Yamato: Reiterates "buy" rating for NEW ORIENTAL-S (09901) with target price lowered to 67 Hong Kong dollars.

The Yamato Research released a research report stating that due to the slowing expansion of the profit margin of the education business, the earnings per share forecast for NEW ORIENTAL-S (09901) for the fiscal year 2026 to 2027 has been lowered by 6% to 7%. The firm maintains its long-term growth outlook unchanged, reiterating a "buy" rating, with the H-share target price lowered from 70 Hong Kong dollars to 67 Hong Kong dollars. The report states that the management indicated during an investor conference that they are maintaining the guidance target of 30% year-on-year revenue growth for the education business throughout the year. Management stated that seasonal factors were the key factors causing fluctuations in revenue from the first quarter to the second quarter of the fiscal year 2025. Excluding cultural tourism activities, the firm estimates that the year-on-year growth of its education revenue will remain stable.