Yamato: New Oriental's profit growth visibility is clearer, target price raised to HK$57.

Daiwa published a research report stating that New Oriental's performance in the second quarter of the 2026 fiscal year exceeded market expectations, mainly benefiting from the improvement in the profitability of its education business and the contribution of Dongfang Zhenxuan. Due to the stronger than expected growth in K12 and overseas study business revenue, the company raised its 2026 fiscal year revenue growth guidance from 5% to 10% to 8% to 12%. The bank believes that with the improvement in efficiency and the contribution of Dongfang Zhenxuan revenue, the visibility of the company's profit growth is clearer. Based on the upward revision of Dongfang Zhenxuan's profit forecast, the bank raised New Oriental's earnings per share forecast for the 2027 to 2028 fiscal years by 0.4% to 1.4% and reiterated a "buy" rating with a target price raised from HK$53 to HK$57.