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New Oriental Education & Technology Group Inc ADR EDU

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New Oriental Education: Uncertainty Ahead With Sensitivity Analysis on Different Scenarios

Jenny Tsai Senior Equity Analyst

Analyst Note

| Jenny Tsai |

We believe the measures announced by the Chinese government on July 24, 2021 to alleviate stress for students in mandatory education and after-school tutoring will impact the business model of some private sector education companies. The China Ministry of Education announced on Sept. 7, 2021 that all after-school tutoring companies are required to become non-profit organizations before year-end 2021 and implemented a price hike cap of 10%. Most of the after-school tutoring companies are still in discussions with their legal team and local government on the structure required by the central government, so investors lack visibility into the future cash flows of the business.

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Company Profile

Business Description

EDU, founded in 1993, is the largest well-established one-stop shopping private educational services provider in China. EDU has had over 52.8 million student enrollments, including about 8.4 million enrollments in fiscal 2019. As of third-quarter fiscal 2020, EDU had a network of 1,416 learning centers, including 99 schools, 12 bookstores and access to a national network of online and offline bookstores through 160 third-party distributors and over 38,400 highly qualified teachers in 86 cities. EDU offers a diversified portfolio of educational programs, services and products to students in different age groups, including K-12 after-school tutoring for major academic subjects, overseas and domestic test preparations, nonacademic languages and services in vocational training, and so on.

Contact
No. 6 Hai Dian Zhong Street, Haidian District
Beijing, 100080, China, People's Republic of
T +86 1060908000
Sector Consumer Defensive
Industry Education & Training Services
Most Recent Earnings Feb 28, 2021
Fiscal Year End May 31, 2021
Stock Type
Employees 81,127

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