<Research>CMSI Optimistic About AI Innovations and Resilient Growth Among Chinese Educators; Favorites Include Duolingo and New Oriental
CMSI's 1Q26 Education Sector Outlook: CMSI is optimistic about the education sector, highlighting AI technology innovation and defensive growth as key drivers, with Duolingo and New Oriental as top picks and target prices set at US$347 and US$70, respectively.
Competitive Landscape in Education: The integration of AI and education is creating a differentiated competitive environment, with a focus on model capabilities, systematic content, emotional support, and generalized learning scenarios as future trends.
Market Share Expansion: Leading Chinese education companies are increasing their market share by leveraging superior content and services, resulting in improved growth and profitability, with attractive shareholder returns between 6% to 9%.
Target Price Adjustments: CMSI raised target prices for CHINA EAST EDU from HK$7.5 to HK$8.7 and for EAST BUY from HK$12.8 to HK$18, maintaining an Overweight rating for the former and a Neutral rating for the latter.
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China East Edu Anticipates 46-51% Year-over-Year Increase in 2025 Net Profit/Adjusted Net Profit
Stock Performance: China East Edu (00667.HK) saw a significant increase in its stock price, rising by 13.32% to +0.730.
Short Selling Activity: The company experienced short selling amounting to $13.83 million, with a short selling ratio of 8.716%.
Profit Forecast: The company issued a positive profit alert, projecting a year-on-year increase of 46% to 51% in both net profit and adjusted net profit for the year ending December 2025.
Previous Financial Figures: The expected profits for 2025 are compared to approximately RMB 513 million and RMB 525 million for net profit and adjusted net profit, respectively, for 2024.
<Full-day Summary> HSI Gains 467 Points; HSTI Rises 71 Points; PING AN Surges Over 4%; SHK PPT, HSBC HOLDINGS, YUM CHINA, GALAXY ENT, HENDERSON LAND Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) rose by 467 points (1.8%) to close at 27,027, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw gains, closing at 5,417 and 9,168 respectively, with a total market turnover of $255.14 billion.
Active Heavyweights: Notable stocks included PING AN, which increased by 4.9% to $73, and HKEX, which rose by 2.7% to $418.6. Other significant movers were TENCENT (+2.3%) and BABA (+1.9%), while MEITUAN experienced a slight decline of 0.4%.
Top Gainers: Among HSI and HSCEI constituents, INNOVENT BIO surged by 7.4%, POP MART by 5.8%, and ZIJIN MINING by 5.6%. Other notable gainers included SMIC and CHINA LIFE, both showing significant increases.
Decliners and High Performers: REALORD GROUP saw a sharp decline of 15.5%, while FIT HON TENG and CHINA EAST EDU experienced substantial gains of 14.1% and 13.3%, respectively, indicating a mixed performance across different sectors.
<Midday Update> HSI Rises by 385 Points; HSTI Gains 55 Points; PING AN Surges Over 4%; YUM CHINA, LI NING, SHK PPT, BOC HONG KONG, and ZTO EXPRESS-W Reach New Peaks
Market Performance: The HSI rose by 385 points (1.5%) to 26,945, while the HSTI and HSCEI also saw gains of 55 points (1.0%) and 111 points (1.2%) respectively.
Active Heavyweights: Notable stocks included PING AN (+4.1%), HKEX (+2.8%), and BABA (+1.9%), with significant short selling activity reported for each.
Top Gainers: INNOVENT BIO and POP MART led the gains among HSI & HSCEI constituents, rising by 5.9% and 5.8% respectively, while KUAISHOU-W experienced a notable decline of 4.3%.
Significant Movements: CHINA EAST EDU and CHINA LIT saw substantial increases of 11.9% and 10.1%, while REALORD GROUP faced a significant drop of 10%.
<Study>CMSI Ratings and Target Prices for Educators (Table)
Investment Ratings: New Oriental Education, Duolingo, TAL Education Group, and Youdao, Inc. are rated as "Overweight" with target prices set at US$70, US$347, US$16.7, and US$12.2 respectively.
Stock Performance: CHINA EAST EDU and EAST BUY saw increases of 6.19% and 3.678%, with short selling ratios of 13.65% and 24.141% respectively.
Target Price Adjustments: Gaotu Techedu Inc. has a revised target price from US$4.7 to US$3.8, while EAST BUY's target price is adjusted from HK$12.8 to HK$18.
Market Data: The stock quotes for HK stocks are delayed by at least 15 minutes, and short selling data is current as of January 8, 2026.
<Research>CMSI Optimistic About AI Innovations and Resilient Growth Among Chinese Educators; Favorites Include Duolingo and New Oriental
CMSI's 1Q26 Education Sector Outlook: CMSI is optimistic about the education sector, highlighting AI technology innovation and defensive growth as key drivers, with Duolingo and New Oriental as top picks and target prices set at US$347 and US$70, respectively.
Competitive Landscape in Education: The integration of AI and education is creating a differentiated competitive environment, with a focus on model capabilities, systematic content, emotional support, and generalized learning scenarios as future trends.
Market Share Expansion: Leading Chinese education companies are increasing their market share by leveraging superior content and services, resulting in improved growth and profitability, with attractive shareholder returns between 6% to 9%.
Target Price Adjustments: CMSI raised target prices for CHINA EAST EDU from HK$7.5 to HK$8.7 and for EAST BUY from HK$12.8 to HK$18, maintaining an Overweight rating for the former and a Neutral rating for the latter.
