New Oriental-S (09901) opened up more than 4%, as of press time, it rose 4.64%, to 57.5 Hong Kong dollars, with a turnover of 6.495 million Hong Kong dollars.
Zhongtong Finance App learned that New Oriental-S (09901) opened up more than 4%, as of press time, it rose 4.64%, to 57.5 Hong Kong dollars, with a turnover of 6.495 million Hong Kong dollars.
On the news front, East Buy announced that it will sell its subsidiary to Deng Yuhui, priced at 76.585 million yuan. The statement stated that with Mr. Deng's departure from the group, the group will no longer be able to continue operating the target company. After completion, the group will continue to operate and expand its self-operated products and live broadcast e-commerce business under the "East Buy" brand.
Haitong International issued a research report stating that the decline in New Oriental's stock price was an overreaction of the market to Dong Yuhui's departure. The bank said that New Oriental has a stable regulatory environment, strong demand, moderate competition, a leading position in the industry, and most of its businesses maintain good growth. Excluding the Eastbuy business, the estimated value of its core education business is $78 per ADR share; if including $4.55 billion in net cash and a 30% enterprise discount, the valuation is $97 per share.
Swhy pointed out that Dong Yuhui, the head anchor of its subsidiary, East Buy, has resigned. As New Oriental holds 57.04% of East Buy, East Buy's contribution to New Oriental's revenue in the 25th and 26th fiscal years will decrease by USD 250 million and USD 320 million, respectively, with limited impact from its e-commerce business. The bank believes that with the sustained high growth in the education business, and the acceleration of production capacity expansion, the market will focus on the company's growth potential. Therefore, the pressure on profit margin caused by the pre-placement of cost and expenses under production capacity expansion will no longer restrict the improvement of company valuation.