New Oriental Education & Technology Group Inc (EDU) 2022 Q4 法說會逐字稿

Good evening and thank you for standing by for New Orientals FY 2022 Fourth Quarter Results Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded. (Operator Instructions)

晚上好，感謝您參加新東方 2022 財年第四季度業績電話會議。 （操作員說明）今天的電話會議正在錄音。 （操作員說明）

I would now like to turn the meeting over to your host for today's conference, Ms. Sisi Zhao.

我現在想將會議轉交給今天會議的主持人趙思思女士。

Hello everyone and welcome to New Oriental's fourth fiscal quarter 2022 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on newswire services. Today you will hear from Stephen Yang, Executive President and Chief Financial Officer. After his prepared remarks, Stephen and I will be available to answer your questions.

大家好，歡迎來到新東方2022財年第四季度財報電話會議。我們在此期間的財務業績已於今天早些時候發布，可在公司網站和新聞專線服務上查閱。今天，您將聽到執行總裁兼首席財務官 Stephen Yang 的講話。在他準備好的發言之後，斯蒂芬和我將可以回答你的問題。

Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US 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. 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.

在我們繼續之前，請注意今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款作出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，我們的結果可能與今天表達的觀點存在重大差異。我們向美國證券交易委員會提交的公開文件中概述了一些潛在的風險和不確定性。除適用法律要求外，新東方不承擔更新任何前瞻性陳述的義務。

As a reminder, this conference 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.

提醒一下，本次會議正在錄製中。此外，本次電話會議的網絡直播將在新東方的投資者關係網站investor.neworiental.org 上提供。

I will now turn the call over to Mr. Yang. Stephen, please go ahead.

我現在把電話轉給楊先生。斯蒂芬，請繼續。

Thank you Sisi. Hello everyone. And thank you for joining us on the call. Before going into details of our financial performance. I would like to take this opportunity to extend our gratitude to those who have been supporting and still believing in New Oriental, while our business in the previous quarters were largely affected by the government policies introduced the last year.

謝謝茜茜。大家好。感謝您加入我們的電話會議。在詳細了解我們的財務業績之前。我想藉此機會感謝一直支持和相信新東方的人們，而我們前幾個季度的業務主要受到去年政府出台的政策的影響。

I'm glad to announce that we are now paving a new path, innovative business opportunity as the company embarks on our fresh journey that strives to encourage all round development of students and for the betterment of the society. And at the same time focus on generating profit and returns for our shareholders.

我很高興地宣布，隨著公司踏上我們致力於鼓勵學生全面發展和造福社會的新旅程，我們現在正在開闢一條新的道路和創新的商機。同時專注於為我們的股東創造利潤和回報。

Now I would like to spend some time to talk about the quarter performance across our remaining business lines and introducing our new initiatives to you in detail. Our key remaining business have shown remarkable resilience and achieve the promising trends. Breaking down the overseas test prep business recorded that revenue increase of 6% in dollar terms for the fiscal year 2022.

現在我想花點時間談談我們剩餘業務線的季度業績，並向您詳細介紹我們的新舉措。我們的主要剩餘業務顯示出顯著的彈性並實現了有希望的趨勢。細分海外考試準備業務記錄顯示，2022 財年以美元計算的收入增長了 6%。

The overseas study consulting business recorded a revenue increase of about 16% in dollar terms year-over-year for the fiscal year 2022. The adults and university students business recorded rapid growth of approximately 30% year-over-year for the fiscal year 2022. As for our new business initiatives, as mentioned in past quarter, we have launched the several new initiatives throughout the year, which mostly revolve around facilitating students all-round development.

2022財年海外留學諮詢業務收入同比增長約16%。2022財年成人和大學生業務同比增長約30% . 關於我們的新業務舉措，如上一季度所述，我們全年推出了幾項新舉措，主要圍繞促進學生全面發展。

I'm glad to share with you that these new initiatives have shown positive momentum. Firstly, the non-academic tutoring business which we have rolled it out in over 50 existing cities focused on cultivating students' innovative ability and a comprehensive ability. We're happy to see increased market penetration in those markets we have tapped into, the top 10 cities in China have contributed more than 60% of the revenue of this business. Secondly, the intelligence learning system and device business is a service designed to provide a tailor digital learning experience for students, utilize our past teaching experience data and technology to provide personalized and targeted learning exercise content, together with our teachers monitoring and assessing the learning curve of the students at the back-end system.

