|Bid||111.46 x 3000|
|Ask||111.50 x 1200|
|Day's Range||110.71 - 114.28|
|52 Week Range||50.30 - 115.88|
|Beta (3Y Monthly)||1.39|
|PE Ratio (TTM)||74.26|
|Earnings Date||Oct 21, 2019 - Oct 25, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||118.36|
New Oriental Education taps growing demand for after-school tutoring in China. EDU stock is eyeing a fresh buy point as its ascent continues.
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.For decades, NetEase Inc. has been the perennial runner-up to the likes of Tencent Holdings Ltd. in China’s evolving internet landscape. Now it’s betting on a bookish computer scientist to catapult it to the top of the class in the nation’s $36 billion online education market.Zhou Feng, chief executive officer of NetEase Youdao, is charged with helping NetEase escape from under Tencent’s enormous shadow and find life beyond video games. The U.S.-trained software coder handpicked by billionaire founder William Ding Lei is creating an all-in-one learning platform to tap the lucrative space where education and technology overlap. To bankroll that expansion, the company could float Youdao, last valued at $1.1 billion, as soon as this year.Zhou is counting on a decades-old custom. Every summer, millions of Chinese high school students sit through a grueling two-day college entrance exam, or gaokao, that helps determine the course of their lives. That’s why China’s tiger moms and dads have long sent their kids from as early as kindergarten age to private tutoring classes for English, math and sciences.Intense competition has fueled an education boom, particularly targeting the K-12 group that includes students from kindergarten through high school, creating a coterie of multi-billion-dollar corporations. Leading players like New Oriental Education & Technology Group Inc. and TAL Education Group that still rely mainly on in-class teaching have gone public in the U.S. and seen their shares soar. Online startups such as the Tencent-backed VIPKid are still trying to convince parents that digital instruction can be as good, if not better than brick-and-mortar classrooms.Through combining content with the latest technology, Zhou sees a business chance for Youdao, whose name loosely translates to “there’s a way”. Courses can be taught through high-speed live-streaming, enabling smooth communication between teacher and student. Artificial intelligence-powered “tutors” can grade homework and use data to evaluate student test results, he said.“That’s what we have always been good at,” said Zhou, 40, a University of California at Berkeley alumnus with a penchant for blending English words into conversations. “Almost every industry in China has been transformed by the internet, but that’s not yet the case for education.”Revenue for China’s online education market is estimated to have reached around 252 billion yuan ($35.7 billion) in 2018, and is expected to more than double in 2022, with 264 million paying users, according to iResearch.But there’s yet to be a clear winner -- even for top tuition providers like New Oriental, its digital arm Koolearn in 2017 only accounted for less than 1% of the total revenue in the local online teaching market, according to Frost & Sullivan data cited in its prospectus. What sets Youdao apart is its exclusive focus on online and its expansion into education-related hardware. It has launched a slew of products from apps for note-taking and children’s stories to smart devices like a 799 yuan electronic dictionary pen, which allows students to scan printed text and translate it instantaneously.“NetEase’s technology support and the company’s online DNA and roots should make its products more sophisticated than traditional education providers,” said Bloomberg Intelligence analyst Vey-Sern Ling. Still, not having physical classrooms means it could be difficult for Youdao to expand beyond structured, standardized learning or test prep, he said.NetEase could do with a win. Founder and CEO Ding has a master plan for China’s second largest game developer to delve into three sectors including e-commerce, music streaming and online education, but the result is best described as mixed. Its music arm has grappled with rising content costs, as it has to sublicense a large chunk of songs from its much bigger rival, Tencent Music Entertainment Group. Although e-commerce has grown to become NetEase’s largest division after gaming in terms of revenue, it sold its popular import platform Kaola to Alibaba Group Holding Ltd. in a $2 billion deal.That magnifies the importance of Youdao and its leader, with whom Ding shares a long history. Back in 2004, when Zhou was pursuing his doctorate degree in computer science, NetEase’s CEO came across his paper on filtering junk emails, and, ironically, shot him a message that was mistaken as spam. It had no body text but just a subject line: “I’m Ding Lei, I have a technical question for you.”The two eventually got in touch via phone calls, and Zhou worked part-time for NetEase for three years. After earning his doctorate in 2007, he officially joined the company as lead architect for Youdao in Beijing, which at the time was trying to morph from a digital dictionary into a web search engine. To challenge the local leader Baidu Inc., Youdao’s approach was to operate a slew of vertical search services at one time, in everything from news to blogs to maps.Those efforts failed, and in 2012 Zhou decided to close the search operation. “That was when we hit our lowest point,” he said. Zhou shifted the 400-person team to develop learning apps instead.Youdao’s revenue rose 60% in 2018 from a year earlier, while sales for K-12 courses increased three-fold in the same period, he said. Online courses have surpassed advertising as Youdao’s largest income stream, Zhou said.Now of the nearly 2,000 employees Zhou oversees at Youdao, half are teachers and other staffers dedicated to building up its online class portfolio. “Learning is much more difficult than playing video games,” he said.To contact the reporter on this story: Zheping Huang in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
New Oriental Education & Technology Group Inc. (NYSE:EDU) led the NYSE gainers with a relatively large price hike in...
