Analyst, Schoolhouse Solutions

Daniel Su

Analyst

Schoolhouse Solutions

Schoolhouse is a strategy and research provider for the Education sector. We publish differentiated reports and bespoke research on the sector, focused on private and public companies in Asia-Pacific. Our team has decades of experience working with Education companies ranging from K-12 to Tertiary and Edtech.

Strategy and Research Provider

Thematic (Sector/Industry)

<ul>
<li>The education sector remains resilient despite headline privatisations, with market cap only slightly down to US$142bn after the removal of <a href="https://www.smartkarma.com/entities/powerschool-holdings-inc" target="_blank" data-smartkarma-citation="entities:36946:1" rel="noopener">PowerSchool Holdings (PWSC US)</a> and <a href="https://www.smartkarma.com/entities/instructure-holdings-inc" target="_blank" data-smartkarma-citation="entities:26502:1" rel="noopener">Instructure Holdings (INST US)</a>.</li>
<li>AI disruption is reshaping the landscape, with key players like <a href="https://www.smartkarma.com/entities/chegg-inc" target="_blank" data-smartkarma-citation="entities:10114:1" rel="noopener">Chegg Inc (CHGG US)</a> collapsing while innovators like <a href="https://www.smartkarma.com/entities/duolingo-inc" target="_blank" data-smartkarma-citation="entities:33531:1" rel="noopener">Duolingo (DUOL US)</a> surge, highlighting a potential shift in investor focus.</li>
<li>M&amp;A and IPO activity is reawakening, with <a href="https://www.smartkarma.com/entities/kindercare-learning-cos-inc" target="_blank" data-smartkarma-citation="entities:35721:1" rel="noopener">KinderCare Learning (KLC US)</a> 's IPO, India's robust upcoming pipeline, and renewed private equity interest pointing to a cyclical upturn.</li>
</ul>


The education sector remains resilient despite headline privatisations, with market cap only slightly down to US$142bn after the removal of PowerSchool Holdings (PWSC US) and Instructure Holdings (INST US).
AI disruption is reshaping the landscape, with key players like Chegg Inc (CHGG US) collapsing while innovators like Duolingo (DUOL US) surge, highlighting a potential shift in investor focus.
M&amp;A and IPO activity is reawakening, with KinderCare Learning (KLC US) 's IPO, India's robust upcoming pipeline, and renewed private equity interest pointing to a cyclical upturn.


Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Bottom-Up

<ul>
<li>Kweichow Moutai’s revenue rose by 17% YoY and net profit increased by 15% YoY in the first three quarters of 2024.</li>
<li>JD gives cents to prevent users from closing accounts after the public relation crisis.</li>
<li>Two tutoring schools, New Oriental and TAL, grew strongly in the most recent quarters.</li>
</ul>


Kweichow Moutai’s revenue rose by 17% YoY and net profit increased by 15% YoY in the first three quarters of 2024.
JD gives cents to prevent users from closing accounts after the public relation crisis.
Two tutoring schools, New Oriental and TAL, grew strongly in the most recent quarters.


China Consumption Weekly (28 Oct 2024): Kweichow Moutai, JD, New Oriental, TAL, Meituan

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

New Oriental Education & Techn / Equity Bottom-Up

<ul><li>New Oriental announced 1QFY25 results on 23 Oct: net revenue grew by 30.5% YoY to US$1,435mn (or +33.5% YoY if excluding East Buy revenue), in line with our/consensus estimate of US$1,396mn/1,442mn; non-GAAP net income grew by 39.8% YoY to US$265mn, largely in line with our/consensus estimate of US$256/258mn, driven by enhanced operating margin of core educational business. Looking into 2QFY25E, management expects total net revenue (excluding revenue from East Buy) to grow by 25-28% YoY to US$851-872mn, decelerating due to the seasonality effect and macro impact on certain highASP businesses.</li><li>Nonetheless, management expects revenue growth to reaccelerate in 3Q/4Q and full-year revenue growth to remain at c.+30% YoY in FY25E (excl. East Buy).</li><li>We lower FY25 total revenue/non-GAAP earnings forecasts by 1.0/9.6% respectively, as the soft consumption sentiment affects overseas-related and high-end 1v1 tutoring businesses. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

