**"New Oriental's Financial Report: Navigating Growth Amidst Cost Challenges and Competitive Pressures

Financial Performance

As of February 28, 2025, New Oriental Education's operating revenue totaled $1.183 billion, demonstrating the company's competitiveness in the education industry. The composition of operating revenue shows a high gross margin and net margin, but cost control needs attention, especially with a high proportion of marketing and management expenses.

Key Financial Data

1. Operating revenue was $1.183 billion, gross profit was $651 million, and the gross margin was approximately 55%.

2. Net profit was $89.66 million, and the net margin was approximately 7.58%.

3. Marketing, sales, and general management expenses were $527 million, accounting for 44.6% of operating revenue.

4. Income from affiliates was -$11.15 million, affecting overall profitability.

Peer Comparison

1. Industry-wide analysis: The education industry faces transformational pressure, with an average annual growth rate of 5%-10%, and the competition intensified after the pandemic, leading to a decline in the revenue of some companies, and the overall industry's operating revenue may fluctuate.

2. Peer evaluation analysis: New Oriental Education's operating revenue is high in the education industry, but the relatively low net profit due to high expenses, and the competition pressure is increasing. It is necessary to pay attention to the financial data of competitors such as Good Future and VIPKid to assess New Oriental Education's market competitiveness.

Summary

New Oriental Education's operating revenue grew 15.1% year-on-year as of February 28, 2025, with a 29.0% and 28.5% increase in net profit and operating profit, showing a significant performance in the growth trend. However, despite the high operating revenue, cost control is still a field that needs to be focused on, and a high proportion of marketing and management expenses may affect future profitability.

Opportunities

1. The continuous growth of the online education market provides New Oriental Education with opportunities to expand its business, especially the online learning habits formed after the pandemic.

2. The rapid growth of the vocational education market will provide new sources of income for New Oriental Education's new businesses.

3. Through optimizing cost control and expense structure, New Oriental Education can enhance its net profit level and strengthen its market competitiveness.

Risks

1. The overall education industry faces transformational and competitive pressure, which may affect New Oriental Education's market share and operating revenue.

2. The high proportion of marketing and management expenses may continue to put pressure on net profit in the future.

3. The negative value of affiliate income may continue to affect overall profitability, and the improvement of related businesses needs to be paid attention to.