Q4 2024 New Oriental Education & Technology Group Inc Earnings Call

July 31, 2024

Good evening and thank you for standing by for New Oriental's full year 2024 fourth quarter results earnings conference call.

Operator: Fourth Quarter Results and Earnings Conference Call. At this time, all participants are in listen-only mode.

Operator: After the management's prepared remarks, there will be a question and answer session. This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao. Please go ahead.

Speaker Change: At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question and answer session.

Sisi Zhao: Thank you. Hello, everyone, and welcome to New Oriental's fourth fiscal quarter 2024 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website, as well as our newsware services. Today, Stephen Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995

Stephen Yano: Well, that's a newswire services today, Steven Yano Executive President and Chief Financial Officer, and I will Oh sure New Orientals latest earnings results and business updates in detail with you after that Stephen and I will be available to answer your questions. Before we continue. Please note that the discussion today will contain forward.

Sisi Zhao: Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from those expressed today. A number of potential risks and uncertainties are outlined in our public filings with BSEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference call is being recorded. In addition, a webcast of this conference call will be available on New Oriental's investor relations website at investor.neworiental.org. I will now first turn the call over to Mr. Stephen Yao. Please go ahead.

Stephen Yano: Statements made under the Safe Harbor provisions of the U S. Private Securities Litigation Reform Act of 1995 forward looking statements involve inherent risks and uncertainties as such our results may be materially different from the views expressed today.

Stephen Yano: Number of potential risks and uncertainties are outlined in our public filings with the SEC, New Oriental does not undertake any obligation to update any forward looking statements, except as required under applicable law. As a reminder, this conference is being recorded in addition, a webcast of this conference call will be available on the orientals investor.

Stephen Yano: Relations website at Investor adopt new Oriental Dot org.

Stephen Yano: Now I'll first turn the call over to Mr. Stevens.

Please go ahead.

Zhihui Yang: Thank you, Sisi. Hello, everyone, and thank you for joining us on the call. Before we begin, we would like to firstly extend our gratitude to those who have been supporting and believing in New Oriental. We understand there might be some questions with regard to the recent separation of East Dubai and time with Yuhui. Before we go into New Oriental's performance, we would like to stress that this decision was carefully made after a considerable amount of transparent communication with Dong Yuhui, who has been a beloved colleague of ours and drove the instrumental growth of Easter Byte, as we send Yuhui our best regards for his new venture.

Mr. Stevens: Thank you Susie Hello, everyone and thank you for joining us on the call.

Speaker Change: Before we begin.

Speaker Change: We will like to firstly extends our gratitude to those who have been supporting and believing in new Oriental.

Speaker Change: Understand there might be some questions with regard to the latest separation of used to buy and time with Wade.

Speaker Change: Before we go into new Orientals performance, we would like to stress that this decision was carefully made Apollo a considerable amount of transparent communication with Tony who has been a beloved colleague of ours and drove incremental growth of used to buy.

Speaker Change: As with our.

Tony: Our faster regard for his new venture.

Zhihui Yang: The company remains fully dedicated to forging a stable path of healthy growth for the platform, devoting its very best to live up to our customer-centric promise to offer a diverse range of premium, healthy, delicious, yet cost-effective products to our customers. Anchored by the exceptional teams, far-reaching partnerships, over 400 SKUs, and distribution channels which we thankfully built over the years. Strategic pivots to expand our multi-pronged presence And we will continue to leverage Eastern Bai to propel knowledge sharing, product dissemination, and culture promotion to our valued customers in the long term. For more details, please refer to East Dubai's latest announcement.

Tony: The company remains fully dedicated in forging a stable path of healthy growth for the platform devoting our very best to live up to our customer centric Columbus to offer a diverse range of premium healthy delicious yet.

Tony: Cost effective products to our customers.

Tony: By the exceptional teams far reaching partnerships over 400, Skus and distribution channels, which we've essentially built over the years strategic pivot to expand our multi pronged presence are in the works and.

Tony: And we will continue to leverage is to buy to propel propel knowledge sharing product dissemination and the culture promotion.

Tony: Our valued customers in the long term.

Speaker Change: For more details please refer to east to bias latest announcements and now let's deep dive into new Oriental fiscal year 2020 for performance.

Zhihui Yang: And now, let's deep dive into New Oriental's fiscal year 2024 performance for New Oriental's financial results for this fiscal quarter. We are pleased to announce that the company has achieved healthy growth in our key businesses, with a solid top-line growth of 32.1%. Strong demand has fueled stable recovery across our business lines, while our portfolio of innovative ventures has invigorated the company's revenue with healthy contributions. New Oriental's bottom line performance has achieved the yields, with the operating margin and non-gap operating margin reaching 0.9% and 3.2% for this quarter, respectively.

For nuance and towards the final results of this physical quarter. We're pleased to announce that the company has achieved a healthy growth in our key businesses with a solid top line growth of 32, 1%.

Speaker Change: Strong demands have fulfilled a few stable recovery across our business lines, while our portfolio of innovative ventures.

Speaker Change: The company's revenue with healthy contributions.

Speaker Change: <unk> bottom line performance has achieved the yields with operating margin, our non-GAAP operating margin, reaching 0.9% and three 2% for this quarter respectively.

Zhihui Yang: Except for east-of-bias investment in private labor products and certain costs and expenses related to the platform of time with Yuhui, our spending on accelerated capacity extension and newly integrated tourism-related business, as well as additional incentives to the management and staff, led to a short-term impact on our operating margin this quarter. However, coupled with the increasing market demand, we strongly believe we made the right move to make the right investment. We anticipate that the pressure on margins for the educational business will reduce in the next fiscal year as we continue to improve the utilization of facilities and operating efficiency.

Speaker Change: Except for Easter biopsy investments in private label products and certain costs and expenses.

Speaker Change: To the platform over time, with our spending accelerated capacity expansion and newly integrated tourism related business.

Speaker Change: Well as the additional incentives to the management and staff have.

Speaker Change: To a short term impact.

Speaker Change: Our operating margin this quarter however.

Speaker Change: However, coupled with the increasing market demand we strongly believe we made the right moves to input their rights investments.

Speaker Change: Anticipates that the pressure on margins for the educational business will reduce in the next fiscal year as well.

Speaker Change: We continue to improve the utilization of facility and operating efficiency.

Zhihui Yang: We expect our operating margin of the company, excluding East Dubai, will expand year-over-year in the first quarter of 2025 and deliver a satisfactory operating profit for the full fiscal year 2025. Now, I would like to spend some time talking to you in detail about this quarter's performance across our existing business lines and new initiatives. Our key remaining business secured an encouraging trend, and new initiatives have shown positive momentum. Breaking it Down, The overseas test-tribe business recorded a revenue increase of 18% in dollar terms or 23% in RMB terms year-over-year for this quarter.

Speaker Change: We expect our operating margin of the company, excluding if the pie will expense year over year in the first quarter of 2025 and deliver satisfactory operating profits for the full fiscal year 2025.

Zhihui Yang: The Overseas Study Consulting Business recorded revenue increases of about 17% in dollar terms or 23% in RMB terms year-over-year for the first fiscal quarter of 2024. The adults and university students' business reported a revenue increase of 16% in dollar terms or 21% increase in RMB terms over the year for this quarter. Our new initiatives, which mostly revolve around facilitating students' all-round development, have continued to sustain a strong momentum in their respective ventures. Firstly, the non-academic tutoring courses, which we have offered in around 60 existing cities, focus on cultivating students' innovative ability and comprehensive quality.

Speaker Change: Now I would like to spend some time to talk about this quarter's performance across our existing business lines and new initiatives to you in detail.

Speaker Change: Our key remaining business secured encouraging trends.

On the new initiatives has shown positive momentum.

Speaker Change: Breaking it down.

Speaker Change: The overseas test prep business recorded a revenue increase of 18% in dollar terms were 23% in RMB terms year over year for this quarter.

Speaker Change: The overseas study consulting business reported revenue increase of about 17% in dollar terms or 23% RMB terms year over year for the first physical quarter over 2044.

Allison: Allison the University students business reported a revenue increase of 16% in dollar terms or 21% increase in RMB terms year over year for this quarter.

Allison: Our new initiative, which most of the revolve around facilities even students all around developments have continued to sustain our strong momentum in their respective interests.

Allison: Firstly.

Diamond: Diamond the tutoring courses, which would have offered.

Diamond: Around 60 existing Cds focus on cultivating students either basically of ability and the comprehensive quality.

Zhihui Yang: We're excited to see further penetration in those markets we have tapped into, especially in high-tier cities, which total approximately 875,000 student enrollments reported in this fiscal quarter. The top 10 cities in China contribute over 60% of this. Secondly, the intelligent learning system and device business has been adopted in around 60 cities. We are happy to see stable customer retention and scalability, with approximately 188,000 active paid users reported in this quarter. The revenue contribution of this initiative from the top 10 cities in China is over 55%.

Diamond: We're excited to see further penetration in both markets, we have tapped into especially in high tier cities, which will total approximately 875 solvent students enrollments reported in this physical quarter. The top 10 cities in China contribute over 60%.

Diamond: Of this distance second.

Diamond: Secondly, the intelligence learning system and device business has been adopted in a ramped 60 Cds were happy to see stable customer retention and scalability.

Diamond: Proximately 188 solvent active paying users reported in this quarter.

Diamond: The revenue contribution of this initiative from the top 10 cities in China is over 55%.

Zhihui Yang: Our smart education business, education materials, and digitalized smart study solutions have continued to contribute material yields to the overall advancement of the company. In summary, our new educational business initiatives reported a revenue increase of 50% in dollar terms or 57% increase in RMB terms year-over-year for this quarter. In addition, the newly integrated tourism-related business line, one of our creative endeavors, is tailored with diverse offerings of cultural trips, study tours in China and overseas, as well as camp education.

Diamond: Our smart education business education material and these realized smarter.

Diamond: <unk> solutions have continued to contribute material yields to the overall advancements health of the company.

Diamond: In summary, our new educational business initiatives reported a revenue increase of 60% in dollar terms or 57% increase in RMB terms.

Diamond: Year over year for this quarter.

Speaker Change: In addition, the newly integrated tourism related business in line one of our creative endeavors is Taylor with diverse offerings of cultural shifts so that it works in China and overseas as well.

Zhihui Yang: Within the business line, our study tour and research camp visits for students of K-12 and university age continue to achieve sustainable growth this quarter, who have conducted the study towards the research attempt in over 65 cities across the country, with the top 10 cities in China offering over 55% of the revenue share of this new business. We also piloted a number of top-notch tourism offerings to extend our reach to all age groups, including middle-aged and elderly individuals across 27 featured provinces.

Speaker Change: The camp education would be in the business Alliance. Our study tour and research cap. This is for students up to 12, and youll be where C. H continuing to achieve sustainable growth this quarter.

Speaker Change: We have conducted the study towards the research attempt over 65 cities across the country.

Speaker Change: With the top 10 cities in China, offering over 55% of our revenue share of this new business.

Speaker Change: We're also piloting a number of top notch tourism offerings to extend our reach to all age groups, including a middle aged and elderly individuals.

Speaker Change: <unk> 2007 feature to provinces.

Zhihui Yang: As we are still at a preliminary stage of planning, testifying, and evaluating the visibility of the business in selected regions, we will keep you posted should there be timely updates. With regard to our OMO system, we have proceeded with revamping our platform and leveraging our education infrastructure and technology edge, remaining key businesses, and new initiatives, with a vision to provide an advanced, Diversified Education Service to customers of OH. During the reporting period, a total of $30.5 million was invested in our OMO teaching platform, which equips us with the flexibility to maintain unrivaled service to students.

Speaker Change: We are still at.

Speaker Change: Preliminary stage of planning testify evaluating the visibility of the business.

Speaker Change: We will keep you posted should there be timely updates.

Speaker Change: With regards to our <unk> system would have perceived in revamping our platform and leverage our education in infrastructure and technology edge.

Speaker Change: Many key business and new initiatives.

Speaker Change: With a vision to provide advanced.

Speaker Change: Diversified either patient service to customers of all ages.

Speaker Change: During the reporting periods, a total of $35 million has been invested.

Speaker Change: Teaching platform, which equips us off the flexibility to maintain a rivaled service to students.

Speaker Change: With regards to the company's latest financial position.

Speaker Change: Confidence to share with you that the company is seeing a healthy financial status with cash and cash equivalents term deposits and short term investments totaling approximately $4.9 billion.

Speaker Change: Yes ambition.

Speaker Change: We would like.

Speaker Change: To highlight the company's board of directors approved a share repurchase program in July 2022, under which the company is authorized.

Speaker Change: Purchase up to $400 million of the company's avs, where common shares through the next 12 months.

Speaker Change: The company's board of directors further approved to extent the effective time of the share repurchase program to May 31 2025.

Speaker Change: As of July <unk> 2024.

Speaker Change: The company repurchased.

Speaker Change: Aggregates of approximately $7 3 million for approximately $296 1 million from the open market.

Zhihui Yang: to highlight the company's Board of Directors approved a share repurchase program in July 2022, under which the company is authorized to repurchase up to $400 million of the company's ADS or common shares through the next 12 months. The company's Board of Directors further approved to extend the effective time of the share repurchase program to May 31, 2025, as of July 30, 2024. The company repurchased an aggregate of approximately 7.3 million ADSs for approximately $296.1 million from the open market. Now, I will turn the call over to Sisi to share with you the key financials. Sisi, please go ahead.