我很高興與大家分享這些新舉措已顯示出積極的勢頭。一是在現有50多個城市開展的非學歷輔導業務，重點培養學生的創新能力和綜合能力。我們很高興看到我們所涉足的這些市場的市場滲透率有所提高，中國排名前 10 的城市貢獻了該業務收入的 60% 以上。其次，智能學習系統和設備業務是一項旨在為學生提供量身定制的數字學習體驗的服務，利用我們過去的教學經驗數據和技術，提供個性化和有針對性的學習練習內容，以及我們的教師監控和評估學習曲線後端系統的學生。

The new initiative education service not only greatly improves the student's learning efficiency, but also cultivates students proactive learning habits, we have tested adoption in around the 60 cities and are delighted to see improve the customer retention rates and scalability of this new initiative. The revenue contribution of this initiatives from the top 10 cities in China is over 60%.

新的倡議教育服務不僅大大提高了學生的學習效率，而且培養了學生主動學習的習慣，我們已經在大約 60 個城市進行了測試，很高興看到這項新倡議的客戶保留率和可擴展性有所提高。中國前 10 大城市的這一舉措的收入貢獻超過 60%。

Meanwhile, the study tour and the research camp business is an initiative that aims at offering students of K-12 and a university ages of the opportunity to fully leverage their free time and holidays to broaden the scope of knowledge and cultivate subject of interest. We have conducted the study tours and research camp in over 50 cities across the country. The revenue contribution of this initiative from the top 10 cities in China is over 55%.

同時，遊學和研究營業務是一項旨在為K-12和大學年齡的學生提供充分利用空閒時間和假期來拓寬知識範圍和培養興趣學科的機會的舉措。我們在全國50多個城市開展了遊學和研究營。中國前 10 大城市的這一舉措的收入貢獻超過 55%。

At the same time, we have also been launching smart education business, which comprises smart teaching, smart hardware, science and technology innovation, education and our service targeting local governments, educational authorities, primary or secondary schools and kindergartens, educational material and digitalized smart study solutions, the self-learning system leveraging advanced technology that will enable students to have complete control over the pace and the flexibility of the learning in age where remote learning becomes increasingly mainstream, as well as exam prep course designed for students with junior college diplomas to obtain bachelor's degree.

同時，我們還推出了智慧教育業務，包括智慧教學、智能硬件、科技創新、教育，以及面向地方政府、教育主管部門、中小學和幼兒園、教材和數字化智能的服務。學習解決方案，利用先進技術的自學系統，使學生能夠在遠程學習日益成為主流的時代完全控制學習的節奏和靈活性，以及專為具有大專文憑的學生設計的備考課程獲得學士學位。

The abovementioned business have been gaining traction and contributing to the overall growth of the company. During the last few fiscal quarters, we have been fully committed to comply with government policy. And as a result, the total number of schools and learning centers was reduced to 744 by the end of this fiscal year. This significant change in our structure has underscored the importance of our industry-leading OMO system, which has been one of the constants during the company's restructuring phase as we remain committed to investing in the R&D of the technology.

上述業務一直受到關注，並為公司的整體增長做出了貢獻。在過去的幾個財政季度中，我們一直致力於遵守政府政策。結果，到本財政年度末，學校和學習中心的總數減少到 744 所。我們結構的這一重大變化突顯了我們行業領先的 OMO 系統的重要性，這一直是公司重組階段的不變因素之一，因為我們仍然致力於投資於技術的研發。

This is operator, please continue to hold the line. We will reestablish the speaker's connection shortly. Thank you. Please continue to hold the line.

