freespinscrazyfox| BOCOM International: Maintain New Oriental-S's "Buy" rating and lower target price to HK$89

Bank of Communications International released a research report stating that it would ignore the Eastern Selection (01797) and lower the target price of New Oriental-S (09901) to HK$89, corresponding to a P/E ratio of 33 and 27 times in the 2024/25 fiscal year and a profit growth rate of 48% in the 2025 fiscal year., maintaining the "Buy" rating. Due to increased investment in Orient selection, the Group's operating profit margin forecast was lowered from 14% to 12freespinscrazyfox.8%。

The bank pointed out that driven by Oriental selection and increased cultural and tourism revenue, revenue for the 2024/25 fiscal year will be increased by 4% and 24%. After the quarterly results were released, the stock price closed down 14%, mainly due to short-term pressure on profit margins. The current price corresponds to a price-to-earnings ratio of 20 times for the education business. The bank believes that education and training demand and the company's business performance are still stable. It is expected that education revenue will increase by 30% in fiscal year 2025, and profit margins will continue to be optimized. In addition, New Oriental's revenue for the third quarter of fiscal year 2024 was US$1.2 billion, a year-on-year increase of 60%, which was 44% higher than the bank's expected growth. It was mainly driven by the growth of new education business and Oriental's selection and self-employment. Adjusted net profit attributable to the parent company was US$105 million, lower than the bank's expectationsfreespinscrazyfoxof US$120 million.