Citi Increases Earnings Projections for China East Education; Maintains Target Price at HKD 7.8 with Buy Rating
Citi's Financial Model Revision: Citi has revised its financial model for CHINA EAST EDU (00667.HK) for 2025-27, citing accelerated operational momentum and improved earnings prospects.
Forecast Adjustments: The broker increased its revenue and net profit forecasts for CHINA EAST EDU by up to 10.6% for the specified years, while maintaining a target price of HKD7.8 and a Buy rating, reflecting anticipated strong execution capabilities.
China East Edu Anticipates 46-51% Year-over-Year Increase in 2025 Net Profit/Adjusted Net Profit
Stock Performance: China East Edu (00667.HK) saw a significant increase in its stock price, rising by 13.32% to +0.730.
Short Selling Activity: The company experienced short selling amounting to $13.83 million, with a short selling ratio of 8.716%.
Profit Forecast: The company issued a positive profit alert, projecting a year-on-year increase of 46% to 51% in both net profit and adjusted net profit for the year ending December 2025.
Previous Financial Figures: The expected profits for 2025 are compared to approximately RMB 513 million and RMB 525 million for net profit and adjusted net profit, respectively, for 2024.
<Full-day Summary> HSI Gains 467 Points; HSTI Rises 71 Points; PING AN Surges Over 4%; SHK PPT, HSBC HOLDINGS, YUM CHINA, GALAXY ENT, HENDERSON LAND Reach New Peaks; Market Turnover Increases
Market Performance: The Hang Seng Index (HSI) rose by 467 points (1.8%) to close at 27,027, while the Hang Seng Tech Index (HSTI) and the Hang Seng China Enterprises Index (HSCEI) also saw gains, closing at 5,417 and 9,168 respectively, with a total market turnover of $255.14 billion.
Active Heavyweights: Notable stocks included PING AN, which increased by 4.9% to $73, and HKEX, which rose by 2.7% to $418.6. Other significant movers were TENCENT (+2.3%) and BABA (+1.9%), while MEITUAN experienced a slight decline of 0.4%.
Top Gainers: Among HSI and HSCEI constituents, INNOVENT BIO surged by 7.4%, POP MART by 5.8%, and ZIJIN MINING by 5.6%. Other notable gainers included SMIC and CHINA LIFE, both showing significant increases.
Decliners and High Performers: REALORD GROUP saw a sharp decline of 15.5%, while FIT HON TENG and CHINA EAST EDU experienced substantial gains of 14.1% and 13.3%, respectively, indicating a mixed performance across different sectors.
<Midday Update> HSI Rises by 385 Points; HSTI Gains 55 Points; PING AN Surges Over 4%; YUM CHINA, LI NING, SHK PPT, BOC HONG KONG, and ZTO EXPRESS-W Reach New Peaks
Market Performance: The HSI rose by 385 points (1.5%) to 26,945, while the HSTI and HSCEI also saw gains of 55 points (1.0%) and 111 points (1.2%) respectively.
Active Heavyweights: Notable stocks included PING AN (+4.1%), HKEX (+2.8%), and BABA (+1.9%), with significant short selling activity reported for each.
Top Gainers: INNOVENT BIO and POP MART led the gains among HSI & HSCEI constituents, rising by 5.9% and 5.8% respectively, while KUAISHOU-W experienced a notable decline of 4.3%.
Significant Movements: CHINA EAST EDU and CHINA LIT saw substantial increases of 11.9% and 10.1%, while REALORD GROUP faced a significant drop of 10%.
<Study>CMSI Ratings and Target Prices for Educators (Table)
Investment Ratings: New Oriental Education, Duolingo, TAL Education Group, and Youdao, Inc. are rated as "Overweight" with target prices set at US$70, US$347, US$16.7, and US$12.2 respectively.
Stock Performance: CHINA EAST EDU and EAST BUY saw increases of 6.19% and 3.678%, with short selling ratios of 13.65% and 24.141% respectively.
Target Price Adjustments: Gaotu Techedu Inc. has a revised target price from US$4.7 to US$3.8, while EAST BUY's target price is adjusted from HK$12.8 to HK$18.
Market Data: The stock quotes for HK stocks are delayed by at least 15 minutes, and short selling data is current as of January 8, 2026.
<Research>CMSI Optimistic About AI Innovations and Resilient Growth Among Chinese Educators; Favorites Include Duolingo and New Oriental
CMSI's 1Q26 Education Sector Outlook: CMSI is optimistic about the education sector, highlighting AI technology innovation and defensive growth as key drivers, with Duolingo and New Oriental as top picks and target prices set at US$347 and US$70, respectively.
Competitive Landscape in Education: The integration of AI and education is creating a differentiated competitive environment, with a focus on model capabilities, systematic content, emotional support, and generalized learning scenarios as future trends.
Market Share Expansion: Leading Chinese education companies are increasing their market share by leveraging superior content and services, resulting in improved growth and profitability, with attractive shareholder returns between 6% to 9%.
Target Price Adjustments: CMSI raised target prices for CHINA EAST EDU from HK$7.5 to HK$8.7 and for EAST BUY from HK$12.8 to HK$18, maintaining an Overweight rating for the former and a Neutral rating for the latter.
Citi Increases Earnings Projections for China East Education; Maintains Target Price at HKD 7.8 with Buy Rating
Citi's Financial Model Revision: Citi has revised its financial model for CHINA EAST EDU (00667.HK) for 2025-27, citing accelerated operational momentum and improved earnings prospects.
Forecast Adjustments: The broker increased its revenue and net profit forecasts for CHINA EAST EDU by up to 10.6% for the specified years, while maintaining a target price of HKD7.8 and a Buy rating, reflecting anticipated strong execution capabilities.
