Business Strategy and Outlook| Cheng Wang, CFA, FRM, CAIA |
New Oriental Education, or EDU, is a large-scale leading provider of private tutoring in China. EDU offers a diversified portfolio of educational programs, services, and products to students in different areas. Not only does EDU offer K-12 after-school tutoring, but EDU also offers other test preparations for both overseas and domestic examinations. In nonacademic fields, EDU offers adult English and other languages, and it also provides services in vocational training, such as corporate training, marketing, accounting, human resources, IT and PRC Bar. EDU has been able to raise its fees via new students or new programs to cover rising costs, driving an improving margin as utilization and operational efficiency continues to improve. In the last fiscal quarter, EDU was able to raise prices of different courses. The hourly blended average selling price, or ASP, (cash revenue divided by total teaching hours) increased by approximately 3% to 7% year over year in yuan terms.