Magill: Rates New Oriental-S (09901) target price to 25.7 Hong Kong dollars, expecting its operating profit margin to come under pressure.

, Macquarie released a research report stating that due to the profit decline of NEW ORIENTAL-S(09901), impacted by slowing revenue momentum, as well as unfavorable factors such as overseas business, tourism industry, and the drag on profit margin by its subsidiary EAST BUY(01797), the target price has been lowered by 19.4% from 31.9 Hong Kong dollars to 25.7 Hong Kong dollars, maintaining an "underperform" rating. The report indicates that the management of New Oriental has lowered the revenue growth guidance for the fourth quarter of fiscal year 2025 from 16% to 10-13%, and expects weakness in the overseas business for fiscal year 2026. At the same time, Macquarie predicts that the group's operating profit margin will be under pressure in fiscal year 2026, as the unfavorable combination offsets the contribution of cost control measures.