New Oriental announced 1QFY25 results on 23 Oct: net revenue grew by 30.5% YoY to US$1,435mn (or +33.5% YoY if excluding East Buy revenue), in line with our/consensus estimate of US$1,396mn/1,442mn; non-GAAP net income grew by 39.8% YoY to US$265mn, largely in line with our/consensus estimate of US$256/258mn, driven by enhanced operating margin of core educational business. Looking into 2QFY25E, management expects total net revenue (excluding revenue from East Buy) to grow by 25-28% YoY to US$851-872mn, decelerating due to the seasonality effect and macro impact on certain highASP businesses.Nonetheless, management expects revenue growth to reaccelerate in 3Q/4Q and full-year revenue growth to remain at c.+30% YoY in FY25E (excl. East Buy).We lower FY25 total revenue/non-GAAP earnings forecasts by 1.0/9.6% respectively, as the soft consumption sentiment affects overseas-related and high-end 1v1 tutoring businesses. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

New Oriental (EDU US) - Soft Consumption Weighs on Demand for High-ASP Businesses

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Although the tech sector in Hong Kong has surged over the last couple of weeks there appears to be minimal short covering in US-listed China tech names.</li>
<li>The performance of the "Magnificent 5" China tech names has led the rally as we outlined in <a href="https://www.smartkarma.com/insights/hong-kong-the-glass-is-half-full-time-to-buy-beta" target="_blank" data-smartkarma-citation="insights:134396" rel="noopener">Hong Kong: The Glass Is Half Full, Time to BUY Beta</a> .</li>
<li>The combination of of large outstanding short positions and a significant underweight of HK/China in international funds will lead to further upside in the tech sector.</li>
</ul>


Although the tech sector in Hong Kong has surged over the last couple of weeks there appears to be minimal short covering in US-listed China tech names.
The performance of the "Magnificent 5" China tech names has led the rally as we outlined in Hong Kong: The Glass Is Half Full, Time to BUY Beta .
The combination of of large outstanding short positions and a significant underweight of HK/China in international funds will lead to further upside in the tech sector.


<ul>
<li>The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag</li>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo (9898 HK)</a><a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> was rated a BUY as valuations and potential catalysts from parent <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> could support a higher stock price.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 HK)</a> was upgraded to BUY with higher higher price target due to profit increase. <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> was initiated with a BUY with strong upside.
</li>
</ul>


The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag

Weibo (9898 HK)Weibo Corp (WB US) was rated a BUY as valuations and potential catalysts from parent Alibaba Group Holding (9988 HK) could support a higher stock price.


China East Education (667 HK) was upgraded to BUY with higher higher price target due to profit increase. Dongfang Electric (1072 HK) was initiated with a BUY with strong upside.



BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)

China

New Oriental Education & Technology Group, Inc. offers educational services. The Company offers foreign language training, test preparation courses for admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, and other services. New Oriental Education & Technology Group also operates software development.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

New Oriental Education & Techn (EDU US)

Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.

Daniel Su

China Consumption Weekly (28 Oct 2024): Kweichow Moutai, JD, New Oriental, TAL, Meituan

Kweichow Moutai’s revenue rose by 17% YoY in the first three quarters of 2024. JD prevents users from closing accounts after the public relation...

Ming Lu

New Oriental (EDU US) - Soft Consumption Weighs on Demand for High-ASP Businesses

We lower FY25 total revenue/non-GAAP earnings forecasts by 1.0/9.6% respectively, as the soft consumption sentiment affects overseas-related and...

CMB International

HK/China: THE BIG SHORT (SQUEEZE)

Even though HK/China tech names have surged, short positions have not covered. The large underweight position in HK/China by international funds...

David Mudd

BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)

Conglomerate stocks in Hong Kong have outperformed this month. Weibo target price is upgraded and Dongfang Electric is intiated BUY. CEE saw a...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

​Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.

Daniel Su

China Consumption Weekly (28 Oct 2024): Kweichow Moutai, JD, New Oriental, TAL, Meituan

Kweichow Moutai’s revenue rose by 17% YoY in the first three quarters of 2024. JD prevents users from closing accounts after the public relation...

Ming Lu

New Oriental (EDU US) - Soft Consumption Weighs on Demand for High-ASP Businesses

We lower FY25 total revenue/non-GAAP earnings forecasts by 1.0/9.6% respectively, as the soft consumption sentiment affects overseas-related and...

CMB International

HK/China: THE BIG SHORT (SQUEEZE)

Even though HK/China tech names have surged, short positions have not covered. The large underweight position in HK/China by international funds...

David Mudd

BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)

Conglomerate stocks in Hong Kong have outperformed this month. Weibo target price is upgraded and Dongfang Electric is intiated BUY. CEE saw a...

David Mudd

Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.