Jinwu Financial News | According to the First Shanghai Development Research Report, as of February 29, '24, New Oriental (09901) FY24Q3 was +60.1% year-on-year to US$1.27 billion, higher than the previous company's performance guidelines (US$1,071-US$1,094 million). Net operating profit of USD 113 million, +70.6% year over year; non-GAAP operating profit of USD 141 million, +60.3% year over year; profit to mother of USD 87 million, +6.8% year over year. Non-GAAP net profit was $105 million, +9.8% YoY.
According to the bank, maintaining optimism about the long-term development prospects of the industry, after the “double reduction”, the supply of high-quality education services was drastically reduced, and the new business (non-subject training/intelligent learning machine business) quickly filled the market gap; in the study abroad business/university and adult business, leading companies will gradually increase their market share and achieve rapid growth after the industry is cleared; the high school business will maintain good operating margins and contribute cash flow to support the company's development; New Oriental is the fastest and most successful company “after double reduction”, and the bank is optimistic about the company's development for a long time. The company currently has a total cash/short-term investment/term deposit of US$4.76 billion, and its financial strength is strong. Using DCF estimates, WACC is 11%, a sustainable growth of 3%, and adjusted the company's target price to $111.2/HK$87.1, maintaining the purchase rating.