我是接線員，請繼續留線。我們將很快重新建立揚聲器的連接。謝謝你。請繼續保持排隊。

Thank you for standing by, the speakers have reestablished the connection. We have the speakers on the line again.

感謝您的支持，揚聲器已重新建立連接。我們的揚聲器再次上線。

So yeah, we got lost on the line. So I repeat it again. Okay. Sorry. I started from the -- okay. So, before going into the detail of our financial performance, I would like to take this opportunity to extend our gratitude to those who have been supporting and believing in New Oriental, while our business in the previous quarters were largely affected by the government policies introduced last year.

所以，是的，我們在網上迷路了。所以我再重複一遍。好的。對不起。我從——好吧。因此，在詳細介紹我們的財務表現之前，我想藉此機會感謝一直支持和相信新東方的人們，而我們前幾個季度的業務主要受到政府出台的政策的影響去年。

I'm glad to announce that we're now paving a new path in innovative business opportunities, as the company embarks on a fresh journey that strive to encourage all round development of students and for the betterment of the society. And at the same time, focuses on generating profits and returns for our shareholders.

我很高興地宣布，我們現在正在為創新的商業機會鋪平新的道路，因為公司開始了一個新的旅程，努力鼓勵學生的全面發展和社會的進步。同時，專注於為我們的股東創造利潤和回報。

Now, I would like to spend some time to talk about this quarter performance across our remaining business line and introduce our new initiatives to you in detail. Our key remaining business have shown remarkable resilience and achieve the promising trends. Breaking it down. The oversea test prep business recorded the revenue increase of 6% in dollar terms for the fiscal year 2022. The overseas study consulting business recorded a revenue increase of about 16% in dollar terms year-over-year for the fiscal year 2022.

現在，我想花點時間談談我們剩餘業務線的本季度業績，並向您詳細介紹我們的新舉措。我們的主要剩餘業務顯示出顯著的彈性並實現了有希望的趨勢。打破它。海外備考業務在 2022 財年的收入按美元計算增長了 6%。海外學習諮詢業務在 2022 財年按美元計算的收入同比增長了約 16%。

The adults and university students business recorded the rapid growth of approximately 30% year-over-year for the fiscal year 2022. As for our new business initiatives, as mentioned in the past quarter, we have launched several new initiatives throughout the year, which mostly revolve around facilitating students all round development. I am glad to share with you that these new initiatives have shown positive momentum.

成人和大學生業務在 2022 財年同比快速增長約 30%。至於我們的新業務舉措，如上一季度所述，我們全年推出了多項新舉措，其中主要圍繞促進學生全面發展。我很高興與大家分享，這些新舉措已顯示出積極勢頭。

Firstly, the non-academic tutoring business, which we have rolled out in over 50 existing cities, focused on cultivating students' innovative ability and comprehensive ability. We're happy to see increased market penetration in those markets we have tapped into. The top 10 cities in China have contributed more than 60% of the revenue of this business. Secondly, the intelligence learning system and device business is a service designed to provide a tailored digital learning experience for students. It utilizes our past teaching experience, data and technology to provide personalized and targeted learning exercise content together with our teachers monitoring and accessing the learning curve of our students at the back-end system.

一是在現有50多個城市開展的非學歷輔導業務，重點培養學生的創新能力和綜合能力。我們很高興看到我們所涉足的這些市場的市場滲透率有所提高。中國前 10 大城市貢獻了該業務收入的 60% 以上。其次，智能學習系統和設備業務是一項旨在為學生提供量身定制的數字學習體驗的服務。它利用我們過去的教學經驗、數據和技術提供個性化和有針對性的學習練習內容，同時我們的教師在後端系統監控和訪問學生的學習曲線。

The new innovative education service not only greatly improves the students' learning efficiency but also cultivate students' proactive learning habits. We have tested adoption in around the 60 cities and are delighted to see improve the customer retention rates and scalability of this new initiative. The revenue contribution of this from the top 10 cities in China is over 60%.