Speaker Change: Our turn the call over to <unk> to share with you about the key financials.

Speaker Change: Please go ahead.

Sisi Zhao: Before we go into our key financials, we'd like to inform you that, as part of the company's business line reorganization, the company's wholly owned subsidiary and variable interest entity entered into an agreement with Easterby and its subsidiaries and variable interest entities to acquire ISDABAI's online education business for an aggregate consideration of 1.5 billion RMB. The consideration was agreed by both parties after arm's length negotiations with reference to an independent valuation. The acquisition was completed in this fiscal quarter.

Speaker Change: Before I go into our key financials wed like to inform you that as part of the company's business My reorganization the company's wholly owned subsidiary and <unk>.

Speaker Change: Variable interest entity entered into an agreement with <unk> and a subsidiary.

Speaker Change: <unk> and variable interest entity.

Sisi Zhao: Upon completion, the online education business was consolidated from ISDABAI's consolidated financial statements and was deconsolidated from ISDABAI's consolidated financial statements and is now recorded by the company under educational services. Now, for our key financial details for this quarter. Operating costs and expenses for the quarter were US$1,126.2 million, representing a 38.6% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which is share-based compensation expenses, were US$1,100.4 million, representing a 40.7% increase year-over-year.

Speaker Change: Acquire is the buys online education business at an aggregate consideration of $1 5 billion RMB. The consideration of ours have great by both parties after arm's length.

Speaker Change: Negotiations with reference to an independent validation the acquisition was completed in this fiscal quarter upon completion.

Speaker Change: Online education business, where it's consolidated.

Speaker Change: From his Tobias consolidated financial statements and consolidated from Easter buys consolidated financial statement and is now recorded by the company under educational services.

Sisi Zhao: The increase was primarily due to the costs and expenses related to the substantial growth in e-supplies, private label products, live streaming, e-commerce business, and an accelerated capacity expansion for education. Cost of revenue increased by 38.5% year-over-year to $542.4 million. Selling and marketing expenses increased by 40.9% year-over-year to $208.2 million. General and administrative expenses for the quarter increased by 37.5% year-over-year to $375.5 million.

Speaker Change: For our key financial details for this quarter.

Speaker Change: Operating costs and expenses for the quarter or 1100, $26 $2 million, representing a 38, 6% increase year over year non-GAAP operating costs and expenses for the quarter, which is quota share based compensation expenses.

Speaker Change: $704 million.

Speaker Change: Representing a 47% increase year over year. The increase was primarily due to the cost and expenses related to the substantial growth and is the bias private label products life streaming e-commerce business and accelerated capacity expansion for education business.

Speaker Change: Cost of revenue increased by 38, 5% year over year to $542 $4 million, selling and marketing expenses increased by 49% at year over year.

Speaker Change: $208 2 million.

Speaker Change: G&A expenses for the quarter increased by 37, 5% year over year to $375 $5 million non-GAAP, G&A expenses, which exclude share based compensation expenses.

Sisi Zhao: Non-GAAP G&A expenses, which include share-based compensation expenses, were $355.2 million, representing a 42.3% increase year-over-year. Total share-based compensation expenses, which were allocated to related operating cost expenses, decreased by 15.5% to $25.8 million in the fourth fiscal quarter of 2024. Operating income was $10.5 million, representing a 78.1% decrease year-over-year.

Speaker Change: There are $355 $2 million, representing a 42, 3% increase year over year.

Speaker Change: Total share based compensation expenses, which were allocated to related operating costs and expenses decreased by 15, 5% to $25 $8 million in the fourth fiscal quarter of 2024.

Speaker Change: Operating income was $10 $5 million, representing a seven 778.

Speaker Change: A 1% decrease year over year.

Zhihui Yang: Non-GAAP income from operations for the quarter was $36.3 million, representing a 53.8% decrease year-over-year. Net income attributable to New Oriental for the quarter was $27 million, representing a 6.9% decrease year-over-year. Basic and diluted net income per ADS attributable to New Oriental were $0.16 and $0.16, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $36.9 million, representing a 40.5% decrease year-over-year. Non-GAAP basic and diluted net income per ADS attributable to New Oriental were $0.22 and $0.22, respectively.

Speaker Change: non-GAAP income from operations for the quarter were $36 $3 million, representing a 53, 8% decrease year over year net income attributable to new Oriental for the quarter.

It was $27 million, representing a six 9% decrease year over year basic and diluted net income per ads attributable to new Oriental or 16, 6% respectively.

Speaker Change: non-GAAP net income attributable to new Oriental fro, the quarter were $36 9 million, representing a 45% decrease year over year non-GAAP basic and diluted net income per ads attributable to new Oriental or 'twenty to 'twenty two respectively.

Zhihui Yang: Net cash flow generated from operations for the fourth fiscal quarter of 2024 was approximately $376.8 million, and capital expenditures for the quarter were $27.4 million. Turning to the balance sheet, as of May 31, 2024, New Oriental had cash and cash equivalents of $1,389.4 million. In addition, the company has $1,489.4 million in term deposits and $2,865.6 million in short-term investments. New Oriental's Deferred Revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the service or goods are delivered, at the end of the fourth quarter of fiscal year 2024 was $780.1 million, an increase of 33.1% as compared to $1,337.6 million at the end of the fourth quarter of last fiscal year.

Speaker Change: Net cash flow generated from operations for the fourth fiscal quarter of 2024, whereas approximately $376 $8 million and capital expenditure for the quarter or 27 4 million.

Speaker Change: Yes.

Speaker Change: Turning to the balance sheet as of May 31, 2024, New Oriental had cash and cash equivalents of <unk> hundred $89 $4 million. In addition, the company has 1400 80 $944 million in term deposit and two.

Speaker Change: <unk> hundred $65 $6 million in term deposit.

Speaker Change: In short term investments.

New orientals deferred revenue, which representing cash collected upfront from customers and related revenue that it will be recognized as a service or goods are delivered.

Speaker Change: The end of the fourth quarter, our fiscal year, 2024, or 700 $781 million, an increase of 33, 1% as compared to 1300 and $37 $6 million at the end of the fourth quarter of last fiscal year.

Zhihui Yang: Now I'll hand over to Stephen to go through our outlook and guidance. As we look ahead to 2025, we are confident that our education business will embark on a healthy trajectory of growth fueled by continuously strong demand. Supported by New Oriental's rooted resources that have stood the test of time, we have a firm belief in delivering marginal expansion for the whole company, except for East Dubai, in the first quarter of 2025 and attaining a satisfactory operating profit for the full fiscal year.

Speaker Change: Now I'll hand over to Stephen to go through our outlook and guidance I guess.

Speaker Change: Yes.

Speaker Change: Luca Hatch for 2025, we're confident that our educational business.

Stephen Yano: Embark on a healthy trajectory of growth fueled by the continuously strong demand supported by new.

Stephen Yano: Oriental smooth it resources that have stewards of the type of a time will have firm leaf delivering margin expansion for the whole company, except for Easter in the first quarter of.

Stephen Yano: 2025.

Attending such factory operating profit for the full fiscal year.

Zhihui Yang: Simultaneously, we expect to achieve tremendous growth for our new tourism-related business, in belief that the significant resources we imagine for a nationwide rollout of these tours will contribute meaningful revenue in the new fiscal year. As we ensure a healthy balance between revenue and profitability growth, we will cautiously manage our capacity expansion and hiring to underpin the development of our educational business in the new year. We plan to increase our capacity by around 20 to 25 percent for the fiscal year 2025. The most new openings will be launched in cities with better top-line and bottom-line performance.

Stephen Yano: Simultaneously, we expect to achieve tremendous growth for our new tourism related business and believe that the significant resource we matched for a nationwide rollout.

Stephen Yano: These tours will contribute meaningful revenue in the new fiscal year.

Speaker Change: As we ensure a healthy balance between revenue and profitability growth, we will cautiously manage our capacity expansion in a hurry to underpin the development of educational business in the new year.

Speaker Change: We plan to increase our capacity by around 20% to 25% for the fiscal year 2025. The most of the new openings will be launched in the cities with better top and bottom line performance.

Zhihui Yang: Rest assured, we will closely monitor the pace and scale of the new openings in accordance with the local operations and the financial performance during the year. We expect total net revenue, excluding revenue generated from Easter Buy, in the first quarter of fiscal year 2025, June 1, 2024 to August 31, 2024, to be in the range of $1,254.7 million to $1,283.5 million, representing a year-over-year increase in the range of 31% to 3 In addition, based on our current estimation, we expect the operating margin for the whole company, except for East Dubai, in the first quarter will be expanded by EOB year.

Speaker Change: Of course, we will closely monitor the pace and scale of the new openings.

Speaker Change: According to the local operations and the financial performance during the year.

Speaker Change: We expect total net revenue excluding revenue generated from Dubai in the first quarter of fiscal year 2025 drew in for 2024 to August 31.

Speaker Change: 24 to be in the range of one solvent $254 $7 million to 1283 $5 million representing year over year increase in the range of 31% to 34%.

Speaker Change: In addition, based on our current estimation, we expect the operating margin for the whole company, except for Easter by in the first quarter will be extensive.

Speaker Change: Year over year.

Zhihui Yang: To conclude, New Oriental has been known as a resilient adventure that sails, on its voyage, through the years of change for the transformation. Thanks to the support of our valued customers, promising a premium offering and giving back to society in the long term stand firm as our priorities from day one. As always, we will devote reasonable resources to research and the application of new technologies, such as AI and chat GPT, into our educational and product offerings, with the mission to uplift our strength in pursuit of growth and operating efficiency.

Speaker Change: To conclude new Oriental has been known as a resilience advent for that sales.

Speaker Change: On this voyage.

Speaker Change: Any of the years.

Speaker Change: Change of the transformation, thanks to the support of our customer promise the premium offering and giving back to society in the long term stay in the form of our priorities from day one.

Speaker Change: What would be most reasonable resources on research and application of new technologies, such as AI and touch GTT into our educational and product offerings.

Speaker Change: With a vision to uplift, our strengths and procedural fee growth and operating efficiencies.

Zhihui Yang: We will continue to seek guidance from and cooperate with the government authorities in various provinces in China, comply with relevant policies, as well as to further adjust our business operations as required. We will also work diligently to enhance the nation's education level to strengthen its leading position so as to unveil further potential across all our business lines and realize our vision. I must say that these expectations and forecasts reflect our considerations of the latest regulatory measure as well as our current and preliminary view, which is subject to change.

Speaker Change: We will continue to seek guidance from and cooperate with the government and other authorities numerous provinces in China comply with relevance policies as well as to further adjust our business operations as required.

Speaker Change: We will also work diligently to enhance the Indonesia side, the patient level to strengthen its leading position so as to unveil further potential across all our business lines and realize our vision.

Speaker Change: I must say that this by patients and forecast reflect our considerations of the latest regulatory measure as well as our current and preliminary view, which is subject to change.

Operator: This is the end of our fiscal year 2024 Q4 summary. At this point, I would like to open the floor to questions. Operator, please open the call for these. Thank you. Thank you. The question and answer session of this conference call will start in a moment. In order to refer to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been answered. To ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.

Speaker Change: This is the end of our fiscal year 2020 for Q4 summary.

Speaker Change: This points I would like to open the floor for questions.

Speaker Change: <unk>. Please open the call for <unk>. Thank you.

Speaker Change: Thank you.

Speaker Change: A question and answer session of this conference call will start in a moment in order to be sorry to all callers who wish to ask questions. We'll take one question at a time from each caller. If you have more than one question. Please request to join the question queue again. After your first question has been addressed to ask question. Please.

Speaker Change: Crestar one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Speaker Change: Yeah.

Operator: Please stand by; we will compile the Q&A roster. Our first question is from Alice Kai from Citi. Please proceed with your question. Good evening, Stephen and Sisi.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Our first question is from Ollie's kite from Citi. Please proceed with your question.

Ollie Skite: But do you have any Steve and then Susie. Thank you for your presentation I have a picture of about.

Alice Kai: Thank you for your presentation. I have a question about the growth strategy. Since you are not planning to expand into new cities, how much room for growth is left in your existing locations before reaching saturation? Could you please share your thoughts on this?

Speaker Change: Go strategy since you are not planning to expand into new cities, how much room tacos is lapping dol existing locations before reaching saturation and.

Speaker Change: Could you please.

Speaker Change: Color about this thank.

Speaker Change: Thank you so much.

Speaker Change: Okay.

Zhihui Yang: Thank you so much. Yeah, thank you, Alice. You know, as for the Learning Center Expansion Plan, you know, I think, you know, we, as I said, we plan to increase the capacity expansion by 20 to 25% in the new physical year. And I think we will open most of the new learning centers for the new classroom areas in the, mostly in the existing. And I think most of the openings will be in the cities with the better performance, you know, both top line growth and margin expansion in fiscal year 24.

Speaker Change: Thank you.

Speaker Change: Yes.

Speaker Change: As for the.

Speaker Change: The learning center expansion plan.

Speaker Change: I think we as I said we.

Speaker Change: We plan to increase the capacity expansion.

Speaker Change: By 20% to 25% in the new physical year, and I think we will open the the most of the new learning centers, where the new classroom areas in the.

Speaker Change: Mostly in the existing cities and I think most of the openings.

