Haitong International has commenced its coverage of New Oriental-S (09901), highlighting the company's dominant stance across diverse business segments. The firm also emphasizes the enhanced efficiency and sharpened business focus resulting from the deployment of generative AI across various scenarios. For New Oriental's H-shares in the fiscal year 2026, Haitong International has assigned an 18x price-to-earnings (P/E) ratio, along with a target price of HK$49 and an 'Outperform' rating.

In the first quarter of fiscal year 2026, New Oriental's adjusted operating profit margin witnessed a year-on-year increase of 1 percentage point, largely attributable to the contributions from Dongfang Zhenxuan. It is anticipated that the profit margin will further expand by an additional 2 percentage points in the second fiscal quarter. Moreover, improvements ranging from 0.3 to 0.5 percentage points on a year-on-year basis are expected in the second half of the fiscal year. The full-year adjusted operating profit is projected to reach US$650 million, equating to a profit margin of 12.1%.

Furthermore, New Oriental has unveiled a three-year shareholder return plan, featuring a dividend payout ratio of no less than 50%. Based on the net profit for fiscal year 2025 and the current market capitalization, the corresponding return rate stands at approximately 2.7%, underscoring management's confidence in the company's profitability.