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    D. S. Kim • JPMorgan Chase & Co.

    D. S. Kim's questions to New Oriental Education & Technology Group Inc (EDU) leadership

    D. S. Kim's questions to New Oriental Education & Technology Group Inc (EDU) leadership • Q2 2025

    Question

    D. S. Kim of JPMorgan followed up on the full-year outlook, asking if the moderated revenue growth expectation would impact the target for operating margin expansion. He also requested more detail on the segment growth assumptions within the new guidance.

    Answer

    Zhihui Yang, Executive President and CFO, acknowledged margin pressure in the second half of the year from the slowing overseas business and new tourism ventures. However, he stated that for the full fiscal year, the company still expects margin expansion, driven by K-12 business strength, cost controls in the overseas segment, and an improving margin profile for the tourism business next year.

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    D. S. Kim's questions to New Oriental Education & Technology Group Inc (EDU) leadership • Q1 2025

    Question

    D.S. Kim from JPMorgan Chase & Co. sought clarification on the new business initiatives' growth figures and composition. In a follow-up, he asked for a more precise comparison of growth rates for the new businesses and high school segment between Q1 actuals and Q2 guidance to better understand the growth trajectory.

    Answer

    Executive Sisi Zhao clarified that while the two key new initiatives (non-academic tutoring and intelligent learning devices) grew over 55% in Q1, the overall segment growth was lower due to smaller categories. For Q2 guidance, she specified the overall new initiatives are expected to grow 45-46%, while the two key components will grow over 50%. She also confirmed that the high school business grew 20-21% in Q1, providing a direct comparison to its ~20% Q2 growth guidance.

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    D. S. Kim's questions to TAL Education Group (TAL) leadership

    D. S. Kim's questions to TAL Education Group (TAL) leadership • Q2 2025

    Question

    D. S. Kim inquired about the learning devices segment, asking if it is profitable on a cash or accounting basis and what the strategy is to enhance profitability, such as monetizing value-added services on the growing user base.

    Answer

    Executive Zhuangzhuang Peng stated that the learning device business is currently loss-making, with major costs in R&D, selling expenses, and bill of materials. He emphasized the strategic importance of the business for reaching new customers and the company's focus on investing in product and content quality, such as the new lower-priced XBook. While the user base is highly engaged (80% weekly active rate), Peng noted there are no tangible plans for value-added services yet, as the priority remains on user experience.

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