Goldman Sachs released a research report stating that while maintaining the “buy” rating of New Oriental-S (09901), the target price was slightly reduced by 2% from HK$90 to HK$88; while maintaining a “neutral” rating for Oriental Selection (01797), the target price was lowered from HK$21.5 to HK$18.4. The company's stock price has been excessively adjusted.
The bank believes that the Group's core non-GAAP operating profit for fiscal year 2024 should be revised upward, driven by revenue and core operating margin. Furthermore, production capacity expansion guidelines are being accelerated, leaving room for short-term revenue and medium-term profit to rise. Furthermore, the bank believes that the time of Oriental Selection's worst profitability is over, and it is expected that the non-GAAP operating profit margin for the fourth quarter of fiscal year 2024 will improve to 7%.