Speaker Change: We'll be in the cities with the better performance.

Both the top line growth and the margin expansion in fiscal year 'twenty, four and I think we will keep monitoring the pace and the scale of the new openings, we care more about the balance of the topline growth and the margin expansion. So this is R. B.

Zhihui Yang: And I think we will keep monitoring the pace and the scale of the new openings. You know, we care more about the balance of top-line growth and margin expansion. So this is our strategy.

Speaker Change: The strategy and I think in the coming new year.

Zhihui Yang: And I think in the coming new year, you know, upon the extension of the new learning center by 20 to 25%, we will keep the utilization rate up. And I think the strong revenue growth in the new year will cover the incremental classroom rent. Thank you, Alex. Thank you so much for your sharing.

Speaker Change: Upon the extension of the new learning center by 20% to 25% what will keep the utilization rates up and I think the strong revenue growth in the full year will cover the incremental cost of them.

Speaker Change: Our rental.

Alice: Thank you Alice.

Speaker Change: Thank you so much for sharing.

Alice: Thank you.

Operator: Thank you. We will now take the next question. From the line of Yiwen Zhang from China Renaissance.com, please go ahead.

Speaker Change: We will now take <unk>.

Speaker Change: The next question.

Speaker Change: From the line of <unk>, Zhang from China Renaissance Dot Com. Please go ahead.

Yiwen Zhang: Hey, thanks. Good evening. Thanks for taking my question. So I would like to follow up on the, you know, margin decline in this fiscal quarter. You mentioned several reasons in your prepared remarks. Could you discuss more about, you know, which ones are, like, recurring?

Zhang: Hey, Thanks, Good evening. Thanks for taking my question. So I would like to follow up until you know monitoring decline anticipated quarter measure.

Speaker Change: Measuring several reasons in your prepared remarks to discuss more about <unk>.

Speaker Change: Well all of which while a recording and also when you look at what type of education business, our know how to wastepaper monitoring trade trend in critical quarter.

Zhihui Yang: And also, if we look at the education business alone, how do we see the margin actually trending in this fiscal quarter? Thank you. Yeah, yeah, thank you, Yiwen. Let's start with this quarter's margin analysis. Yeah, the OP margin decreased in this quarter, but I think it's mainly due to a couple of reasons. Number one, so you know, we accelerate the Learning Center extension this quarter and even in lots of tools.

Speaker Change: Thank you.

Speaker Change: Yeah, Yeah. Thank you, even let's start with the this quarter's Martha analysis. The op margin decrease in this quarter I think it's mainly due to a couple of reasons number one so you know we.

Speaker Change: We accelerated the learning center expansion.

Speaker Change: In this quarter and even in the.

Speaker Change: Lots of two quarters and also we newly message.

Zhihui Yang: And also, you know, we recently invested in a new tourism business. And number two reason, you know, we gave additional incentives to the management and staff in Q4. And number three is, you know, we used to buy investments in private labor products and some certain, you know, one-time costs and expenses related to the sales time with the So I think, you know, partly some of the expenses are one time these, the incremental cost expenses in Q4.

Speaker Change: The new chosen business and number two reason when made the additional insights.

Speaker Change: To the management of that stuff.

Speaker Change: In Q4 and number three is used to buy some essence in private label products and some certain onetime costs and expenses related to the the sales the time with the U K. So I think part partially some of the expenses as one time.

Speaker Change: Of these.

Speaker Change: The incremental cost of expenses in Q4.

Yiwen Zhang: And as for the margin outlook, we expect the OP margin in the coming Q1 of the whole company, excluding East Dubai, to be expanded by 200 basis points year-over-year. So that means you will see more operating leverage and higher operating efficiency in the coming Q1. And we are quite optimistic about the margin expansion of the company, except for East Dubai in fiscal year 2025, the margin will be expanded. I think we will, as I said, you know, we will keep the, get more operating leverage and keep the learning center utilization rates up. So this quarter is, you know, the margin decrease is just one time. And next quarter, you will see the margin expansion for education. Thank you, Yiwen. Okay, thanks. That's very clear.

Speaker Change: As for the margin outlook, we expect the <unk> margin in the coming Q1 of the whole company, excluding Easter buy will be expanded by 200 200 basis points year over year. So that means you will see.

Speaker Change: More operating leverage and see the higher our operating efficiency in the coming Q1, and we are quite optimistic about the margin expansion of the company.

Speaker Change: Except for Easter buy in fiscal year 2005, the margin will be expanded.

Speaker Change: I think.

Speaker Change: FSIC.

Speaker Change: We will keep the gut.

Speaker Change: Get more operating leverage and keep the learning center utilization rates.

Speaker Change: So this quarter.

Speaker Change: <unk> margin decreased its just onetime and next quarter, you will see margin expansion for the education business.

Thank you you bet.

Speaker Change: Okay, that's very clear.

Speaker Change: Thank you we will now take the next question.

Operator: Thank you. We will now take the next question, from the line of Felix Liu from UBS: please go ahead. First, I just want to say that I have a lot of respect for how New Oriental handled the situation with Dongyuehui and believe the decisions you made will be beneficial to the long-term branding of New Oriental. My question is a follow-up on the margin expansion.

Speaker Change: From the line of Felix Liu from UBS. Please go ahead.

Felix Liu: Thank you management for taking my question first I just wanted to say that I have a lot of respect to the Holly.

Felix Liu: Our until handled the situation was the only way and believe the decisions you made will be beneficial to the long term binding offer and you.

Felix Liu: Oriental.

Felix Liu: You mentioned that in Q1, you expect the margin to expand by 200 bps. May I check the pace of margin expansion or your expectation of the pace of expansion for the rest of the year? Do you think Q1 will be the peak of margin expansion, or do you expect this momentum to continue or even improve in the following quarters after Q1? And also, on the margin improvement driver, do you see the driver as mainly from operating leverage, or do you see the underlying segment margin also has potential for improvement?

Speaker Change: My question. My question is a follow up on the margin expansion.

Speaker Change: You mentioned that Q1, you expect the margin to expand by 200 bps.

Speaker Change: Check the pace of margin expansion or your expectation on the pace of expansion for the rest of the year do you think Q1 will be the peak of margin expansion or do you expect this momentum to continue or even improve in the following quarters. After Q1.

Speaker Change: And also on the margin improvement drivers do you see that driver is mainly from operating leverage or do you see.

Speaker Change: The underlying segment margin also has the potential for improvement. Thank you.

Zhihui Yang: Yeah, Felix, you know, as for the margin outlook, you know, yeah, we guided the margin expansion in Q1 for the educational business to be expanded by 200 basically. And I think, as you know, Q1 is the peak season for the education business. And so for the rest of the year, Q2 to Q4, I think we'll keep you updated on your guys' margin expansion, you know, in detail. And so, but as I said, we're quite confident about the whole year margin expansion for education.

Speaker Change: Yes.

Speaker Change: You know as for the margin outlook, yes, we guided the margin expansion in Q1 for the educational business. It won't be extended by 200 basis points and I think as you know Q1 is the peak season for the education, either personal business and so in the rest of the year or Q2.

Speaker Change: Q4, I think we'll kick.

Speaker Change: Posted your guys Thats a good margin expansion.

Speaker Change: In detail and so but as I said, we're quite a confidence about the whole year margin expansion.

Speaker Change: For the other person business and.

Zhihui Yang: And the operating laboratory, yeah, you know we opened more learning centers and hired more people in Q3 and Q4, but I think this market demand for educational business, also for the overseas related business, especially for the K-12 business, I think the demand is very, very strong. And where we have seen less competition in the market, even though we know the competitors are investing more money and human resources to take more market share, we're quite optimistic that New Oriental will take more market share from the market.

Speaker Change: Oh, please elaborate yeah yeah.

Speaker Change: You know, we opened more learning centers and hired more people in in Q3 and in Q4.

Speaker Change: Market demand for educational business also for the overseas business.

Speaker Change: Especially for the K 12 business I think the demand is very very small and we have seen the less competition in the market, even though we know.

Speaker Change: Others are or invest more money in it and human resources to.

Speaker Change: Take more market share, but we're quite optimistic.

Speaker Change: Optimistic Fox, New Oriental will take more market share from the market and I think we do have the operating leverage that you have so you know.

Zhihui Yang: And I think we do have operating leverage in hand. So, you know, we will leverage the business by, you know, the top-line goals. What I mean is the top-line goals will, I think we will beat the top-line guidance again in Q1 for the whole new year.

Speaker Change: We'll leverage the business by <unk>.

Speaker Change: Top line growth the what I missed the topic was well I think what will be the topline guidance again in the.

Speaker Change: What were the portfolio.

Speaker Change: And so I would believe that margin expansion in Q1, and the whole year of 2025.

Speaker Change: Yeah.

Speaker Change: Thank you.

Operator: And so I would believe the margin expansion in Q1 and the whole year of 2020. Thank you. We will now take the next question, from the line of Alice Ma from Bank of America. Please go ahead. Hi, this is Lucy from Bank of America.

Speaker Change: We will now take the next question.

Speaker Change: From the line of at least <unk> from Bank of America. Please go ahead.

Alice Ma: So I have a question on enrollment growth versus the capacity expansion pace. So if we're looking at this quarter, actually, our number of learning centers has been expanded by like 42% on a year-over-year basis, but non-academic tutoring enrollment only grew by 39%. I know it's not a big difference, but if we're looking at the past quarters, enrollment growth has always been higher than the capacity expansion pace. So how should we think about the, you know, the difference between these two? Is it because of timing or some other reasons?

Speaker Change: Oh, Hi, Hi, this is Luke.

Luke: The bank of America.

Luke: I have a question on the enrolment growth versus the capacity expansion pace. So if we look at this quarter are actually a number of learning centers has been expanded by like 42% on a year over year basis, but no academic tutoring enrolment only grow like 39%.

Speaker Change: I know, it's not a big difference, but looking at the past quarters loan growth is always higher than capacity expansion pace. So how should we think about that or defer.

Speaker Change: The difference between these two is it because of timing.

Thank you.

Zhihui Yang: Thank you. Partially, it's because of the timing, like the student enrollment window, the open, and the timing difference. And so, yeah, I think, as I said, you know, I think in this quarter, you know, at the end of this fiscal year, we have added around 37 percent of new capacity. Yes, that's a little bit bigger than we expected. But I think we will bear fruit in Q1. So, you know, for example, as for the new business for K-12, for the new business, you know, the top line growth in this quarter in R&D terms is 57 percent year-over-year.

Speaker Change: Part of it's because of the timing like the odds.

Speaker Change: Student enrollment Wendell.

Speaker Change: The open like the timing difference and so yeah, I think our society.

Speaker Change: <unk>.

Speaker Change: I think the in this quarter.

Speaker Change: Uh huh.

Speaker Change: Yes.

Speaker Change: This fiscal year.

Speaker Change: We have added around 37% of new capacity.

Speaker Change: Yes, that's a little bit.

Speaker Change: Bigger than we expected, but I think we will bear fruits.

Speaker Change: I think the Q1, so you'll know for example for the new business for the K 12 for the new business.

Speaker Change: Top line growth in this quarter in RMB terms.

Speaker Change: 57% year over year and in the coming.

Zhihui Yang: And even in the coming summer, in Q1, we believe the revenue of the new business will be somewhere around 50 percent, 45 to 50 percent year-over-year growth. So I think the revenue will cover the incremental cost of the new learning centers. And on the other hand, I think the rental per learning center per square meter gets decreased because the markets change a lot. So I do believe we will get operating leverage on rental, you know, on the other costs and expenses going forward.

Speaker Change: Summer into Q1, we believe these are the revenue of the new business will be somewhere around 50%, 45%, 50% youll be a wells. So I think the revenue will cover the.

Speaker Change: The incremental cost of the new learning centers and on the other hand, I think the a.

Speaker Change: The rental per learning center per square meters got decreased because the market's changed a lot. So I do believe we'll get the operating leverage are rentals.

Speaker Change: Other costs and expenses going forward.

Speaker Change: We'll see.

Zhihui Yang: Thank you, Stephen. Sorry, just if I may, one small question is that you mentioned in the May quarter that there was a small amount of one-off compensation paid to Dong Yuhui. So, I think it's one-off, but will there be any compensation paid to Dong Yuhui in the first quarter?

Stephen Yano: Thank you Stephen sorry, just if I may one more question is that you mentioned in the may quarter.

Stephen Yano: Mount of like one off compensation paid to <unk>. So.

Speaker Change: I think it's one off but will that be any compensation paid to <unk> in the first quarter.

Alice Ma: That'll be all. Thank you. Yeah, I think you know some of the cost and expenses related to the sale of Hui Tong Xing will happen in Q4 and the coming Q1, so we will keep you posted on the next earnest call to tell you the exact numbers of how much we spend in the coming Q1, but it's one time. Okay. Thank you. Okay.

Stephen Yano: Thank you.

Stephen Yano: Yeah, I think you know some of the.

Speaker Change: Costs and expenses.

Speaker Change: Later to be ourself.

Speaker Change: The yoplait.

Speaker Change: Home shield will be.

Speaker Change: Happens in the Q4 and two in the coming two watt. So we'll keep you posted.

Speaker Change: In the next earnings call to tell you would be exact numbers of how much we spend in the coming July.

But it's one time, okay. Thank you.

Speaker Change: Okay. Thank you so much.

