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New Oriental Education & Technology Group Inc Ordinary Shares 09901

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Stock XHKG Rating as of
HKD 64.50 +0.20 (0.31%)
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As of Delayed Price Closed
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Company Report

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New Oriental's Capacity Expansion Accelerates

Cheng Wang

After terminating its K-9 academic tutoring in 2021, New Oriental identified a few new business initiatives, such as nonacademic tutoring and intelligent learning systems and devices. We are positive on these initiatives given New Oriental’s expertise in after-school tutoring and curriculum development. The new businesses accounted for only about 17% of revenue in fiscal 2023 but growth is robust. We project a 27% revenue contribution by fiscal 2028.

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Price vs Fair Value

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09901 is trading at a 736% premium.
Price
HKD 64.30
Fair Value
HKD 49.00
Uncertainty
Very High
1-Star Price
HKD 28.62
5-Star Price
HKD 45.50
Economic Moat
Qrqb
Capital Allocation
Qcvvtkvv

Bulls Say, Bears Say

Bulls

The margin trend of New Oriental's new businesses is better than expected.

Bears

High school academic after-school tutoring as a for-profit business carries very high policy risk.

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Trading Information

Previous Close Price
HKD 64.30
Day Range
HKD 62.60–64.85
52-Week Range
HKD 30.40–77.05
Bid/Ask
HKD 64.40 / HKD 64.50
Market Cap
HKD 106.76 Bil
Volume/Avg
2.1 Mil / 4.0 Mil

Key Statistics

Price/Earnings (Normalized)
34.88
Price/Sales
3.40
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

New Oriental is a leading private education provider in China. K-9 academic after-school tutoring used to account for 50%-60% of New Oriental’s revenue before the regulatory crackdown in 2021. After terminating its K-9 academic after-school tutoring business, New Oriental has identified a few new initiatives such as nonacademic tutoring and intelligent learning systems and devices. The remaining businesses include high school academic after-school tutoring and overseas-related test preparation and consulting business. The company also owns 55% of East Buy, a market leader in livestreaming e-commerce.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Large Growth
Total Number of Employees
50,438
Website
https://www.neworiental.org

Competitors

Valuation

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Metric
09901
TAL
00839
Price/Earnings (Normalized)
 34.8850.885.22
Price/Book Value
 3.511.770.67
Price/Sales
 3.404.401.65
Price/Cash Flow
 8.9853.193.72
Price/Earnings
09901
TAL
00839

Financial Strength

Metric
09901
TAL
00839
Quick Ratio
 1.753.130.76
Current Ratio
 1.953.420.85
Interest Coverage
 ——4.16
Quick Ratio
09901
TAL
00839

Profitability

Metric
09901
TAL
00839
Return on Assets (Normalized)
 5.09%0.41%5.49%
Return on Equity (Normalized)
 9.10%0.53%12.83%
Return on Invested Capital (Normalized)
 7.63%−1.70%8.69%
Return on Assets
09901
TAL
00839
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Education & Training Services Industry Comparables

Screen With Investor
1-Day Chart
Name
Price
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
New Oriental Education & Technology Group Inc ADR
EDU
ZyxrsnrGxvs$13.6 Bil
 TAL Education Group ADR
TAL
VrpnDbyp$6.5 Bil
 Grand Canyon Education Inc
LOPE
—Wvkyxl$4.3 Bil
 Graham Holdings Co
GHC
RnhpdmmhGrx$3.1 Bil
 Stride Inc
LRN
—Qklm$2.9 Bil
 Strategic Education Inc
STRA
HzngpmrdpkNtnps$2.7 Bil
 Adtalem Global Education Inc
ATGE
VqsbswnrKghsl$2.6 Bil
 Laureate Education Inc Shs
LAUR
—Nxbz$2.3 Bil
 Afya Ltd Class A
AFYA
—Gxykxq$1.5 Bil
 Perdoceo Education Corp
PRDO
—Lqmtb$1.4 Bil

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