenrolment+26% YoY) andintelligentlearning system businesses (activepaid users +44% YoY). Looking aheadin 3QFY25E, we estimateoverseas-related/domestic test prep/new educational initiatives/high-school tutoringrevenueto increase by 15%/20%/40%/20%YoY respectively,withoverseas-related businessdeceleratingdue to macrouncertainty. Joanna Ma(852) 3761 8838joannama@cmbi.com.hk Stock Data East Buy is set for new development stage.East Buyregistereda 9%YoY decline in revenue, and recorded a net loss of US$13.5mn in 1HFY25,primarily due to the disposal of Time with Yuhui. If excludingtheimpact ofthe disposal, East Buy recorded a net income of US$4.6mnin 1HFY25.Looking ahead, East Buy will continue to focus on improving product quality,growing its self-operated app, and enriching product varieties to better servehousehold needs.Tourism business continued to make progress, with itsrevenue up by 233%YoY in 2QFY25. Expect margin pressure in 2HFY25E.Excluding the impact from EastBuy, non-GAAP OPM was largely flat YoY at 3.2% in 2QFY25, as marginimprovement in coreeducationalbusinesswasoffset by investment in newbusinesses.For 2HFY25E,management expected the OPM to facepressuredue to the slower overseas-related business growth andinvestment in tourism business. Total number of schools and learningcentreswas upby5%QoQin 2QFY25, withaslowerpace ofexpansion asNew Oriental continues to balance profitability and revenue growth. Source:FactSet Business forecasts update and valuation Valuation 1) US$77.1for the educational and consulting business (96% of total valuation), based on28x FY25E PE, which ison par with the educationalsector average. 2) US$1.6for East Buy (2% of total valuation), based on8x FY25E PE, which ison parwiththee-commercesector average. 3) US$1.3for the Tourism and others business (2% of total valuation), based on10x FY25EPE. Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of this researchreport, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neither the analyst nor his/her associates (as defined in the code ofconduct issued by The Hong Kong Securities and Futures Commission) (1) have dealt in or traded in the stock(s) covered in this research report within 30 calendar days prior to thedate of issue of this report; (2) willdeal in or trade in the stock(s) covered in this research report 3 business days after the date of issue of this report; (3) serve as an officer of any of the HongKong listed companies covered in this report; and (4) have any financial interests in the Hong Kong listed companies coveredin this report. CMBIGM RatingsBUY : Stock with potential return of over 15% over next 12 months: Stock with potential return of +15% to-10% over next 12 months: Stock with potential loss of over 10% over next 12 months: Stock is not rated byCMBIGM HOLDSELLNOT RATED :Industry expected to outperform the relevant broad market benchmark over next 12 months:Industry expected to perform in-line with the relevant broad market benchmark over next 12 months: