Jiangyin International: Lowers New Oriental-S target price to HKD 46, study abroad business growth under pressure

Jiangyin International released a research report stating that it expects New Oriental EDU & Tech's non-selective business revenue in the third quarter to increase by 22% year-on-year, with adjusted operating profit down approximately 2.5 percentage points year-on-year, mainly due to lower-than-expected growth in study abroad-related businesses and investments in cultural tourism. The bank anticipates a 25% growth in non-selective business revenue for the full year, with an operating profit margin of 11.5%, while growth in study abroad business is expected to remain under pressure. The bank believes that the group's long-term profit margin still has room for improvement, and the target price has been lowered to HKD 46. Additionally, the company has sufficient cash flow; although business adjustments are needed, its brand and scale still lead the industry, making the valuation attractive, and it maintains a "buy" rating