全新的創新教育服務不僅大大提高了學生的學習效率，而且培養了學生積極主動的學習習慣。我們已經在大約 60 個城市進行了測試，很高興看到這項新計劃的客戶保留率和可擴展性有所提高。中國前 10 大城市的收入貢獻率超過 60%。

Meanwhile, the study tour and the research camp business is an initiative that aims at offering students of K-12 and university ages of the opportunity to fully leverage their free time and holidays to broaden the scope of knowledge and to cultivate the subject interest. We have conducted the study tours and research camp in over 50 cities across the country. The revenue contribution of this from the top 10 cities in China is over 55%.

同時，遊學和研究營業務是一項旨在為K-12和大學年齡的學生提供充分利用空閒時間和假期來拓寬知識範圍和培養學科興趣的機會的舉措。我們在全國50多個城市開展了遊學和研究營。中國前 10 大城市的收入貢獻率超過 55%。

At the same time, we have also been launching smart education business, which comprises smart teaching, smart hardware science and technology innovation education and other services, targeting local governments, education authority, primary and secondary schools and kindergardens, educational material and digitalized smart study solutions, a self-learning system leveraging advanced technology that will enable students to have complete control over the pace and the flexibility of the learning in age where remote learning becomes increasingly mainstream as well as exam prep courses designed for students with junior college diplomas to obtain bachelor's degree. The above mention business have been gaining traction and contributing to the overall growth of the company.

同時，我們還推出了智慧教育業務，包括智慧教學、智能硬件科技創新教育等服務，面向地方政府、教育部門、中小學和幼兒園、教材和數字化智慧學習。解決方案，一個利用先進技術的自學系統，使學生能夠在遠程學習日益成為主流的時代完全控制學習的速度和靈活性，以及為具有大專文憑的學生設計的考試準備課程，以獲得學士學位。上述業務一直在獲得牽引力，並為公司的整體增長做出了貢獻。

During the last fiscal quarter, we have been fully committed to comply with the government policies. And as a result, the total number of the schools and learning centers was reduced to 744 by the end of this fiscal year. This significant changes in our structure has underscored the importance of our industry-leading OMO system, which has been one of the constants during the company's restructuring phase. As we remain committed to investing in the R&D of the technology.

在上一財季，我們一直全力遵守政府政策。結果，到本財政年度末，學校和學習中心的總數減少到 744 所。我們結構的這一重大變化凸顯了我們行業領先的 OMO 系統的重要性，這一直是公司重組階段的不變因素之一。因為我們仍然致力於投資該技術的研發。

The OMO has been instrumental during the restructuring process, as well as COVID-19 outbreaks in certain part of China, where a strong flexibility is required in migrating students between online and offline classes to minimize the learning disruption. We continue our efforts in developing and revamping our OMO teaching platform and kept leveraging our education infrastructure and technology strength across the remaining key business and new business to provide more advanced and diverse educational service to the customers for all ages.

OMO 在重組過程以及 COVID-19 在中國某些地區的爆發中發揮了重要作用，在中國某些地區需要很強的靈活性來在線和離線課堂之間遷移學生，以盡量減少學習中斷。我們繼續努力開發和改造我們的 OMO 教學平台，並在剩餘的重點業務和新業務中繼續利用我們的教育基礎設施和技術實力，為各個年齡段的客戶提供更先進和多樣化的教育服務。

We have invested $36 million in this quarter and $166 million in full fiscal year to improve and maintain our OMO teaching platform, which ensures that we may continue to offer high quality service and the flexibility toward students during the pandemic. In response to the evolving industrial situation in China and in compliance with the latest regulations in the education space, we have been implementing structural changes to our pure online platform Koolearn.

我們在本季度投資了 3600 萬美元，在整個財年投資了 1.66 億美元來改進和維護我們的 OMO 教學平台，這確保了我們可以在大流行期間繼續為學生提供高質量的服務和靈活性。為應對中國不斷變化的行業形勢，並遵守教育領域的最新法規，我們一直在對我們的純在線平台 Koolearn 進行結構調整。

We're actively exploring new initiative and broadening its customer base and offerings by leveraging its existing technology that has been the core of this business. One good example of the potential business direction that has shown promising results to date is DongFangZhenXuan - an e-commerce platform for selling agriculture and other products.