Thank you will.

Speaker Change: Now take the next question.

Operator: Thank you so much. Thank you. We will now take the next question. From the line of Timothy Zhao from Goldman Sachs, please go ahead. Great. Hi, Stephen. Hi, Sisi.

Speaker Change: From the line of Timothy <unk> from Goldman Sachs. Please go ahead.

Timothy: Great Hi, Stephen Hi, Thank you for taking my question. So my question is regarding the revenue outlook for the new fiscal year. Just wondering if you can give us guidance on the revenue growth for different segments of the business, including the tradition, okay to help the overseas test prep consulting and okay. So on your initiative.

Timothy Zhao: Thank you for taking my question. So, my question is regarding your revenue outlook for the new fiscal year. Just wondering... As for the revenue outlook for the new year, in different segments, you know, the overseas tax prep business, I think the revenue growth in the coming year will be somewhere around 20 to 25% of the year. And the consulting business, the revenue growth will be somewhere around 15% year-over-year.

Speaker Change: I think that would be very helpful. Thank you.

Speaker Change: Yes as for the.

Speaker Change: The revenue outlook for fiscal year for the new year.

Speaker Change #100: In different segments, the oversea test prep business I think fee.

Speaker Change: Revenue growth in the coming year will be somewhere around 20% to 25% year over year and the consulting business.

Speaker Change: The revenue growth will be somewhere around 15% a year over year and the new business I think the top line growth of the new business.

Timothy Zhao: And the new business, I think the top-line growth of the new business will be expanded by 45% to 50%. And as for the high school business, I think the revenue growth will be somewhere around $25 to $30.

Speaker Change: Be extended by a week.

Speaker Change #101: It will be increased by 45.

Speaker Change: 250%.

Speaker Change: And the I saw the high school business I think the revenue growth will be somewhere around 25% to 30% and as always we will give the guidance by most of the conservative one.

Zhihui Yang: And, you know, as always, we will give guidance to the most concerned. Thank you. Thank you. We will now take the next question, from the line of Charlotte Wei from HSBC. Please go ahead. Good evening, Sisi and Stephen.

Speaker Change #102: Okay, great. Thank you.

Speaker Change #105: Thank you we will now take the next question.

Speaker Change #105: From the line of Charlotte Wei from HSBC. Please go ahead.

Speaker Change #102: Okay.

Steven: And then Steven Thank you for taking my question. My question is regarding competitive landscape. So we know take low cost small players have been more aggressive in terms of expansion.

Operator: Thank you for taking my question. My question is regarding the competitive landscape. We noticed local small players have been more aggressive in terms of expansion. So do you see competition intensifying this summer, especially in the top tier cities?

Speaker Change #104: See competition intensifying in this summer, especially in the top tier city. So can you share more color on the summer enrolment growth and student retention rate. Thank you.

Charlotte Wei: So can you share more color on the summer enrollment growth and the student retention rate? Thank you. As for the competition environment, yeah, we have seen some competitors in that so many have opened more learning centers in the top cities, but, you know, as a whole analysis of the competition, I think the competition situation now is less, a lot, than a couple of years ago, you know, before the policy.

Speaker Change #102: Okay.

Speaker Change #107: As for the competition environment, Yes, we have seen some competitors invest some money.

Speaker Change #106: Open more learning centers in the top cities, but.

Speaker Change: But.

Speaker Change #103: I think I saw.

Speaker Change #103: I see the whole another healthy competition I think the competition situation now it's less than a couple of years ago before the policy, so and so I believe.

Charlotte Wei: So and so I believe the competition is less, and I think New Oriental will take more market share and seize the opportunity to provide good services to these students. And the three enrollments for the summer, we have already given guidance, and you know the top-line growth will be in the range of 31% to 34% in dollar terms year-over-year. And this is for the education business, and you know, take out the excluding East Dubai and yeah, consider considering consider the style of our guidance.

Speaker Change #103: The competition is less and.

Speaker Change #103: I think that new Oriental will take more market share and the C and seize the opportunity to provide the.

Speaker Change #112: Zero basis to the students and.

Speaker Change #112: The student enrollment for the summer and we have already given the guidance.

Speaker Change #111: And they get off the top of them.

Speaker Change #109: Growth will be.

Speaker Change #108: In the range of 31% roughly.

Speaker Change #114: <unk>, 4% in dollar terms year over year and this was for education business.

Speaker Change #108: And.

Speaker Change #108: Take all the excluding the Easter by it and.

Speaker Change #108: Consider considering considered.

Speaker Change #113: The style of our work.

Speaker Change #116: The guidance I think will be the guidance in.

Zhihui Yang: I think there will be guidance, you know, in Q1 and the student enrollments in the in Q1. I think this is very good. So I think we're kind of optimistic about the top-line growth and the market extension in Q1. Thank you.

Speaker Change #116: In Q1 and the.

Speaker Change #119: The student enrollments in the in the in Q1 I think is very good. So I think we're optimistic about the topline growth and margin expansion.

Speaker Change #115: Thank you.

Charlotte Wei: Thank you, very clear. May I have another question regarding the shareholder return? Because we have a lot of cash on hand.

Speaker Change #117: Thank you very clear.

Speaker Change #118: I have another question regarding the.

Speaker Change #120: BB shareholder return because we have a.

Speaker Change #121: A lot of cash on hand, so you can see there like Upsized your share buyback plan is the current plan are retired.

Zhihui Yang: So do you consider an upside to your share buyback plan if the current plan retires? Thank you. Yeah, we do have the $400 million share buyback program in hand, and till yesterday, we finished $294 million. So that means we have somewhere around $100 million left.

Speaker Change #120: Thank you.

Speaker Change #115: Yes.

Speaker Change #124: We'll have the $400 million share buyback program you have and.

Speaker Change #122: Tier yesterday were finished.

Speaker Change #122: We're finished.

Speaker Change #115: Yeah.

Speaker Change #115: $294 million. So that means we have a web we have a $1 million.

Operator: So I think in the first step, we'll finish the $100 million share buyback. And, you know, once we finish the $400 million share buyback program, I think I will discuss with Michael and the board about even more types of allocation, you know, the share buyback or the, [inaudible] Thank you. As a reminder, if you wish to ask a question, please press stars 1 and 1. We will now take the next question on the line from Li Ping from CICC. Please go ahead.

Speaker Change #115: Somewhere a $1 million left so I think the first step we will finish the $100 million.

Speaker Change #115: Share buybacks and you know.

Speaker Change #115: Once we finish.

Speaker Change #115: $400 million.

Speaker Change #115: Share buyback program I think I will.

Speaker Change #125: The disc.

Speaker Change #125: Discuss with Michael and the board too.

Speaker Change #125: To think about the even more types of allocation.

Speaker Change #125: The share buyback work.

Speaker Change #125:

Speaker Change #115: <unk>.

Speaker Change #115: The dividend to be Masters.

Speaker Change #128: Yeah, I think you're right, we're putting up the cash and we have a lot of cash we have 4.4.

Speaker Change #115: $4 $9 billion cash you have so I think we will create more value to the shareholders and to and I think we should pay more capital allocation to the investors.

Speaker Change #115: Okay.

Fred: As a reminder, if you wish to ask a question Fred.

Fred: One on one.

Fred: We will now take the next question.

Speaker Change #129: The line of lifting from TICC. Please go ahead.

Li Ping: Thanks, Stephen and Sisi, for taking my questions. Just one quick question on your tourism business. So how much revenue contribution does your tourism business make in your Q1 outlook? And looking ahead for the whole fiscal year 2025, how much revenue contribution will that business make? And also the bottom line.

Fred: Thanks, Stephen for taking my question just one quick question on your tourism business.

Speaker Change #126: How much revenue contribution.

Speaker Change #132: Tourism business.

Speaker Change #133: Our Q1 outlook and looking ahead for the whole fiscal year 2025, how much revenue contribution what that business contributed and also the bottom line.

Jack: Jack Thank you.

Zhihui Yang: Thank you. Yeah, as for the tourism business, you know, in fiscal year 24, last year, the revenue was 380 million RMB, and in fiscal year 25, we expect the revenue for the whole year to be somewhere around 1.2 billion RMB. So this is our expectation, and in Q1, I think the revenue growth of the tourism business will be somewhere around 180% year-over-year. Just a big number. Thank you, Susan.

Jack: Yes, that's for the tourism business.

Leslie: In fiscal year, 'twenty for Leslie and there'll be revenue was 380 million RMB.

Jack: And.

Speaker Change #134: In physical year plenty of five rigs back.

Speaker Change #134: Revenue often the whole year will be somewhere around the $1 2 billion RMB. So this is our expectations and in the Q1 I think the.

Jack: Fee revenue growth of the tourism business will be somewhere around 180% year over year.

Speaker Change #131: A big number.

Li Ping: And also, on the bottom line, how much will that impact the business? Because we just started the tourism business this year, and last year, in fiscal year 25, I think we will suffer a loss because we started the business still at a pace of investment. But I think in fiscal year 26, the tourism business will be profitable. I think we believe the loss of the tourism business in fiscal year 2025 will be somewhere around 100 million RMB. This is how we're expected.

Speaker Change #137: I think you'll see that and also on the bottom line, how much would that impact.

Speaker Change #131: Because we just to start the business of the tourism business this year and lastly, Europe.

Speaker Change #131: Fiscal year 2005, I think we will suffer.

Speaker Change #131: A loss because with startup business.

Speaker Change #131: And the pace of the investment so, but I think in the fiscal year 'twenty six.

Speaker Change #131: This is the tourism business will be profitable.

Speaker Change #131: And so you know I think.

Speaker Change #138: Please we believe the loss of the tourism business in fiscal year, 'twenty, five we'll be somewhere around.

Speaker Change #131: One 1 million RMB.

Speaker Change #131: This is our expectations.

Zhihui Yang: All right, thank you. That's very helpful. Thank you. As a reminder, if you wish to ask a question, please press star 11 on your telephone. Once again, if you wish to ask a question, please press stars 1 and 1. We will now take the next question, from the line of D.S. Kim from J.P. Morgan. Please go ahead. Hello, sir. Hi, Sisi.

Speaker Change #136: Alright. Thank you that's very helpful.

Speaker Change #131: Okay.

Speaker Change #135: Thank you as a reminder, if you wish to ask a question. Please press star one one on your telephone.

Speaker Change #131: Yes.

Speaker Change #131: Once again, if you wish to ask a question. Please press star one on one.

Speaker Change #131: We will now take the next question.

Speaker Change #147: From the line of D. S came from J P. Morgan. Please go ahead.

Operator: Good evening. Thanks for taking my question. I just have one quick follow-up question, if I can. Would you have any comment on the recent regulatory environment given the market concerns and whatnot? And as we all know, there was a public consultation paper on the tutoring policy, I think, back in February or the end of January or early February. Have you heard any updates on that or any anecdotal color that you hear and see and listen from the regulators on the ground, if you could share? I think we haven't seen any new regulations, and as I said, I think the regulations haven't changed.

Speaker Change #152: Hello, Sir Hiseq secret evening. Thanks for taking my question I just have a one quick follow up if I can on would you have any comment on the recent regulatory environment given.

Speaker Change #144: The market concerns and whatnot and edgy as you all know there was a public consultation paper on the tutoring policy are you seeing back in February or end of January early fab have you heard any update on that or any anecdotal color that you'll hear and see.

Speaker Change #141: Listen from the regulators in our underground if you could share it would be appreciated. Thank you.

Speaker Change #143: I think we haven't seen any new regulations.

Speaker Change #131: And.

Speaker Change #139: As I said I think that the.

Speaker Change #145: The regulator has no change.

D.S. Kim: And, you know, as the industry leader, you know, will comply with the regulations, as always, in the last three years. And I think going forward, we expect the regulatory environment will be stabilized in the coming new year or even the year after. Thank you, sir. If I may follow up, I think you already discussed that there were one-offs and all. Can you, if you could, quantify, just for the modeling purpose, for the past fourth quarter, how much was roughly what you believe was a one-off impact from Dongxin and whatnot, if you could share? If not, totally fine, but just let me know.

Speaker Change #140: So you know the industry education industry leader with <unk>.

Speaker Change #131: Hi.

Speaker Change #131: With the regulations as always lots of three years.

Speaker Change #131: And I think going forward, we expect the regulation the <unk>.

Speaker Change #131: Regulation environment will be stabilized.

Speaker Change #131: In the in the coming new year, where even though youre author.

Speaker Change #146: Thank you Sir if I may follow up I think you are ready to discuss that there were one offs at all can you. If you could quantify just for the modeling purpose for the past fourth quarter, how much was roughly.

Speaker Change #150: Believe was a one off impact from UAE casino and whatnot, if you could share if not total defined but just let me try thank you.

Zhihui Yang: Yeah, but DF, you know, I'm afraid I'm unable to share the detailed numbers because, you know, I think East Dubai will announce their earnings in late August. So, I think that, in the earnest call of the East Dubai, I think the management of East Dubai will share more color about the numbers of these parties, and the questions you ask in the Middle East. Thank you, sir. Thank you very much.

Speaker Change #142: Yeah, but <unk>.

Speaker Change #151: I'm afraid I'm unable to share with the detailed numbers.

Speaker Change #153: Because I think the east to buy we'll announce there the earnings in late August so in the past.

Speaker Change #142: I think the you know.

