New Oriental FY26Q4 Beat Review and Conference Call Key Points 260729

English summary

FY26Q4 revenue +23%, higher than the guidance given in Q3 (15-18%), mainly due to new education business +25% (enrollments +17%) and adult and college test prep +29% exceeding expectations, while overseas study business was stable under a high base. Non-GAAP net profit declined mainly due to a lower effective tax rate from the goodwill impairment provision in the same period last year. The board expects FY27 cash dividends of $300M and a new buyback plan of no more than $200M, corresponding to a total dividend yield of 6%. Looking ahead: 1) Q4 deferred revenue +15%, accelerating from Q3; 2) The company guides FY27 revenue +14-18%, with capacity +10-15%, high-margin K9 and high school expected to grow nearly 20%, and industry competition this summer is better than last year; 3) FY27 sales expense ratio is expected to decline, driving margin improvement. Raise FY27 net profit to $610M, currently corresponding to PE 13X, buyback + dividend yield 6%, overseas study business has shown signs of recovery, core high school and non-academic nearly 20% growth, East Buy revenue growth nearly 40%, maintain Buy.