Haitong International assigned an Outperform rating to NEW ORIENTAL-S (09901.HK) due to several key factors:
1. Leadership in Segments: The company is recognized for its strong position in K12 education and overseas business.
2. Generative AI Applications: NEW ORIENTAL-S is leveraging generative AI for automated courseware creation, digital twins of star teachers, and AI-powered homework grading, which are expected to enhance conversion efficiency and content quality.
3. Shareholder Return Plan: The company has announced a three-year shareholder return plan with a commitment to a dividend payout ratio of at least 50%, reflecting management's confidence in profitability.
4. Financial Projections: Based on a projected net profit of USD372 million for FY2025, the anticipated shareholder return is approximately 2.7%, which supports the positive outlook.
5. Valuation: Haitong International applied an 18x PE to the FY2026 non-GAAP net profit, resulting in a target price of HKD49.
These factors collectively contribute to the positive analyst rating.