Speaker Change #148: In the earnings call after Easter by I think the management of if the buyer will share more color about the numbers of this part of the questions to ask.

Speaker Change #148: In August.

Speaker Change #142: Yeah.

Speaker Change #155: Sir Thank you very much.

Operator: Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's Executive President and CFO, Stephen Jiang, for his closing remarks. Again, thank you for joining us today.

Speaker Change #156: Thank you.

Zhihui Yang: Now approaching the end of the conference call I will now turn the call over to new Orientals executed precedent on CFO Stephen Yang for his closing remarks.

Zhihui Yang: Again, thank you for joining us today.

Zhihui Yang: If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Zhihui Yang: If you have any further questions. Please do not hesitate to contact me or any of our Investor Relations Representatives. Thank you.

Speaker Change #154: This concludes today's conference call. Thank you for participating you may now disconnect.

Zhihui Yang: [music].

Zhihui Yang: Okay.

Zhihui Yang: [music].

Operator: You are the reason why I'm still here You are the reason why I'm still here You are the reason why I'm still here You are the reason why I'm still here You are the reason why I'm still here You are the reason why I'm still here You are the reason why I'm still here, Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc Sisi Zhao, Tianxiao Hou, Caini Wang, New Oriental Education & Technology Group Inc, Thank you. Hello, everyone, and welcome to New Oriental's fourth fiscal quarter 2024 earnings conference call.

Operator: Our financial results for the period were released earlier today and are available on the company's website, as well as our newsware services. Today, Stephen Yang, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995

Speaker Change #166: <unk> results may be materially different from the views expressed today.

Speaker Change #158: A number of potential risks and uncertainties are outlined in our public filings with the SEC New Oriental does not undertake any obligation to update any forward looking statements, except as required under applicable law. As a reminder, this conference is being recorded in addition, a webcast of this conference call will be available on the Oriental too much.

Speaker Change #160: Your relations website at Investor adopt new Oriental Dot Org I will now first turn the call over to Mr. Stephen Yang Please.

Speaker Change #158: Please go ahead.

Zhihui Yang: Thank you Susie Hello, everyone and thank you for joining us on the call.

Zhihui Yang: Before we begin.

Speaker Change #157: We will like to firstly extend our gratitude to those who have been supporting in the believing in new Oriental.

Zhihui Yang: I understand there might be some questions with regard to the latest separation of the buy in time with a new way.

Zhihui Yang: Before we go into New Oriental's performance, we would like to stress that this decision was carefully made after a considerable amount of transparent communication with Dong Yuhui, who has been a beloved colleague of ours and drove the instrumental growth of Easterbyte, as we send Yuhui our best regards for his new venture. The company remains fully dedicated to forging a stable path of healthy growth for the platform, devoting its very best to live up to our customer-centric promise to offer a diverse range of premium, healthy, delicious, yet cost-effective products to our customers. Anchored by the exceptional teams, far-reaching partnerships, over 400 SKUs, and distribution channels which we thankfully built over the years.

Zhihui Yang: Before we go into new Orientals performance, we would like to stress that this decision was carefully made upon a considerable amount of transparent communication with don't usually who has been a beloved colleague of ours and drove incremental growth of Easter.

Zhihui Yang: Bye.

Zhihui Yang: As with <unk>, our faster rigorous focus new venture.

Speaker Change #161: The company remains fully dedicated in forging a stable path of healthy growth for the platform devoting our very best to live up to our customer centric homeless to offer a diverse range of premium healthy delicious.

Zhihui Yang: Cost effective products to our customers.

Zhihui Yang: Curtis by the exceptional teams far reaching partnerships over 400, skus and distribution channels, which we've centrally build over the years strategic pivot to expand our multi pronged presence are in the works.

Zhihui Yang: Strategic pivots to expand our multi-pronged presence are in the works, and we will continue to leverage Eastern Bai to propel knowledge sharing, product dissemination, and culture promotion to our valued customers in the long term. For more details, please refer to Easterby's latest announcement.

Speaker Change #167: We will continue to leverage used to buy two profile propel knowledge sharing products dissemination and culture promotion 12.

Zhihui Yang: Our valued customers in the long term.

Speaker Change #164: For more details please refer to east to bias latest announcements and now let's deep dive into new orientals fiscal year 2020 for performance.

Zhihui Yang: And now, let's deep dive into New Oriental's fiscal year 2024 performance for New Oriental's financial results for this fiscal quarter. We are pleased to announce that the company has achieved healthy growth in our key businesses with a solid top-line growth of 32.1%. Strong demand has fueled stable recovery across our business lines, while our portfolio of innovative ventures has invigorated the company's revenue with healthy contributions. New Oriental's bottom line performance has achieved the yields, with the operating margin and non-gap operating margin reaching 0.9% and 3.2% for this quarter, respectively.

Speaker Change #162: For nuance Oriental final results of this physical quarter, we're pleased to announce that the company has achieved a healthy growth in our key businesses with a solid top line growth of 32, 1%.

Zhihui Yang: Strong demands have fulfilled a field's stable recovery across our business lines.

Zhihui Yang: Our portfolio of innovative ventures.

Zhihui Yang: Invigorated the company's revenue with healthy contributions.

Zhihui Yang: New Orientals Bottomline performance has achieved the yields with operating margin and non-GAAP operating margin, reaching 0.9% and three 2% for this quarter respectively.

Zhihui Yang: Except for Easter-buy investment in private label products and certain cost and expenses related to the platform of time with Yuhui, our spending on accelerated capacity expansion and newly integrated tourism-related business, as well as additional incentives to the management and staff, led to a short-term impact on our operating margin this quarter. However, coupled with the increasing market demand, we strongly believe we made the right move to make the right investment. We anticipate that the pressure on margins for the educational business will reduce in the next fiscal year as we continue to improve the utilization of facilities and operating efficiency.

Speaker Change #163: Fast forward, if the bias investments in private label products and the certain costs and expenses related to the platform over time with the way our spending accelerated capacity expansion and newly integrated tourism related business as well as the additional incentives to the management and stuff.

Speaker Change #163: Have led to a short term impact on our operating margin this quarter.

Speaker Change #163: Never coupled with the increasing market demand we strongly believe we made the right move to input their rights investments.

Speaker Change #163: We anticipate that the pressure on margins for the educational business will reduce in the next fiscal year as we continue to improve the utilization of facility and operating efficiency.

Zhihui Yang: We expect our operating margin of the company, excluding e-supply, will expand year-over-year in the first quarter of 2025 and deliver satisfactory operating profit for the full fiscal year 2025. Now, I would like to spend some time talking about this quarter's performance across our existing business lines and new initiatives with you in detail. Our key remaining business secured an encouraging trend, and new initiatives have shown positive momentum. Breaking Exam.

Speaker Change #163: We expect our operating margin of the company, excluding if the pie will expense year over year in the first quarter of 2025 and delivers satisfactory operating profits for the full fiscal year.

Zhihui Yang: 2025.

Zhihui Yang: The overseas test-tribe business recorded a revenue increase of 18% in dollar terms, or 23% in RMB terms year-over-year for this quarter. The Overseas Study Consulting Business recorded a revenue increase of about 17% in dollar terms, or 23% in RMB terms year-over-year for the first fiscal quarter of 2024. Adults and University Students' Business reported a revenue increase of 16% in dollar terms or a 21% increase in RMB terms year-over-year for this quarter. Meanwhile, our new initiatives, which mostly revolve around facilitating students' all-round development, have continued to sustain strong momentum in their respective ventures. Firstly, the non-academic tutoring courses, which we have offered in around 60 existing cities, focus on cultivating students' innovative ability and comprehensive quality.

Speaker Change #171: No I would like to spend some time to talk about this quarter's performance across our existing business lines and new initiatives to you in detail.

Zhihui Yang: Our key remaining business secured a encouraging trends.

Zhihui Yang: New initiatives has shown positive momentum.

Zhihui Yang: Breaking it down.

Zhihui Yang: The oversea test prep business recorded a revenue increase of 18% in dollar terms were 23% in RMB terms year over year for this quarter.

Zhihui Yang: The overseas study consulting business reported revenue increase of about 17% in dollar terms were 23% RMB terms year over year for the first physical quarter over to 144.

Zhihui Yang: Also the University students business reported a revenue increase of 16% in dollar terms or 21% increase in RMB terms year over year for this quarter.

Zhihui Yang: Our new initiative, which most of the revolve around facility and students all round developments have continued to sustain our strong momentum in their respective interests.

Zhihui Yang: Firstly.

Zhihui Yang: Diamond the tutoring courses, which we have offered.

Zhihui Yang: We're excited to see further penetration in those markets that we have tapped into, especially in high-tier cities, which total approximately 875,000 students' enrollments reported in this fiscal quarter. The top 10 cities in China contribute over 60% of this. Secondly, the intelligent learning system and device business has been adopted in around 60 cities.

Zhihui Yang: We are happy to see stable customer retention and scalability, with approximately 188,000 active paid users reported in this quarter. The revenue contribution of this initiative from the top 10 cities in China is over 55%. Our smart education business, education materials, and digitalized smart study solutions have continued to contribute material yields to the overall advancement of the company. In summary, our new educational business initiatives reported a revenue increase of 50% in dollar terms or 57% increase in RMB terms year-over-year for this quarter.

Zhihui Yang: In addition, the newly integrated tourism-related business line, one of our creative endeavors, is tailored with diverse offerings of cultural trips, study tours in China and overseas, as well as camp education. Within the business line, our study tour and research camp business for students of K-12 and university age continues to achieve sustainable growth this quarter, who have conducted the study towards the research camp in over 65 cities across the country, with the top 10 cities in China offering over 55% of the revenue share of this new business. We also piloted a number of top-notch tourism offerings to expand our reach to all age groups, including middle-aged and elderly individuals across 27 featured provinces.

Zhihui Yang: As the camp education would be in that business line. Our study tour and research Count. This is for students of K 12, and Youll be mercy H continuing to achieve sustainable growth this quarter.

Zhihui Yang: We have conducted the study towards the research attempt over 65 cities across the country with.

Zhihui Yang: With the top 10 cities in China, offering over 55% of the revenue share of this new business.

Zhihui Yang: We also piloted a number of top notch tourism offerings to extend our reach to all age groups, including a middle aged and elderly individuals.

Speaker Change #165: Cross twenty-seventh feature to provinces.

Zhihui Yang: As we are still at a preliminary stage of planning, testifying, and evaluating the visibility of the business in selected regions, we will keep you posted should there be timely updates. With regard to our OMO system, we have persevered in revamping our platform and leveraging our education infrastructure and technology edge, remaining key businesses and new initiatives, with a vision to provide advanced diversified education services to customers of all ages. During the reporting period, a total of $30.5 million was invested in our OMO teaching platform, which equips us with the flexibility to maintain unrivaled service to students.

Speaker Change #172: We are still at a preliminary stage of planning <unk> evaluating the visibility of the business in selected regions. We will keep you posted should there be timely updates.

Speaker Change #165: With regards to our <unk> system would have perceived in revamping our platform and leverage our education in infrastructure and technology edge.

Speaker Change #165: Many key business and new initiatives.

Speaker Change #165: The vision to provide advanced.

Speaker Change #165: Diversified either patient service to customers of all ages.

Speaker Change #169: During the reporting periods, a total of $35 million has been the message.

Speaker Change #169: Teaching platform, which equips us off the flexibility to maintain a rivaled service to students.

Zhihui Yang: With regard to the company's latest financial position, I'm confident to share with you that the company is in a healthy financial status, with cash and cash-equivalent term deposits and short-term investments totaling approximately $4.9 billion. Yantze Shen, [inaudible] to highlight the company's Board of Directors approved a share repurchase program in July 2022, under which the company is authorized to repurchase up to $400 million of the company's ADS, or common shares, through the next 12 months.

Speaker Change #169: With regards to the company's latest financial position.

Speaker Change #179: Confidence to share with you. That's the company is seeing a healthy financial status with cash and cash equivalents term deposits and short term investments totaling approximately $4.9 billion.

Speaker Change #173: Yes ambition.

Speaker Change #178: We would like.

Speaker Change #168: To highlight the company's board of directors approved a share repurchase program in July 2022, under which the company is authorized to repurchase up to $400 million of the company's avs, where common shares through the next 12 months.

Speaker Change #168: The company's board of directors further approved to extent the effective time of a share repurchase program to May 31 2025.

Speaker Change #168: As of July <unk> 2024.

Speaker Change #168: The company repurchased an aggregate of approximately $7 3 million for approximately $296 1 million from the open market.

Zhihui Yang: The company's Board of Directors further approved to extend the effective time of the share repurchase program to May 31, 2025, as of July 30, 2024. The company repurchased an aggregate of approximately 7.3 million ADSs for approximately $296.1 million from the open market. Now I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.

Speaker Change #176: No our turn the call over to <unk> to share with you about the key financials excuse me.

Speaker Change #170: Please go ahead.

Sisi Zhao: Before we go into our key financials, we'd like to inform you that, as part of the company's business line reorganization, the company's wholly owned subsidiary and variable interest entity entered into an agreement with East Dubai and its subsidiaries and variable interest entity to acquire IStaBuy's online education business for an aggregate consideration of 1.5 billion RMB. The consideration was agreed by both parties after arm's-length negotiations with reference to an independent valuation The acquisition was completed in this fiscal quarter.

