New Oriental Education & Technology (EDU): First Take: 4QFY26 core largely in line, yet group OPM came in below GSe dragged by East Buy;

Research evidence excerpt

New Oriental Education & Technology (EDU): First Take: 4QFY26 core largely in line, yet group OPM came in below GSe dragged by East Buy;

Goldman Sachs New Oriental Education & Technology (EDU)

Exhibit 2: 4QFY26 financials summary

Source: Company data, Goldman Sachs Global Investment Research

Price Target Risks and Methodology - New Oriental Education & Technology

Our SOTP-based 12m target prices for EDU/9901.HK are US$65/HK$50, based on

FY27E i) 13x EV/NOPAT on high-school tutoring; ii) 12x EV/NOPAT on other traditional

business (including overseas test prep and consulting, college test prep, etc.) and new

initiatives (including non-academic tutoring, learning solutions, tourism); iii) our target

valuation of East Buy attributable to New Oriental; iv) US$3.0bn net cash balance after

excluding deferred revenue; and v) a 10% holdco discount. Key risks: 1) Industry TAM

pressure from shrinking K12 demographics; 2) Pricing pressure due to competition

and/or rising consumer discretionary attribute; 3) Further disruption to demand for

overseas study; 4) AI disruption to learning scenarios; 5) Below-expected operating

efficiency and margin improvement; 6) Regulatory changes in the education sector.

Investment Thesis - New Oriental Education & Technology

We view New Oriental, a 30-year-old educational brand, as a resilient growth story in

China’s education industry, with balanced revenue exposure thanks to its full spectrum

of educational services, and investments beyond education into the broader consumer

services and products. We are Buy rated as we believe the stock 1) provides compelling

valuation and a margin of safety relative to its historical valuation level, China

internet/consumer peers and its own EPS growth outlook, with enhanced shareholder