我們正在積極探索新舉措，並通過利用作為該業務核心的現有技術來擴大其客戶群和產品。迄今為止已顯示出可喜成果的潛在業務方向的一個很好的例子是東方真軒——一個銷售農產品和其他產品的電子商務平台。

Towards the end of December 2021, Koolearn began piloting live streaming events on various short video platforms, such as Douyin, which allows Koolearn to promote high quality agricultural and other products from China to the younger group of audience through the social medium. It also enabled Koolearn to tap into the broader customer base, the new e-commerce live streaming generation, whilst bringing our nation's agricultural producers, farmers and their products to the foreground, where we believe they belong. This has resulted in today's a notable user adoption and attraction to this platform with DongFangZhenXuan heading the way in an encouraging and optimistic direction.

2021年12月下旬，Koolearn開始在抖音等各種短視頻平台試行直播活動，讓Koolearn通過社交媒體向年輕群體推廣來自中國的優質農產品和其他產品。它還使 Koolearn 能夠利用更廣泛的客戶群，即新一代的電子商務直播流媒體，同時將我們國家的農業生產者、農民及其產品帶到我們認為他們所屬的前台。這導致了今天這個平台的顯著用戶採用和吸引力，東方真軒正朝著令人鼓舞和樂觀的方向前進。

After the introduction of the government policy on after-school tutoring last year, which has no doubt posed direct impact on our business. We have received many enquiries and concerns from investors over the company's financial position. As a company with a long-standing heritage, we have always made sure that we are prepared for and capable in weathering changes in the market, and that is reflected in our ability to maintain a strong cash position throughout the whole restructuring process.

繼去年政府出台課外輔導政策後，無疑對我們的業務產生了直接影響。我們收到了許多投資者對公司財務狀況的詢問和擔憂。作為一家擁有悠久傳統的公司，我們始終確保我們為市場變化做好準備並有能力應對，這反映在我們在整個重組過程中保持強勁現金狀況的能力上。

By the end of this quarter, our cash and cash equivalents, term deposits and short-term investments totaled approximately $4.2 billion. The company continued to seek opportunities to create more value to shareholders. On July 26, 2022, New Oriental's Board of Directors authorized the repurchase of up to $400 million of the company's common shares during the period from July 28, 2022 through May 31, 2023.

截至本季度末，我們的現金和現金等價物、定期存款和短期投資總額約為 42 億美元。公司不斷尋求機會，為股東創造更多價值。 2022 年 7 月 26 日，新東方董事會授權在 2022 年 7 月 28 日至 2023 年 5 月 31 日期間回購最多 4 億美元的公司普通股。

This share repurchase program authorizes the company to purchase its ADS or common shares from time-to-time on open market in accordance with applicable rules and regulations. The timing and extent of any purchase will depend upon market conditions, the trading price of ADS and its common shares as well as the other factors.

該股票回購計劃授權公司根據適用的規則和法規不時在公開市場上購買其 ADS 或普通股。任何購買的時間和範圍將取決於市場條件、ADS 及其普通股的交易價格以及其他因素。

Now I will turn the call over to Sisi to share with you about the key financials. Sisi, please go ahead.

現在，我將把電話轉給 Sisi，與您分享關鍵財務狀況。思思，請繼續。

Okay. Now I'd like to walk you through the other key financial details for the fourth quarter. Operating costs and expenses for the quarter were $629.7 million, representing a 52.1% decrease year-over-year. Non-GAAP operating costs and expenses for the quarter, which excludes share-based compensation expenses, were USD 600.9 million, representing a 53.6% decrease year-over-year.

