BOCOM INTL: Lower target price of NEW ORIENTAL-S (09901) to 46 Hong Kong dollars, study abroad business growth under pressure.

BOCOM INTL released a research report stating that it is expected that the non-examination business of NEW ORIENTAL-S (09901) will see a 22% year-on-year increase in revenue in the third quarter, while the adjusted operating profit will decrease by approximately 2.5 percentage points year-on-year, mainly due to slower growth in study-abroad related businesses than expected and increased investment in culture and tourism. The bank predicts that the non-examination business's full-year revenue will grow by 25%, with an operating profit margin increase of 11.5%, although growth in study-abroad business is expected to remain under pressure. The bank believes that the group's long-term profit margin still has room for improvement, and has adjusted the target price from a decline to 46 Hong Kong dollars. Additionally, the company has sufficient cash flow, and despite the need for business adjustments, its brand and scale remain industry leaders with an attractive valuation, maintaining a "buy" rating.