We Raise New Oriental's Fair Value Estimate to USD 47

After terminating its K-9 academic after-school tutoring in 2021, New Oriental identified five new business initiatives: 1) nonacademic tutoring; 2) intelligent learning systems and devices; 3) study tours and research camps; 4) educational materials and digitalized smart study solutions; and 5) exam preparation courses designed for students with junior college diplomas to obtain bachelor’s degrees. Among the five initiatives, we think the first two initiatives present decent opportunities, given New Oriental’s expertise in after-school tutoring and curriculum development. The new initiatives collectively accounted for only about 17% of revenue in fiscal 2023 but growth is robust. We expect these initiatives to contribute 32% of revenue by fiscal 2028.