好的。現在，我想向您介紹第四季度的其他關鍵財務細節。本季度的運營成本和費用為 6.297 億美元，同比下降 52.1%。本季度非美國通用會計準則運營成本和費用（不包括股權激勵費用）為 6.009 億美元，同比下降 53.6%。

The decrease was mainly because of the reduction of the facilities and numbers of staff as the result of the restructuring in this fiscal year. Cost of revenue decreased by 57.2% year-over-year to $247.8 million. Selling and marketing expenses decreased by 50.7% year-over-year to USD 95.8 million. G&A expenses for the quarter decreased by 43.9% year-over-year to $286.1 million. Non-GAAP G&A expenses, which exclude share-based compensation, were $257.2 million represents a 47.4% decrease year-over-year.

減少的主要原因是本財年重組導致設施和人員減少。收入成本同比下降 57.2% 至 2.478 億美元。銷售和營銷費用同比下降 50.7% 至 9580 萬美元。本季度的 G&A 費用同比下降 43.9% 至 2.861 億美元。不包括股票薪酬的非美國通用會計準則 G&A 費用為 2.572 億美元，同比下降 47.4%。

Total share-based compensation expenses, which were allocated to related operating cost and expenses, increased by 42.9% to $28.8 million in the fourth quarter. The increase is due to the grants of restricted shares of the company to employees and directors in May 2021 with graded vesting over the 3 years. Operating loss was $105.6 million compared to the loss of $102.4 million in the same period of the last fiscal year. Non-GAAP operating loss for the quarter were $76.9 million compared to a loss of $82.2 million in the same period of the prior fiscal year.

第四季度，分配給相關運營成本和費用的股權激勵費用總額增長 42.9% 至 2880 萬美元。增加是由於公司於 2021 年 5 月向員工和董事授予限制性股票，並在 3 年內分級歸屬。經營虧損為 1.056 億美元，而上一財年同期虧損 1.024 億美元。本季度非美國通用會計準則營業虧損為 7690 萬美元，而上一財年同期虧損 8220 萬美元。

Net loss attributable to New Oriental for the quarter was $189.3 million compared to the loss of $45.5 million in the same period of last year. Basic and diluted net loss per ADS attributable to New Oriental were $1.12 and $1.12, respectively. Non-GAAP net loss attributable to New Oriental for the quarter was $160.3 million compared to the loss of $27.9 million in the same period last year. Non-GAAP basic and diluted net loss per ADS attributable to New Oriental were $0.94 and $0.94, respectively. Net operating cash flow for the quarter was approximately $29.3 million and CapEx for the quarter was $22.3 million.

本季度歸屬於新東方的淨虧損為 1.893 億美元，而去年同期為虧損 4550 萬美元。歸屬於新東方的每 ADS 的基本和攤薄淨虧損分別為 1.12 美元和 1.12 美元。本季度歸屬於新東方的非美國通用會計準則淨虧損為 1.603 億美元，而去年同期為虧損 2,790 萬美元。歸屬於新東方的非美國通用會計準則每 ADS 的基本和攤薄淨虧損分別為 0.94 美元和 0.94 美元。本季度的淨經營現金流約為 2930 萬美元，本季度的資本支出為 2230 萬美元。

Turning to the balance sheet. As of May 31, 2022, New Oriental had cash and cash equivalents of $1,148.6 million. In addition, the company had $1,140.1 million in term deposits and $1,902.3 million in the short-term investments. New Oriental's deferred revenue balance, which is cash collected from the registered students for the courses and recognized proportionally as revenue as the instructions were delivered at the end of this quarter was $933.1 million, a decrease of 51.6% as compared to $1,926.4 million at the end of this quarter last year.

轉向資產負債表。截至2022年5月31日，新東方擁有現金及現金等價物11.486億美元。此外，該公司擁有 11.401 億美元的定期存款和 19.023 億美元的短期投資。新東方的遞延收入餘額為 9.331 億美元，即本季度末從課程註冊學生處收取的現金並按比例確認為收入，較期末的 19.264 億美元下降 51.6%去年這個季度。

The decrease is primarily due to the cessation of K-9 academic after-school tutoring services with compliance with the government policy in China.

減少的主要原因是根據中國政府的政策停止了 K-9 學術課外輔導服務。

Now I'll hand over to Stephen to go through the outlook and guidance.

