New Oriental Shares Eyes a Bright Future Despite Rough Quarter

Guotai Haitong keeps its positive stance on New Oriental Education & Technology Group, setting a target price of HK$52.26 even as the stock slipped to HK$41.96 last week.

Market Consensus

• Strong Buy consensus across analysts
• Average target price: €6.23 per share

Recent Financial Highlights (Q1 FY24)

Comparison to previous year (same period):

• Revenue: HK$1.14 billion
• Net Profit: HK$26.97 million

The sharp drop in earnings despite higher sales raises concerns about cost control and market saturation, though rising revenue indicates steady demand for education services.

Investor Takeaway

• Potential Recovery: Watch how quickly increased revenue converts to sustainable earnings.
• Risk of Profit Erosion: Competitive industry could continue eroding margins.

Outlook

Overall, the outlook remains cautiously optimistic. Analysts expect New Oriental to regain profitability while maintaining growth momentum.