Daiwa Capital Markets has released a research report stating that it has lowered its earnings per share forecast for NEW ORIENTAL-S (09901) for fiscal years 2026 to 2028 by 0.4% to 4%, primarily due to an increase in losses attributable to non-controlling interests. Despite this adjustment, the firm reaffirmed its "Buy" rating on the stock and increased the target price from HK$57 to HK$60.

NEW ORIENTAL-S reported solid performance for the third quarter of fiscal 2026, with both revenue and profit exceeding market expectations by 5% and 7%, respectively. Given the stronger-than-anticipated growth momentum, management has raised its revenue growth guidance for fiscal 2026 from a year-on-year increase of 8%-12% to 13%-14%. The report suggests that visibility on profit growth has improved, driven by revenue expansion and enhanced operational efficiency.

Looking ahead to fiscal 2027, Daiwa anticipates that profit growth could reach 30% year-on-year. This is expected to be partly supported by cost savings resulting from the integration of the overseas test preparation and consulting businesses, as well as a reduction in losses from the cultural tourism segment. For fiscal 2028, profit is projected to grow by 22% year-on-year.