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New Oriental’s education services and test-preparation courses bring in most of its revenue. Students pay for preparation for Chinese and overseas exams and for non-academic courses, delivered through schools, learning centers and online platforms including Koolearn.com. Course fees are generally paid in advance. The company also charges for overseas study consulting and for learning systems and devices that provide tailored exercises with teachers monitoring progress. Its education business depends chiefly on student enrollment, the fees students will pay and consistent teaching quality; test preparation also depends on institutions continuing to use admissions exams.
Regulation defines what New Oriental can offer. It stopped after-school academic tutoring for kindergarten through ninth-grade students in China at the end of 2021 to comply with China’s tutoring restrictions. How those rules apply to high-school academic tutoring remains uncertain. The company considers its digital learning resources separate from tutoring, but authorities could classify them as academic tutoring and restrict those operations.
A smaller but substantial business is East Buy, which sells food and other private-label products online and through livestreams, and earns commissions when viewers buy third-party merchants’ products. Most of East Buy’s sales value comes through Douyin, making continued access to that channel important. The business also depends on livestreamers retaining their audience and on sourcing and delivering products.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
New Oriental chiefly depends on Chinese education demand and tutoring regulation, while East Buy adds exposure to livestreaming commerce and private-label retail.
TAL competes with New Oriental for Chinese families’ spending on enrichment courses after both stopped mainland K–9 academic tutoring. Watch TAL’s science, creativity and coding courses for signs of competition facing New Oriental’s non-academic courses.
Gaotu competes with New Oriental for Chinese students paying for non-academic courses, domestic and overseas exam preparation, and study-abroad services. Its IELTS, TOEFL and overseas-application offerings are worth watching alongside New Oriental’s overseas test preparation and study-abroad consulting.
Youdao competes with New Oriental for Chinese learners’ spending on enrichment courses, digital learning content and smart learning devices. Its Dictionary Pens and Tutoring Pens offer a concrete comparison for competition facing New Oriental’s paid learning systems and devices.
Four Seasons Education competes with New Oriental for Chinese families buying non-academic programs that build creativity and broader abilities. Watch its science, creativity and coding learning services rather than its tourism business when assessing competition for New Oriental’s non-academic courses.
New Oriental Education and Technology Group, Inc. earningsThis company
New Oriental’s report will show whether student enrollments and course revenue are growing enough to cover the cost of teachers, schools and learning centers.
Compare growth in educational-services and test-preparation revenue with the costs reflected in teacher, school and learning-center operations. Faster revenue growth and higher operating income would show that course demand is translating into better operating economics; slower revenue growth, or costs rising as fast as or faster than revenue, would show that enrollment and expansion are not yet improving the education business’s profitability.
TAL Education Group earningsTAL
TAL’s report will show how Chinese families are spending on non-academic courses such as science, creativity and coding, offering a read on the competition New Oriental faces for those students.
Watch enrollment or revenue in TAL’s science, creativity and coding courses. Stronger demand would show that families are still paying for non-academic learning, while also signaling strong competition for New Oriental’s students; weaker demand would point to a harder market and pressure on demand for New Oriental’s courses. TAL’s results are a competitive read, not proof of New Oriental’s own enrollment.
