New Oriental S (09901. HK) released an announcement after hours yesterday, which triggered a nearly 14% surge in its stock price, which gradually narrowed thereafter. As of press time, it rose 3.24% to HKD 54.2.
In terms of news, New Oriental announced yesterday that its board of directors has approved the expansion of its share repurchase plan, under which the total value of shares authorized for repurchase will increase from $400 million to $700 million. The expanded share repurchase plan is valid until May 31, 2025. In addition, the board meeting of the company will be held on the 19th of this month to review and recommend the declaration of a special dividend.
Note: Announcement from New Oriental
Boosted by this news, New Oriental (EDU), which is listed on the US stock market, closed up 13.38% at $74.
Note: New Oriental's performance in the US stock market
In addition to the benefits of repurchase, the State Council recently issued the "Opinions on Promoting the High Quality Development of Service Consumption", which proposes to promote the opening of high-quality educational resources by universities, research institutions, and social organizations to meet the diverse and personalized learning needs of the general public. Promote the improvement and efficiency of vocational education, and build high-level vocational schools and majors.
New Oriental recently announced its latest quarterly performance
New Oriental announced its fourth quarter financial results as of May 31, 2024 at the end of July, with revenue of $1.1367 billion, a year-on-year increase of 32.1%; Net profit was 27 million US dollars, a year-on-year decrease of 6.9%.
Haitong International released a research report stating that New Oriental's total revenue in the fourth quarter of this year met market expectations, but its adjusted operating profit margin was 3 percentage points lower than market expectations. The bank expects that New Oriental's core revenue for the first quarter and full year of fiscal year 2025 will increase by 34% and 32% year-on-year, respectively.
They also pointed out that as the profit margin of New Oriental's newly opened learning center increases, the operating profit margin of its core education business may expand in the fiscal year 2025, and it is expected that the core operating profit in the fiscal year 2025 will be $561 million, with a profit margin of 13%, an annual growth of 1.5 percentage points.
Tianfeng Securities also recently stated that it continues to be optimistic about the growth prospects of New Oriental as a leading education and training enterprise. The short-term investment in opening schools and the one-time impact of Oriental Selection will not hinder the company's long-term growth logic. The guidance for revenue and branch expansion still sends positive signals, and in the future, with the increase in utilization rate, profits may be quickly released.