The pains of "double reduction" transformation are being digested by New Oriental.
According to the latest financial report data by the end of February this year, the net revenue announced by New Oriental in the first nine months of fiscal year 2022 (i.e. from June 2021 to the end of February 2022) was US $2581.2 million, about RMB 16.9 billion, a year-on-year decrease of 15.8%. In the first nine months of fiscal year 2022, the net loss attributable to New Oriental shareholders was US $998.4 million, with a loss of about RMB 6.5 billion, while the revenue in the same period of the previous fiscal year was US $379.9 million, with a profit of about RMB 2.5 billion.
After the release of the "double reduction" policy, the discipline education of K9 (kindergarten to junior middle school) has been strictly supervised, and New Oriental has officially ended the discipline training business of K9 since this year. In February this year, high school teaching and training was also stopped by the regulatory authorities. At present, New Oriental online has completely not involved the subjects of K12, involving the subject education of CET-4 and CET-6 at the university stage and the related contents of postgraduate entrance examination.
At the end of an era, half of the stores of New Oriental were closed and a large number of teaching and training personnel changed careers. According to the financial report data, as of the end of February this year, there were 847 New Oriental schools and learning centers, 822 fewer than 1669 at the end of May 2021. New Oriental executives pointed out at a conference call that by the end of this year, this number will drop to about 600.
Business contraction and profit decline are accompanied by the decline of share price and market value. At present, New Oriental has three listed companies in Hong Kong and the United States. The market value of Hong Kong stock New Oriental and New Oriental online is HK $13.3 billion and HK $3.2 billion respectively; The market value of zhonggai New Oriental is US $1.8 billion, or 11.7 billion yuan.
The company's share price has shrunk significantly compared with a year ago: Taking New Oriental as an example, the current price of $10.40 has shrunk by 95% compared with the high point a year ago.
New Oriental's stock price has been falling all the way. Whether it can continue to stay in the US stock market according to the requirements of the exchange has become a recent stress test of New Oriental.
In April this year, New Oriental's share price fell below US $1. In order to avoid receiving a delisting warning, 10 shares of New Oriental's US shares were combined into one share, and the share price per share also changed to 10 times that before. YuMinHong, chairman of New Oriental Education Technology Group, wrote in his personal wechat official account "Lao Yu Xianhua" that "10 shares have been merged into one share, so that the stock price of New Oriental will look better on the surface, but the actual value has not changed."
On April 26, YuMinHong said in an article titled "let's look forward to a better tomorrow" on the wechat official account, "My daily work is still to go to New Oriental every day. Because of some uncertain factors, I have to communicate closely with you for some time in the future and constantly adjust the work direction and business policy dynamically. Fortunately, you are still motivated to do things and have optimistic expectations for the future. At this moment, the confidence of the team is the most important. What I can do is to give you confidence. Even blind confidence is better than no confidence Be strong. "
business actively adjusted and transformed
education and training center to hotel
It's no surprise that the transformation of this tutor is painful. It's very important to find the direction of growth. In the latest fiscal quarter, New Oriental continued to lose $141 million, or about 900 million yuan. New Oriental pointed out that the one-time impairment such as closing stores and layoffs mainly occurred in the first half of the fiscal year (before November 2022). The loss in the latest fiscal quarter was mainly caused by the development of new business and investment. New Oriental executives were also confident that they would turn losses into profits in fiscal year 2023.
The income from adult education business and quality business is still expected to be the main driving force for the company's future revenue growth. In the first nine months of fiscal year 2022, the income of New Oriental's remaining main businesses - overseas examination preparation and overseas consulting business increased by 15% year-on-year, while the Chinese examination preparation business for adults and college students increased by about 59% year-on-year.
Recently, New Oriental is still actively laying out its main business: on April 22, New Oriental announced the launch of a new business English product. Chairman Yu Minhong explained in his speech that for the relevant segments of adult English training, It will still be valued in the future: "New Oriental started by training college students to go abroad and study English. Now it has returned to the main line of business. In a sense, the release of business English products is a return. I hope this business can be revitalized in the future." On the same day, New Oriental also announced a new cooperation with ETS in the field of business English and jointly released TOEIC test products.
On April 25, New Oriental International Education released the hybrid learning platform "Ronghui classroom" online. The platform thoroughly integrates online and offline learning, through concise learning content, vivid presentation form and interesting interactive experience, as well as big data-driven learning feedback, customized exercise push and teachers' 1-to-1 diagnostic teaching.
In addition to studying abroad, university education and other main businesses, New Oriental also launched Shenzhen Agricultural Products Group Co.Ltd(000061) live delivery platform Oriental selection. The newly established company quietly arranged around the chip, and the hotel business has also become the business scope of New Oriental.
Yu Minhong revealed today that New Oriental bought a hotel called "New Oriental Shangdu Capital Hotel" three years ago, which was originally used to train internal teachers and managers. He said: "This place was originally closed to the outside world. Later, New Oriental's business was compressed and began to receive individual tourists. Because the environment was ok, it was favored by relevant departments before the Winter Olympics. It became a special hotel for the Winter Olympics and received service personnel for the Winter Olympics. Last week, we commended the internal employees and thanked them for staying in the hotel for more than 60 days and providing perfect services for the Winter Olympics. Now the hotel has been unsealed and continues to be open to the outside world do business. If you are interested, you can go and have a look. "
