Daiwa Reiterates Buy Rating on New Oriental, Raises Target Price to HK$49

Summary

Daiwa has reiterated its ‘buy’ rating for New Oriental and raised the target price from HKD 43 to HKD 49. The report highlights stable business development, improved K-9 student retention rates, and a positive outlook for overseas exam preparation. New Oriental’s commitment to allocate at least 50% of net profit for dividends or share buybacks from fiscal 2026 is seen as a key positive catalyst.

Impact Analysis

So basically, Daiwa’s move to up New Oriental’s target price to HKD 49 is a nod to the company’s stabilizing operations and strategic financial commitments. The interesting part isn’t just the improved student retention or the stabilization of the overseas exam prep business, but the commitment to return at least 50% of net profits to shareholders starting fiscal 2026. This is a clear signal of confidence from management and a strategic move to attract and retain investors. The market might be underestimating the impact of this shareholder-friendly policy, which could drive further interest in the stock. The risk here is execution—can New Oriental maintain this stability and deliver on its promises? If they can, the upside could be significant, especially if the market hasn’t fully priced in these developments yet.