Speaker Change #175: Before I go into our key financials wed like to inform you that as part of the Companys isn't my reorganization the company's wholly owned subsidiary and a.

Speaker Change #174: Variable interest entity entered into an agreement, which is to buy in a subsidiaries and variable interest entity to acquire is device online education business and aggregates.

Speaker Change #174: Incineration of $1 5 billion RMB, a consideration and were so great by both parties after arm's length.

Speaker Change #174: Negotiations with reference to an independent validation the acquisition was completed in this fiscal quarter upon completion.

Sisi Zhao: Upon completion, the online education business was consolidated from IStaBuy's consolidated financial statements and was deconsolidated from IStaBuy's consolidated financial statements and is now recorded by the company under educational services. Now, for our key financial details for this quarter. Operating costs and expenses for the quarter were US$1,126.2 million, representing a 38.6% increase year-over-year. Non-GAAP operating costs and expenses for the quarter, which is share-based compensation expenses, were US$1,100.4 million, representing a 40.7% increase year-over-year.

Speaker Change #174: My indication business, where it's consolidated.

Speaker Change #174: From his Tobias consolidated financial statements and where he consolidated from each device consolidated financial statement and is now recorded by the company under educational services.

Speaker Change #177: Now for our key financial details for this quarter.

Speaker Change #177: Operating cost and expenses for the quarter or 1100, $26 2 million annualized dollars, representing a 38, 6% increase year over year non-GAAP operating costs and expenses for the quarter, which is quota share based compensation expenses were $1100 $4 million representing.

Speaker Change #177: A 47% increase year over year, the increase was primarily due to the costs and expenses related to the substantial growth and is Tobias private label products life streaming e-commerce business and accelerated capacity expansion for education business.

Speaker Change #177: Cost of revenue increased by 38, 5% year over year to $542 $4 million, selling and marketing expenses increased by 49% at year over year to $208 2 million.

Speaker Change #177: G&A expenses for the quarter increased by 37, 5% year over year to $375 $5 million non-GAAP, G&A expenses, which excludes share based compensation expenses were $355 $2 million, representing a 42, 3% increase.

Sisi Zhao: Non-GAAP G&A expenses, which include share-based compensation expenses, were $355.2 million, representing a 42.3% increase year-over-year. However, total share-based compensation expenses, which were allocated to related operating cost expenses, decreased by 15.5% to $25.8 million in the fourth fiscal quarter of 2024. Operating income was $10.5 million, representing a 78.1% decrease year-over-year. Non-GAAP income from operations for the quarter was $36.3 million, representing a 53.8% decrease year-over-year.

Speaker Change #177: Year over year total share based compensation expenses, which were allocated to related operating costs and expenses decreased by 15, 5% to $25 $8 million.

Speaker Change #177: In the fourth fiscal quarter of 2024.

Speaker Change #177: Operating income or $10 $5 million, representing a seven 778.1.

Speaker Change #177: A 1% decrease year over year.

Speaker Change #177: non-GAAP income from operations for the quarter were $36 $3 million, representing a 53, 8% decrease year over year.

Sisi Zhao: Net income attributable to New Oriental for the quarter was $27 million, representing a 6.9% decrease year-over-year. Basic and diluted net income per ADS attributable to New Oriental were $0.16 and $0.16, respectively. Non-GAAP net income attributable to New Oriental for the quarter was $36.9 million, representing a 40.5% decrease year-over-year.

Speaker Change #177: Net income attributable to new Oriental for the quarter.

Speaker Change #177: It was $27 million, representing a six 9% decrease year over year basic and diluted net income per ads.

Speaker Change #177: Attributable to new Oriental or 16, and 16, respectively.

Speaker Change #177: non-GAAP net income attributable to new Oriental for the quarter were $36 $9 million, representing a 45% decrease year over year non-GAAP basic and diluted net income per ads attributable to new Oriental or 'twenty, two and 'twenty two cents respectively.

Sisi Zhao: Non-GAAP basic and diluted net income per ADS attributable to New Oriental was $0.22 and $0.22, respectively. Net cash flow generated from operations for the fourth fiscal quarter of 2024 was approximately $376.8 million, and capital expenditure for the quarter was $27.4 million. Turning to the balance sheet, as of May 31, 2024, New Oriental has cash and cash equivalents of $1,389.4 million. In addition, the company has $1,489.4 million in term deposits and $2,865.6 million in short-term investments.

Speaker Change #177: Net cash flow generated from operations for the fourth fiscal quarter of 2024 was approximately $376 $8 million and capital expenditure for the quarter or 27 $4 million.

Speaker Change #177: Yes.

Speaker Change #177: Turning to the balance sheet as of May 31, 2024, New Oriental had cash and cash equivalents of <unk> hundred $89 $4 million. In addition, the company had 1400 80 $944 million in term deposit and two.

Speaker Change #177: <unk> thousand $865 $6 million in term deposit.

Speaker Change #177: In short term investments.

Sisi Zhao: New Oriental's Deferred Revenue, which represents cash collected upfront from customers and related revenue that will be recognized as the service or goods are delivered, at the end of the fourth quarter of fiscal year 2024 was $780.1 million, an increase of 33.1% as compared to $1,337.6 million at the end of the fourth quarter of last fiscal year. Now I'll hand over to Stephen to go through our outlook and guidance. Thank you, Sisi

Speaker Change #177: New Oriental deferred revenue, which represents cash collected upfront from customers and related revenue that it will be recognized as the service or goods are delivered.

Speaker Change #177: The end of the fourth quarter of fiscal year, 2024, or 700 $781 million, an increase of 33, 1% as compared to 1300 and $37 $6 million at the end of the fourth quarter of last fiscal year.

Speaker Change #177: Now I'll hand over to Stephen to go through our outlook and guidance.

Zhihui Yang: As we look ahead for 2025, we are confident that our educational business will embark on a healthy trajectory of growth fueled by continuously strong demand. Supported by New Oriental's rooted resources that have stood the test of time, we have a firm belief in delivering margin expansion for the whole company, except for East Dubai, in the first quarter of 2025 and attaining satisfactory operating profit for the full fiscal year. Simultaneously, we expect to achieve tremendous growth for our new tourism-related business, in the belief that the significant resources we imagine for a nationwide rollout of these tours will contribute meaningful revenue in the new fiscal year.

Stephen: C C.

Stephen: Luca hubs for 2025, we're confident that our educational business, we'll embark on a healthy trajectory of growth fueled by the continuously strong demand.

Stephen: Supported by new all new Orientals rooted resources that have stewards of the type of time, we'll have a firm belief deliberate margin expansion for the whole company, except for used to buy in the first quarter of 12.

Speaker Change #177: 2025.

Speaker Change #177: Turning such factory operating profit for the full fiscal year.

Speaker Change #177: Simultaneously, we expect to achieve tremendous growth for our new tourism related business and believe that the significant resource we mess with for a nationwide rollout.

Speaker Change #177: These tours will contribute meaningful revenue in the new physical year.

Zhihui Yang: As we ensure a healthy balance between revenue and profitability growth, we will cautiously manage our capacity expansion and hiring to underpin the development of our educational business in the new year. We plan to increase our capacity by around 20% to 25% for the fiscal year 2025.

Speaker Change #185: I was waiting for a healthy balance between revenue and profitability growth, we will cautiously manage our capacity expansion in a hurry to underpin the development of our the personal business and the new year.

Speaker Change #185: We plan to increase our capacity by around 20% to 25% for the fiscal year. Two long 25, the most of the new openings will be launched in the cities with better top and bottom line performance.

Zhihui Yang: The most new openings will be launched in the cities with better top-line and bottom-line performance; rest assured, we will closely monitor the pace and scale of the new openings in accordance with the local operations and the financial performance during the year. We expect total net revenue, excluding revenue generated from Easter Buy, in the first quarter of fiscal year 2025, June 1, 2024 to August 31, 2024, to be in the range of $1,254.7 million to $1,283.5 million, representing a year-over-year increase in the range of 31% to 34%. In addition, based on our current estimation, we expect the operating margin for the whole company, except for East Dubai, in the first quarter will be expanded. EOB year.

Speaker Change #177: Of course, we will closely monitor the pace and scale of the new openings CT.

Speaker Change #177: Accordance to the local operations and the financial performance during the year.

Speaker Change #183: We expect total net revenue excluding revenue generated from you have to buy in the first quarter of.

Speaker Change #183: Fiscal year to 125 drew enforced to them 24 through all of August 30, 121, 24 to be in the range of $1254 $7 million to 1280 $3.5 million representing year over year inquiry.

Speaker Change #177: In the rental 31% to 34%.

Speaker Change #177: In addition, based on our current estimation, we expect the operating margin for the whole company, except for Easter by in the first quarter will be expensive.

Speaker Change #177: Year over year.

Zhihui Yang: To conclude, New Oriental has been known as a resilient adventure that sails, on its voyage, through the years of change for the transformation. Thanks to the support of our valued customers, promising a premium offering and giving back to society in the long term stand firm as our priorities from day one. As always, we will devote reasonable resources to research and the application of new technologies such as AI and chatTDT into our educational and product offerings, with a vision to uplift our strength in pursuit of growth and operating efficiency.

Speaker Change #177: To conclude.

Speaker Change #199: New Oriental has been known as sort of resilience advent for that sales.

Speaker Change #184: August voyage me of the years.

Speaker Change #181: Change of the transformation, thanks to the support of our metals customer.

Speaker Change #181: As the premium offering and giving back to society in the long term stay in the form of our priorities from day one.

Speaker Change #181: As always we will be both reasonable resources on research and application of new technologies, such as AI and tough to compete into our educational and product offerings.

Speaker Change #181: With the ambition to uplift, our strengths and procedural fee growth and operating efficiencies.

Zhihui Yang: We will continue to seek guidance from and cooperate with the government authorities in various provinces in China, comply with relevant policies, as well as to further adjust our business operations as required. We will also work diligently to enhance the nation's education level to strengthen its leading position so as to unveil further potential across all our business lines and realize our vision. I must say that these expectations and forecasts reflect our considerations of the latest regulatory measures as well as our current and preliminary view, which is subject to change.

Speaker Change #200: We will continue to seek guidance from and cooperate with the government authorities numerous provinces in China comply with relevant policies as well as to further adjust our business operations as required.

Speaker Change #181: We will also work diligently to Hudson Benicia side, the patient level to strengthen its leading position so as to unveil further potential across all our business lines and realize our vision.

Speaker Change #182: I must say that this by patients and forecast reflect our considerations of the latest regulatory measure as well as our current and preliminary view, which is subject to change.

Zhihui Yang: This is the end of our Fiscal Year 2024 Q4 summary. At this point, I would like to open the floor for questions. Operator, please open the call for questions.

Speaker Change #213: This is the end of our fiscal year 2020 for Q4 summary.

Speaker Change #182: This points I would like to open the floor for questions.

Speaker Change #187: Operator, please open the call for <unk>. Thank you.

Operator: Thank you. Thank you. The question and answer session of this conference call will start in a moment. In order to refer to all callers who wish to ask questions, we will take one question at a time from each caller. If you have more than one question, please request to join the question queue again after your first question has been answered. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.

Speaker Change #197: Thank you.

Speaker Change #192: A question and answer session of this conference call will start in a moment in order to be sorry to all callers who wish to ask questions. We'll take one question at a time from each caller. If you have more than one question. This request to join the question queue again. After your first question has been addressed to ask a question. Please.

Speaker Change #192: Press Star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Speaker Change #182: Yeah.

Operator: Please stand by; we will compile the Q&A roster. Our first question is from Alice Kai from Citi. Please proceed with your question. Good evening, Stephen and Sisi.

Speaker Change #195: Please standby, while we compile the Q&A roster.

Speaker Change #190: Our first question is from Ollie's kite from Citi. Please proceed with your question.

Ollie Skite: But do you have any scale. The name says hey, Thank you for your presentation I have a picture about the go strategy. Since you are not planning to expand into new cities. How much room is left in Dol existing locations before reaching saturation.

Speaker Change #191: Could you please share your color about this thank you so much.

Ollie Skite: Okay.

Speaker Change #188: Thank you.

Speaker Change #186: You know as for the.

Speaker Change #189: The learning center expansion plan.

Speaker Change #201: No I think we as I said, you know we plan to increase the capacity expansion.

Speaker Change #189: By 20% to 25% in the new physical year.

Zhihui Yang: Thank you so much. Yeah, thank you, Alice. You know, as for the Learning Center Expansion Plan, you know, I think, you know, we, as I said, we plan to increase the capacity expansion by 20 to 25% in the new physical year. And I think we will open most of the new learning centers or new classroom areas, mostly in the existing buildings. And I think most of the openings will be in the cities with a better performance, you know, both the top line growth and the margin expansion in fiscal year 24.

Speaker Change #189: So I think we will open the the most of the new learning centers, where the new classroom areas in the Moe.

Speaker Change #189: Mostly in the existing cities and I think most of the openings.

Speaker Change #189: We'll be in the cities with a better performance on both.

Speaker Change #189: Both the top line growth and the margin expansion in fiscal year 'twenty, four and I think we will keep monitoring the pace and the scale of the new openings, we care more about the balance of the topline growth and the margin expansion. So this is our strategy and.

Zhihui Yang: And I think in the coming new year, you know, upon the extension of the new learning center by 20 to 25%, we will keep the utilization rates up. And I think the strong revenue growth in the new year will cover the incremental classroom rental. Thank you, Alice. Thank you so much for your sharing.

