Daiwa has released a report adjusting its forecasts for NEW ORIENTAL-S (09901). Due to an increase in losses attributable to non-controlling interests, the firm lowered its earnings per share estimates for fiscal years 2026 to 2028 by 0.4% to 4%. Despite this, Daiwa reaffirmed its "Buy" rating and raised the target price from HK$57 to HK$60.

NEW ORIENTAL-S delivered robust performance in the third quarter of fiscal 2026, with both revenue and profit exceeding market expectations by 5% and 7%, respectively. Following stronger-than-anticipated growth momentum, management raised its fiscal 2026 revenue growth guidance from 8%-12% year-on-year to 13%-14%.

The report suggests that improved revenue growth and operational efficiency have enhanced the visibility of profit growth. Looking ahead to fiscal 2027, Daiwa expects profit growth to reach 30% year-on-year, partly driven by cost savings from the integration of overseas test preparation and consulting services, as well as narrowing losses in the cultural tourism business. For fiscal 2028, profit is projected to grow 22% year-on-year.