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【券商聚焦】交银国际削新东方(09901)目标价至89港元 料4季度收入增38% 运营利润率或至6%

[Broker Focus] BOC International cuts new Oriental (09901) target price to HK$89 and is expected to increase revenue by 38% in the fourth quarter or operating profit margin to 6%

金吾財訊 ·  Apr 24 21:40

Jinwu Financial News | According to the BOC International Development Research Report, New Oriental (09901)'s revenue for the 3rd quarter of fiscal year 2024 was 1.2 billion US dollars, an increase of 60% year-on-year. Compared with the bank/Bloomberg's agreed growth rate of 44%/47%, it was mainly driven by the growth of the new education business and Oriental Selection's own operation. The adjusted operating profit was US$140 million, and the operating profit margin was 12%, the same as the previous year; the adjusted net profit was US$105 million, lower than the bank's agreed expectations of US$120 million. The net interest rate was 8.7%, compared with 13% in the same period last year, mainly hampered by Oriental Selection Expansion, supply chain construction, and discounts on proprietary products.

The bank expects revenue to increase 38% to US$1.18 billion in the fourth quarter (management guidance 28%-31%), and operating profit margin may drop 3 percentage points to 6% year over year, mainly affected by increased investment in Oriental selection, low season education business, and cultural tourism investment. Driven by Oriental Selection and the volume of cultural tourism revenue, revenue for the 2024/25 fiscal year increased by 4%/24%. The stock price closed down 14% after the results were announced, mainly affected by short-term pressure on profit margins. The current price corresponds to 20 times the price-earnings ratio of the education business. The bank believes that education and training demand and the company's business performance are still steady. It is expected that education revenue will increase by 30% in fiscal year 2025, and profit margins will continue to be optimized. Due to increased investment in Oriental Selection, the Group's operating profit margin was lowered to 12.8% (previously estimated 14%). Corresponding to the price-earnings ratio of the education business of 25 times, the target price for the next 12 months will be lowered to HK$89/ US$116 (EDU US) for the next 12 months, corresponding to the price-earnings ratio of 33/27 times for the 2024/25 fiscal year and 48% profit growth rate for fiscal year 2025, maintaining purchases.

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