Speaker Change #196: I think for you in the coming new year.

Speaker Change #216: Upon the extension of the new learning center by 20% to 25% what will keep the utilization rates up and I think the strong revenue growth in the full year will cover the incremental classroom Ah.

Speaker Change #196: Our rental.

Alice: Thank you Alice.

Alice: Thank you so much for sharing.

Alice: Thank you.

Operator: Thank you. We will now take a short break. The next question. From the line of Yiwen Zhang from China Renaissance.com, please go ahead. Hey, thanks. Good evening.

Alice: We will now take that.

Speaker Change #194: The next question.

Speaker Change #205: From the line of <unk>, Zhang from China Renaissance Dotcom. Please go ahead.

Yiwen Zhang: Thanks for taking my question. So I would like to follow up on the, you know, margin decline in this fiscal quarter. You mentioned several reasons in your prepared remarks. Could you discuss more about, you know, which ones are, like, well, which ones are recurring?

Zhang: Hey, Thanks, Good evening. Thanks for taking my question. So I would have liked to funnel up until you know monitoring decline in this particular quarter. So you're measuring several reasons in your prepared remarks to discuss more upon you know, which was like well off which while a recording and also when you look what type of education.

Zhihui Yang: And also, if we look at the education business alone, how do we see the margin actually trending in the last fiscal quarter? Thank you. Yeah, yeah. Thank you, Yiwen.

Speaker Change #203: No hot to wastepaper monitoring metric trend in physical quarter.

Zhang: Sure.

Zhihui Yang: Let's start with this quarter's margin analysis. Yeah, the open margin decrease in this quarter, I think it's mainly due to a couple of reasons. Number one, so you know, we accelerate the Learning Center extension this quarter and even in the last two. And also, you know, we newly invested in the new tourism business. And number two reason, you know; we gave additional incentives to the management and staff in Q4.

Speaker Change #221: Yeah, Yeah. Thank you, even let's start with the this quarter's Martha analysis. The op margin decrease in this quarter I think this is mainly due to a couple of reasons number one. So you know we oh, we accelerated the learning center expansion.

Zhang: In this quarter.

Speaker Change #193: Lots of Tuohy brothers.

Speaker Change #193: And also you know, we we newly message the <unk> the new chosen business. The number two reason when made the additional incentive to the management and staff are in Q4 and number three as you know used to by CMS and <unk>.

Zhihui Yang: And number three is, you know, to bias investment in private labor products and some certain, you know, one-time costs and expenses related to the sales time with Yuhui. So I think, you know, partly some of the expenses are one time these, the incremental costs and expenses in Q4.

Speaker Change #226: Our private label products, and some certain onetime costs and expenses related to the the sales the time with the U K. So I think part partially some of the expenses as one time off these are the of the incremental cost benefits in Q4.

Zhihui Yang: And as for the margin outlook, we expect the OP margin in the coming Q1 of the whole company, excluding East Dubai, to be expanded by 200 basis points year over year. So that means you will see more operating leverage and higher operating efficiency in the coming Q1. And we are quite optimistic about the margin expansion of the company; except for East Dubai, in fiscal year 2025, the margin will be expanded.

Speaker Change #198: As for the margin outlook, we expect the <unk> margin in the coming to one of the whole company, excluding Easter by it will be expanded by 200 200 basis points year over year. So that means you will see.

Speaker Change #193: Be more operating leverage and see the higher authority operating efficiency in the coming Q1.

Speaker Change #193: And we are quite optimistic about the margin expansion of the company.

Speaker Change #193: Except for Easter buy in fiscal year 'twenty five.

Speaker Change #193: The margin will be expanded I think will emphasize you know where we.

Speaker Change #222: Keep the a D a.

Speaker Change #193: Got more operating leverage and keep the learning center utilization rates. So this quarter's.

Speaker Change #193: Margin decreased just one time and next quarter, you will see margin expansion for the education business.

Zhihui Yang: I think we will, as I said, we will keep the, get more operating leverage and keep the learning center utilization rates up. So this quarter's margin decrease is just one time. And next quarter, you will see margin expansion for education. Thank you, Yiwen. Okay, thanks. That's very clear.

Matt: Thank you Matt.

Matt: Okay. Thanks, that's very clear.

Operator: Thank you. We will now take the next question. From the line of Felix Liu from UBS, please go ahead. First, I just want to say that I have a lot of respect for how New Oriental handled the situation with Dongyuehui and believe the decisions you made will be beneficial to the long-term branding of New Oriental. My question is a follow-up on the margin expansion.

Matt: Ooh.

Speaker Change #202: Thank you we will now take the next question.

Speaker Change #210: From the line of Felix Liu from UBS. Please go ahead.

Felix Liu: Thank you management for taking my question first I just wanted to say that I have a lot of respect to the Hollywood.

Speaker Change #208: Our until handled the situation was the only way and believe the decisions you made will be beneficial to the long term binding offer and youre until.

Speaker Change #212: My question. My question is a follow up on the margin expansion you.

Speaker Change #220: You mentioned that Q1, you expect the margin to expand by 200 bps, a may I check the pace of margin expansion or your expectation on the pace of expansion for the rest of the year do you think Q1 will be the peak of margin expansion or do you expect this momentum to continue or even improve in the fall.

Speaker Change #218: Flowing quarters after Q1.

Speaker Change #227: And also on the margin improvement drivers do you see that driver is mainly from operating leverage or do you see the underlying segment margin also has the potential for improvement. Thank you.

Zhihui Yang: Yeah, Felix, you know, as for the margin outlook, you know, yeah, we guided the margin expansion in Q1 for the educational business to be expanded by 200 basically. And I think, as you know, Q1 is the peak season for the education business. And so for the rest of the year, Q2 to Q4, I think we'll keep you updated on your guys' strategy for margin expansion, you know, in detail. And so, but as I said, we're quite confident about the whole year margin expansion for education.

Felix Liu: Yeah Felix.

Felix Liu: As for the margin outlook, you know yeah, we guided the margin expansion in Q1 for the other personal business will be extended by 200 basis points.

Speaker Change #215: And I think as you know Q1 is the peak season for the education, the personal business and so in the rest of the year or Q2 to Q4 I think we'll keep.

Speaker Change #206: Posted are your guys thoughts are good margin expansion are you know in detail and so but it is a societal where quite a competence of all the whole year margin expansion for.

Speaker Change #206: <unk> for the business and the.

Zhihui Yang: And the operating laboratory, yeah, you know, we opened more learning centers and hired more people in Q3 and Q4. But I think this market demand for educational business, also for the overseas-related business, especially for the K-12 business, I think the demand is very, very strong. And we have seen less competition in the market, even though we know the competitors are investing more money and human resources to take more market share.

Speaker Change #211: The operating leverage yeah. Yeah, you know, we opened more learning centers and hire more people in in Q3 and in Q4, but I think there's a market demand for educational business, both before the overseas business.

Speaker Change #237: Especially for the K 12 business I think that the manage my reverse flow and where we have seen the less competition in the market, even though we know.

Speaker Change #211: Others are or invest more money in it and human resources to.

Speaker Change #211: More market share.

Zhihui Yang: But we're quite optimistic that New Oriental will take more market share from the market. And I think we do have the operating leverage in hand. So, you know, we will leverage the business by, you know, the top-line goals. What I mean is the top-line goals will, I think we will beat the top-line guidance again in Q1 for the whole new year.

Speaker Change #207: We're quite.

Speaker Change #207: Optimistic Fox, New Oriental will take more market share from the market and I think we do have the operating leverage that you have so you know we will leverage the business by the top line growth.

Speaker Change #246: What I missed the topic was well I think what will be the top line guidance again in the in the.

Zhihui Yang: And so I would believe the margin extension in Q1 and the whole year of 2020. Thank you. We will now take the next question. From the line of Alice Ma from Bank of America, please go ahead. Hi, this is Lucy from Bank of America.

Speaker Change #230: What were the portfolio.

Speaker Change #223: New year, and so I would believe that margin expansion in Q1, and the whole year of 2025.

Speaker Change #207: Yeah.

Speaker Change #209: Thank you.

Speaker Change #253: We will now take the next question.

Speaker Change #217: From the line of at least not from Bank of America. Please go ahead.

Alice Ma: So I have a question on enrollment growth versus the capacity expansion pace. So if we're looking at this quarter, actually, our number of learning centers has been expanded by like 42 percent on a year-over-year basis, but non-academic tutoring enrollment only grew by 39 percent. I know it's not a big difference, but if we're looking at the past quarters, enrollment growth has always been higher than the capacity expansion pace. So how should we think about the difference between these two? Is it because of timing or some other reasons?

<unk>: Oh, Hi, Hi, this is <unk> from bank of America.

Speaker Change #228: So I have a question on the enrolment growth versus the capacity expansion pace.

Speaker Change #232: If we look at this quarter are actually a number of learning centers have been extended by like 42% on a year over year basis, but now.

Speaker Change #243: Academic tutoring enrolment only grow like 39% I know, it's not a big difference, but I'd be looking at the past quarters normal growth is always higher than the capacity expansion pace. So how should we think about that or the.

Speaker Change #233: The difference between these two is it because of timing or some other reasons. Thank you.

Zhihui Yang: Thank you. Partially it's because of the timing, like the student enrollment window, the open, and the timing difference. And so, yeah, I think, as I said, I think in this quarter, at the end of this fiscal year, we have added around 37% new capacity. Yes, that's a little bit bigger than we expected, but I think we will bear fruit in Q1. So, you know, for example, as for the new business for K-12, for the new business, you know, the top-end growth in this quarter in R&D terms is 57% year-over-year.

Speaker Change #219: Partially because of the timing like the student.

Coleman's Wendell: Coleman's Wendell.

Speaker Change #236: The open like the timing difference and so yeah, I think I saw that you know the I think the in this quarter.

Speaker Change #236: At the end of this.

Coleman's Wendell: This fiscal year, we have added around 37% of new capacity.

Speaker Change #265: Yeah, that's a little bit.

Coleman's Wendell: Bigger than we expected, but I think we will bear fruits of things. The Q1. So you'll know for example, I saw the new business for the K 12 for the new business.

Coleman's Wendell: This top line growth in this quarter in RMB terms.

Zhihui Yang: And even in the coming summer, in Q1, we believe the revenue of the new business will be somewhere around 50%, 45 to 50% year-over-year growth. So I think the revenue will cover the incremental cost of the new learning centers. And on the other hand, I think the rental per learning center per square meter will decrease because, you know, the markets change a lot.

Coleman's Wendell: 67% year over year and you name it.

Speaker Change #209: Coming soon.

Speaker Change #209: Number into Q1, we believe these are the revenue of the new business will be somewhere around 50%, 45%, 50% that youll be a wells so I think the.

Speaker Change #209: <unk> revenue will cover the input of the incremental cost of the new learning centers and on the other hand, I think the the rentals per learning center per square meters got depressed because the market's changed a lot. So I do believe we will.

Speaker Change #209: The operating leverage are rentals.

Speaker Change #209: Other costs and expenses going forward.

Speaker Change #229: We'll see.

Alice Ma: So I do believe we will get operating leverage on rental costs, even on the other costs and expenses going forward. Thank you, Stephen. Sorry, just if I may, one small question is that you mentioned in the May quarter that there was a small amount of like one-off compensation paid to Dong Yuhui. So, I think it's one-off, but will there be any compensation paid to Dong Yuhui in the first quarter?

Speaker Change #238: Thank you Stephen sorry, just if I may one more question is that you mentioned in the may quarter.

Speaker Change #258: Mount of like one off compensation paid to the only way so.

Speaker Change #240: I think it's one off but will that be any compensation paid to going your way in the first quarter.

Zhihui Yang: That'll be all. Thank you. Yeah, I think, you know, some of the costs and expenses related to the sale of Hui Tong Xing will happen in Q4 and the coming Q1. So we will keep you posted on the next earnest call to tell you the exact numbers of how much we spend in the coming Q1. But it's just one time.

Speaker Change #225: Oh, thank you.

Speaker Change #235: Yeah, I think you know some of the.

Speaker Change #248: Costs and expenses.

Speaker Change #251: Later to be ourselves.

Speaker Change #257: The you hit home shield will be happens in the Q4 and two in the coming two watt. So we'll keep you posted.

Speaker Change #225: In the next earnings call to Italian it'll be exact numbers of how much we spend in the coming July.

Speaker Change #225: But it's one time okay.

Speaker Change #245: Okay. Thank you so much.

Speaker Change #272: Thank you we will now take the next question.

Operator: Okay, thank you. Okay, thank you. We will now take the next question. From the line of Timothy Zhao from Goldman Sachs, please go ahead. Great. Hi, Stephen. Hi, Sisi.

Speaker Change #234: From the line of Tennessee, South from Goldman Sachs. Please go ahead.

Tennessee South: Great Hi, Stephen Hi, Thank you for taking my question. So my question is regarding your revenue outlook for the new fiscal year. Just wondering if you can give us certain guidance on the revenue growth for a different segment of the business, including the traditional K 12 doors at test prep consulting and okay. So on your initiative.

