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小摩:予新东方-S(09901)“增持”评级 目标价降至71港元

Komo: Target price for New Oriental-S (09901) “Plus” rating reduced to HK$71

Zhitong Finance ·  May 20 03:01

The Zhitong Finance App learned that Xiaomo released a research report stating that it gave New Oriental-S (09901) an “additional share” rating and adjusted the valuation model to reflect New Oriental's results for the third fiscal quarter ending the end of February last month. The forecast for future earnings was raised by 5%, but the average earnings per share was reduced by 10% to reflect the reset of profit margin forecasts for the current fiscal quarter. The target price was lowered from HK$75 to HK$71.

The bank said that New Oriental traded short-term pain for long-term benefits. Also, it is expected that its revenue for the final fiscal quarter to the end of May rose 31% year on year. The current company's upper limit is also slower than the 60% increase in the third fiscal quarter, which far exceeded normal levels. However, the bank cut operating profit margin forecast relatively drastically by 400 points to 6.3%, reflecting the company's planned investment, education business employee dividends, and drag from Oriental Selection (01797). As a result, the report predicts that New Oriental's operating profit for the last fiscal quarter has declined moderately year over year. Looking ahead to the next fiscal season, the report believes this is not the beginning of a downward profit cycle. It is disappointing to think that investment in future growth will dampen results in the fourth fiscal quarter, but it is not a structural issue.

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