A bullish reversal held up in afternoon trading Wednesday, although stock indexes eased from session highs. Retail led the bounce, but some of the best software stocks lagged.
(Bloomberg Opinion) -- They were the best of stocks, they were the worst of stocks. They were investments of wisdom. They were investments of foolishness.If you’re a U.S. hedge fund manager, China’s education stocks have been a tale of two cities. A look at 180 U.S.-listed Chinese companies – from Alibaba Group Holding Inc. to BAT Group Inc. – shows that hedge funds have been gravitating toward this sector. (4)Over the past six months, these companies were among the best and worst performers. While mutual and pension funds seek slow and steady returns, hedge funds often try to profit from big bets on sectors or companies in upheaval. Now that China’s internet sector has grown so large, and revenue has started to slow, these investors are looking farther afield for a home run. That makes China’s education sector a tempting target. A three-year boom peaked last year after Beijing issued a series of new regulations, including restricting kindergarten operators from raising funds in equity markets. As my colleague Nisha Gopalan wrote at the time, these rules sent mixed signals about the government’s changing attitude toward private capital in education. Just two years earlier, Beijing was encouraging non-state investment in the sector, which prompted a wave of listings, she noted.Profitability in the education sector is also patchy: More than half of U.S.-listed Chinese education companies posted a loss in their most recent earnings. In terms of stock performance, ATA Inc., which offers online and on-campus education, gained 64% and New Oriental Education & Technology Group Inc., a provider of classes, test prep and camps, climbed 33%. By contrast, Tarena International Inc., which breached Nasdaq listing rules, fell 83% and Ambow Education Holding Ltd, whose net loss widened threefold in the March quarter, slid 63%. While such volatility makes buy-and-hold investors nervous, hedge fund managers see opportunities. The regulatory landscape, meanwhile, is bound to keep shifting. Just last week President Xi Jinping urged the development of vocational training in the country.All this means that hedge funds are likely to continue dominating the education sector. HaiLiang Education Group Inc., for example, has 52% hedge fund ownership, according to Bloomberg data based on publicly reported holdings.(1)The private-school operator returned 86% in the last six months – one of the top performers among all U.S.-listed Chinese stocks – after reporting a 66% increase in fiscal first-half profit. Hedge funds hold 73% of publicly reported shares of preschool operator RYB Education Inc., which was a decided loser (unless you were short), falling 24%. U.S.-listed Chinese stocks lost a market-cap weighted 12% over the period while education stocks gained 9.2%. A concentration of hedge fund ownership could magnify the extreme performances of these stocks. LAIX Inc., a purveyor of online English learning, dropped 22% Tuesday after posting another operating loss and noting that the performance of key products was “unexpectedly weak.”Chinese leaders understand the importance of education in building a prosperous society. Last month, the Communist Party and State Council jointly published new guidelines on education reform: more moral education and physical exercise, less focus on exams. You can imagine savvy school managers rushing to set up centers that cater to the whims of the party as a result. Such changes create opportunities for the private sector to march in time with government policy, and present risks to those who fail to keep up. Yet even without Beijing’s shifting views, this is a crowded sector with lots of companies losing money. For hedge fund managers, it will be the spring of hope and the winter of despair.(1) Of the 180 companies I examined, 15 were education stocks, including companies that run schools, online programs, or provide related technology.(2) Bloomberg collates data based on publicly reported holdings, which may not represent ratios of all shares outstanding.To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Rachel Rosenthal at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
New Oriental Education stock has nearly doubled in 2019. The IBD Stock Of The Day just formed a new base offering a buy point for new investors.