Timothy Zhao: Thank you for taking my question. So, my question is regarding your revenue outlook for the new fiscal year. Just wondering... As for the revenue outlook for fiscal year, for the new year, in different segments, you know, the overseas tax prep business, I think the revenue growth in the coming year will be somewhere around 20 to 25% of the year, and the consulting business, you know, the revenue growth will be somewhere around 15% year-over-year.

Speaker Change #271: I think that'll be very helpful. Thank you.

Speaker Change #231: Yes as for the.

Speaker Change #242: The revenue outlook for fiscal year for the new year.

Speaker Change #242: In different segments, the oversea test prep business.

Speaker Change #256: The the revenue growth in the coming in a year will be somewhere around 20% to 25% year over year and the consulting business.

Speaker Change #256: You know the revenue growth will be somewhere around 15% a year over year and the new business I think the top line growth of the new business will.

Timothy Zhao: And the new business, I think the top line growth of the new business will be expanded by 45% to 50%. And for the high school business, I think the revenue growth will be somewhere around 25% to 30%.

Speaker Change #256: We will be extended by will.

Speaker Change #231: It will be increased by 45.

Speaker Change #231: <unk> to 50%.

Speaker Change #231: The for Us where the high school business I think the revenue growth will be somewhere around 25% to 30% and.

Zhihui Yang: And, you know, as always, we will give the guidance in the most conservative way. Thank you. Thank you. We will now take the next question, from the line of Charlotte Wei from HSBC. Please go ahead. Good evening, Sisi and Stephen. My question is regarding the competitive landscape. So, we noticed that local small players have been more aggressive in terms of expansion.

Speaker Change #231: Always we will give the guidance by most of the consultancy.

Speaker Change #231: Yeah.

Speaker Change #241: Okay, great. Thank you.

Speaker Change #247: Thank you we will now take the next question.

Speaker Change #247: From the line of Charlotte Wei from HSBC. Please go ahead.

Charlotte Wei: Good evening.

Speaker Change #241: And then Steven Thank you for taking my question. My question is regarding competitive landscape. So we notice low cost small players have been more aggressive in terms of expansion. So do you see competition intensifying in this summer, especially in the top tier cities. So can you.

Speaker Change #281: Share more color on the stomach enrolment growth and does student retention rate. Thank you.

Charlotte Wei: So, do you see competition intensifying this summer, especially in the top tier cities? So, can you share more color on the summer enrollment growth and student retention rate? As for the competition environment, yeah, we have seen some competitors invest some money or open more learning centers in the top cities, but, you know, as a whole analysis of the competition, I think the competition situation now is less of a lot than a couple of years ago, before the policy.

Speaker Change #241: You.

Speaker Change #241: Okay.

Speaker Change #252: As for the competition environments, Yeah, we have seen some competitors invest some money.

Speaker Change #286: Open more learning centers in the top cities, but.

Speaker Change #239: I think I saw.

Speaker Change #239: The whole another healthy competition I think the competition situation now it's less of loss than a couple of years ago before the policy, so and so I believe the.

Zhihui Yang: So, and so I believe the competition is less, and I think New Oriental will take more market share and seize the opportunity to provide good services to these students. And student enrollment for the summer, we have already given guidance, and you know the top-end growth will be in the range of 31% to 34% in dollar terms year-over-year. And this is for the education business, and you know, take out the excluding East Dubai.

Speaker Change #239: The competition is less and and I think that new Oriental will take more market share and the C and seize the opportunity to provide the.

Speaker Change #239: Services to the students and.

Speaker Change #269: The student enrollment for the summer and we have already given the guidance and you don't see top line.

Speaker Change #239: Both will be in the range of 31% to three of <unk>.

Speaker Change #239: 4% in dollar terms year over year, and this was for education business and.

Speaker Change #239: Take all the the excluding the Easter by it.

Zhihui Yang: And yeah, considering the style of the guidance, I think there will be guidance, you know, in Q1. And student enrollment in Q1 is, I think it's very good. So, I think we're kind of optimistic about the top-line growth and market extension in Q1. Thank you. Thank you very much. May I have another question regarding the shareholder return because we have a lot of cash on hand? So do you consider, like, sizing your share buyback plan if the current plan retires?

Speaker Change #239: And yes.

Speaker Change #261: Consider considering consider to be the the style.

Speaker Change #266: The guidance I think will be the guidance.

Speaker Change #266: In Q1, and the student enrollments in the in the in Q1 I think is very good.

Speaker Change #280: So I think we're optimistic about the topline growth and margin expansion.

Speaker Change #254: Thank you.

Speaker Change #249: Thank you very clear.

Speaker Change #255: I have another question regarding the Bebe.

Phebe: Phebe shareholder return because we have.

Speaker Change #244: A lot of cash on hand, so you can see there like Upsized your share buyback plan is the current plan and retired.

Speaker Change #244: Thank you.

Charlotte Wei: Thank you. Yeah, we do have the $400 million share buyback program in hand, and till yesterday, we had finished $294 million. So that means we have somewhere around $100 million left.

Speaker Change #278: Yeah. We are we don't have the $400 million share buyback program you have and.

Speaker Change #264: Here yesterday with finished a well finish the you know.

Speaker Change #259: Uh huh.

Speaker Change #276: $194 million. So that means we have a web we have 1 million somewhere a $1 million left so I think but in the first stop we'll finish the $1 million a.

Zhihui Yang: So I think in the first step, we'll finish the $100 million share buyback. And, you know, once we finish the $400 million share buyback program, I think I will discuss with Michael and the board about even more types of allocation, you know, the share buyback or the, [inaudible] Thank you. As a reminder, if you wish to ask a question, please press stars 1 and 1. We will now take the next question on the line from Li Ping Zhao from CICC. Please go ahead.

Speaker Change #259: Share buybacks and you know.

Speaker Change #259: Once we finish.

Speaker Change #259: $400 million share buyback program I think I will.

Speaker Change #244: The discuss with Michael and the board to.

Speaker Change #244: To think about the even more types of allocation.

Speaker Change #244: The share buyback or.

Speaker Change #244: On the.

Speaker Change #244: The dividend to the Masters.

Speaker Change #266: Yeah, I think you're right, we're putting up the cash and we have a lot of cash we have four four.

Speaker Change #266: $4 $9 billion cash you have so I think we will create even more value to the shareholders and to and I think we should pay more capital allocation to the investors.

Speaker Change #266: Yeah.

Speaker Change #266: Okay.

Fred: As a reminder, if you wish to ask a question Fred.

Fred: One on one.

Speaker Change #274: We will now take the next question on the line of lifting from CIC. Please go ahead.

Li Ping: Thanks Stephen for taking my questions. Just one quick question on your tourism business. So how much revenue contribution does your tourism business make in your Q1 outlook? And looking ahead for the whole fiscal year 2025, how much revenue contribution will that business make? And also the bottom line.

Lifting: Thanks, Stephen for taking my question just one quick question on your tourism business. So how much revenue contribution of tourism business in your Q1 outlook and looking ahead for the whole fiscal year 2025.

Lifting: How much revenue contribution what that business contributed and also the bottom line Jack Thank you.

Zhihui Yang: Thank you. Yeah, as for the tourism business, you know, in fiscal year 2024, the last year, revenue was 380 million RMB, and in fiscal year 25, we expect the revenue for the whole year to be somewhere around 1.2 billion RMB. So this is our expectation, and in Q1, I think the revenue growth of the tourism business will be somewhere around 180% year-over-year. Just a big number.

Speaker Change #275: Yeah, that's for the tourism business in fiscal year, 2004, I unless a year.

Speaker Change #260: <unk> revenue was 380 million RMB.

Speaker Change #293: In physical year running five.

Speaker Change #279: We expect the revenue of the whole year will be somewhere around one 2 billion.

Speaker Change #260: RMB. So this is our expectations and in the Q1 I think C C.

Speaker Change #260: <unk> revenue growth of the tourism business will be somewhere around 180% year over year.

Speaker Change #295: A big number.

Zhihui Yang: Thank you, Stephen. And also, on the bottom line, how much will that impact the company? Because we just started the tourism business this year, and you know, last year, in fiscal year 25, I think we will suffer a loss because we started the business, you know, still at the pace of the investment. So, but I think in fiscal year 26, the business, the tourism business will be profitable. I think and we believe the loss of the tourism business in fiscal year 2025 will be somewhere around 100 million RMB.

Speaker Change #268: I think you'll see that and also on the bottom line, how much would that impact.

Speaker Change #268: Because we just to start the business of the tourism business. This year and then lastly your.

Speaker Change #260: In fiscal year 'twenty, five I think we will suffer.

Speaker Change #260: A loss because with startup business are still in the pace of the investment so, but I think in the fiscal year 'twenty six.

Speaker Change #260: The business the tourism business will be profitable.

Speaker Change #260: You know I think we believe we believe the loss of the tourism business in fiscal year 'twenty five we'll be somewhere around a one.

Speaker Change #260: One 1 million RMB.

Li Ping: This is how we're expected. All right, thank you. That's very helpful. Thank you. As a reminder, if you wish to ask a question, please press star 11 on your telephone. Once again, if you wish to ask a question, please press star 1 and 1. We will now take the next question, from the line of D.S. Kim from J.P. Morgan. Please go ahead. Hello, sir. Hi,

Speaker Change #260: This is our expectations.

Speaker Change #287: Alright. Thank you that's very helpful.

Speaker Change #260: Okay.

Speaker Change #302: Thank you as a reminder, if you wish to ask a question. Please press star one one on your telephone.

Speaker Change #260: Once again, if you wish to ask a question. Please press star one on one.

Speaker Change #260: We will now take the next question.

Speaker Change #277: From the line of D. S came from J P. Morgan. Please go ahead.

D.S. Kim: Good evening. Thanks for taking my question. I just have one quick follow-up question, if I can. Would you have any comment on the recent regulatory environment given the market concerns and whatnot? And as we all know, there was a public consultation paper on the tutoring policy, I think, back in February or the end of January or early February. Have you heard any updates on that or any anecdotal color that you hear and see and listen from the regulators on the ground, if you could share?

Speaker Change #297: Or HIFU secret evening. Thanks for taking my question I just have a one quick follow up if I can on would you have any comment on the recent regulatory environment given the.

Speaker Change #301: The market concerns and whatnot and edgy as you all know there was a public consultation paper on the tutoring policy I think back in February or end of January early fab.

Speaker Change #284: Have you heard any update on that or any anecdotal color that you'll hear and see.

Speaker Change #273: This is from the regulators in our underground if you could share it would be appreciated. Thank you.

D.S. Kim: I think we haven't seen any new regulations, and as I said, I think the regulations haven't changed. And, you know, as the industry leader, we have complied with the regulations, as always, in the last three years. And I think going forward, we expect the regulatory environment will be stabilized in the coming new year or even the year after. Thank you, sir. If I may follow up, I think you already discussed that there were no one-offs at all.

Speaker Change #282: I think we haven't seen any new regulations are.

Speaker Change #289: And U S.

Speaker Change #285: As I said I think that the regulator has no change.

Speaker Change #260: And you know us.

Speaker Change #291: The industry education industry leader will comply.

Speaker Change #291: With the regulations as always lots of three years.

Speaker Change #260: And I think going forward, we expect the regulation side, the regulation environment will be stabilized in.

Speaker Change #260: In the in the coming new year, where even though your author.

Speaker Change #283: Thank you Sir if I may follow up I think you are ready to discuss that there were one offs at all can you. If you could quantify just for the modeling purpose for the past fourth quarter. How much was roughly when do you believe was a one off impact from UAE casino and whatnot.

D.S. Kim: Can you, if you could, quantify, just for the modeling purpose, for the past fourth quarter, how much was roughly what you believe was a one-off impact from Dong Yuhui, Dong Xin, and whatnot? If you could share, that would be great. If not, totally fine, but just let me know.

Speaker Change #300: If you could share if not total defined but just let me try thank you.

Zhihui Yang: Yeah, but DS, you know, I'm afraid I'm unable to share the detailed numbers because, you know, I think East Dubai will announce their earnings in late August. So, and then, Bevan, I think that, you know, in the earnest call of the East Dubai, I think the management of East Dubai will share more color about the numbers of these parties and the questions you ask in the event. Thank you, sir. Thank you very much.

Speaker Change #296: But <unk>.

Speaker Change #290: I'm afraid I'm unable to share with the of the detailed numbers because.

Speaker Change #299: Because you know I think the east Dubai will announced there.

Speaker Change #298: Earnings in late August so unimpaired.

Speaker Change #292: I think the you know in the earnings call. After Easter by I think the management of if the buyer will share more color about the numbers of this part of the questions to ask.

Speaker Change #292: In August.

Speaker Change #288: Yeah. Thank you Sir thank you very much.

Zhihui Yang: Thank you. We are now approaching the end of the conference call. I will now turn the call over to New Oriental's Executive President and CFO, Stephen Jiang, for his closing remarks. Again, thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change #260: Thank you we are now approaching the end of the conference call I will now turn the call over to new Orientals executed precedent and CFO Stephen Yang for his closing remarks.

Zhihui Yang: Again, thank you for joining us today.

Zhihui Yang: If you have any further questions. Please do not hesitate to contact me or any of our Investor Relations Representatives. Thank you.

Speaker Change #294: This concludes today's conference call. Thank you for participating you may now disconnect.

Q4 2024 New Oriental Education & Technology Group Inc Earnings Call

Request a DemoDemo

EDU

New Oriental Education & Technology Group

Earnings