New Oriental Education tumbled over 19% to hit three-month low after reporting lower-than-expected earnings for Feb quarter

 

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New Oriental Education’s shares tumbled more than 19% to hit HK$57.25 at one point, marking the lowest level in three months.

The company’s net profit attributable to shareholders reached $87.17 million, rising by 6.8% from a year ago. Adjusted net profit attributable reached $$195 million, lower than expected $120 million. Net profit margin was 8.7%, lower than 13% a year earlier.

New Oriental earnings for the quarter came weaker than the market consensus, mainly due to the weaker-than-expected gross profit of its live e-commerce platform East Buy, Jefferies said.  

Jefferies noted that investors are concerned about the rapid expansion of its learning centers and the increasingly intensified debate on East Buy’s synergies. It lowered the forecast of New Oriental’s earnings per share in fiscal year 2024 – 2026 by 11%, 4% and 2%, respectively. Jefferies kept the rating at Buy, with a target price of HK$73.