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
Amid the continuing U.S.-China trade war, Chinese education leader New Oriental is showing tremendous relative strength. A new buy point looms.
Top-rated education technology leader and IBD 50 stock Chegg is among the best growth stocks to watch as it tests a new buy zone.
Many investors are still learning about the various metrics that can be useful when analysing a stock. This article is...
TAL Education earnings and guidance disappointed Thursday after New Oriental Education & Technology broke out Tuesday despite mixed fiscal Q4 results.
After today's stock market close, Chipotle and Visa will report quarterly results. The Street expects Chipotle to grow earnings 31% and Visa 10%.
NEW YORK, NY / ACCESSWIRE / July 23, 2019 / New Oriental Education & Technology Group, Inc. (NYSE: EDU ) will be discussing their earnings results in their 2019 Fourth Quarter Earnings to be held on July ...
Quarterly Net Revenues Increased by 20.2% Year-Over-Year Quarterly Student Enrollments Increased by 33.9% Year-Over-Year Quarterly Operating Income Attributable to New Oriental Increased by 36.0% Year-Over-Year ...
We're breaking down our five key tips for playing earnings season to avoid getting burned by big gaps down in price — like what we just saw with Netflix earnings.
(Bloomberg) -- Netease Inc. is planning an initial public offering in the U.S. of its Youdao arm that could raise at least $300 million, people familiar with the matter said, propelling its expansion into a crowded online education arena.The company is working with Morgan Stanley and Citigroup Inc. on the share sale with a goal to list as early as in the third quarter, said the people, asking not to be identified as the information is private. A deal could value Youdao at about $2 billion, one of the people said. The firm could file confidentially as soon as in coming weeks, according to another person.Netease -- Tencent Holdings Ltd.’s closest competitor in the world’s biggest mobile gaming market -- is delving deeper into adjacent sectors from e-commerce to media content. Its Youdao arm, founded in 2006, explored several business models before settling on becoming an internet education platform about five years ago. It now offers everything from online dictionaries to math courses and prep classes for important certification-tests.The company completed its first round of financing in April last year at a post-money valuation of $1.12 billion, according to its website. Deliberations are at a preliminary stage and details of the share sale including fundraising size and timeline could still change, the people said. Representatives for Netease, Morgan Stanley and Citi declined to comment.Netease is trying to court investors during a volatile time for capital-raising, roiled by U.S.-Chinese trade tensions and worries about a global downturn. But it wants to grab a bigger slice of a market that’s projected to boom in coming years, and make headway against rivals from New Oriental Education & Technology Group to VIPKid and iTutorGroup. Online revenue from children at nurseries and students attending kindergartens up to high school, also known as the K-12 group, could rise 38% a year though 2022, Bloomberg Intelligence cites iResearch as saying.“Revenue contribution from online courses will likely increase for reputable tuition providers as more students from lower-tiered Chinese cities pay for access,” Bloomberg Intelligence analysts Catherine Lim and Sheng Tan Zhu wrote Monday. “New digital teaching technology may raise the learning efficiency of online students and increase their academic performance, fueling stronger demand.”\--With assistance from Zheping Huang.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at firstname.lastname@example.org;Crystal Tse in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org;Fion Li at email@example.comFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Portfolio Manager Danton Goei on how the trade war is contributing to a dislocation in some Chinese stocks, creating opportunities for value investors Continue reading...