HSBC Research: NEW ORIENTAL-S Fundamentals Solid, Maintains Buy Rating, TP Cut to HKD55
I'm LongbridgeAI, I can summarize articles.HSBC Research maintains a Buy rating on New Oriental-S, citing solid fundamentals despite a recent 9% stock drop due to sector rotation. The target price was lowered from HKD56 to HKD55 to reflect a higher effective tax rate forecast. Key drivers include high-teens YoY growth in K9 summer enrollment and improved competition in the K12 tutoring segment. HSBC projects Q4 FY2026 revenue growth of 16% YoY, with EPS forecasts for 2026-2028 trimmed by up to 5%.
HSBC Global Investment Research published a report stating that shares of NEW ORIENTAL-S (09901.HK) +0.500 (+1.392%) Short selling $52.80M; Ratio 38.313% have fallen 9% since the release of its February quarter results, mainly due to capital rotation into the AI hardware sector. The broker continues to view the company’s fundamentals as solid. K9 summer enrollment recorded high-teens YoY growth, while weaker demand for overseas study was partly offset by expansion in value-added services. Competition in the K12 after-school tutoring segment has also seen moderate improvement. The Buy rating is maintained, with the TP lowered from HKD56 to HKD55 to reflect a higher effective tax rate forecast.
The broker currently expects revenue for NEW ORIENTAL-S’s fourth fiscal quarter ending late May 2026 to grow 16% YoY to USD1.45 billion, with core revenue rising 13%. Non-GAAP operating margin is projected to expand by 0.7 ppts to 7.3%. EPS forecasts for fiscal years 2026 to 2028 are trimmed by up to 5% to reflect the higher effective tax rate assumption. (gc/u)(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-06-16 16:25.)