現在，我將交給斯蒂芬進行展望和指導。

Thank you, Sisi. Looking ahead into the first quarter of fiscal year 2023, with the process of school closures now largely completed, we expect that our school network to become stabilized. The company has now entered a stage of starting a fresh, exploring new opportunities with greater flexibility and strong cash flows. We're confident in the sustainable profitability of all our remaining key business as well as the growth and profit potential of our new initiatives.

謝謝你，茜茜。展望 2023 財年第一季度，隨著學校停課過程現已基本完成，我們預計我們的學校網絡將趨於穩定。公司現已進入新的起步階段，以更大的靈活性和強勁的現金流探索新的機會。我們對我們所有剩餘關鍵業務的可持續盈利能力以及我們新舉措的增長和盈利潛力充滿信心。

For our new businesses, it will take time for them to come to full fruition. But as we saw in this quarter, the encouraging performance they have already achieved to showing proves that we are heading towards the right direction and we're confident that the business will be starting to contribute meaningful revenue from the next fiscal year onwards.

對於我們的新業務，它們需要時間才能全面開花。但正如我們在本季度看到的那樣，他們已經取得的令人鼓舞的表現證明我們正朝著正確的方向前進，我們相信該業務將從下一個財政年度開始貢獻有意義的收入。

As for the recent pandemic development in China, thanks to our OMO system, we believe that the overall impact that would cause to our business and financials will be limited. We have also had measured in place to control and handle lockdown situation should they ever arise again.

至於中國最近的疫情發展，由於我們的 OMO 系統，我們相信對我們的業務和財務造成的整體影響將是有限的。我們還採取了適當的措施來控制和處理鎖定情況，以防它們再次出現。

In sum, we expect the total net revenues in the first quarter of fiscal year 2023 to be in the range of $641.3 million to $680.6 million, representing a year-over-year decline in the range of 51% to 48%. Bottom line-wise, we are confident that we will achieve turnaround and profitable in the first quarter as well as achieving operating profit in the full year of 2023 fiscal year.

總而言之，我們預計 2023 財年第一季度的總淨收入將在 6.413 億美元至 6.806 億美元之間，同比下降 51% 至 48%。歸根結底，我們有信心在第一季度實現扭虧為盈，並在 2023 財年全年實現營業利潤。

To conclude, we are now taking all kinds of operational actions to promote our key remaining business and cautiously investing in new business, which will be the new growth engines that accelerates our recovery and to seek profitable growth. At the same time, we will continue to seek guidance from and corporate with government authorities in various province in China in connection with its efforts to comply with the relevant policies, guidelines and any related implementation rules, regulations and measures and to further adjust our business operations required.

總而言之，我們現在正在採取各種經營行動，推進我們的剩餘重點業務，並謹慎投資新業務，這將成為我們加速復蘇和尋求盈利增長的新增長引擎。同時，我們將繼續尋求中國各省政府部門的指導和合作，以努力遵守相關政策、指引和任何相關的實施規則、法規和措施，並進一步調整我們的業務所需的操作。

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. This is the end of our fiscal year 2022 Q4 summary. At this point, Sisi and I like to open the floor for questions. Operator, please open the call for these. Thank you.

我必須說，這些預期和預測反映了我們對最新監管措施的考慮以及我們當前和初步的觀點，這些觀點可能會發生變化。這是我們 2022 財年第四季度總結的結束。在這一點上，思思和我喜歡開始提問。接線員，請打開這些電話。謝謝你。

(Operator Instructions) And the first question comes from Mark Li with Citi.

（操作員說明）第一個問題來自 Citi 的 Mark Li。

Hi, Stephen. May I ask for one, is would you have any breakdown of revenue for the guidance that you provide by the major categories?

嗨，斯蒂芬。我可以問一個，對於您提供的主要類別的指導，您是否有任何收入細分？

Sorry, Mark. As before, we don't want to give the revenue breakdown in next quarter.

對不起，馬克。和以前一樣，我們不想給出下一季度的收入明細。

So maybe I follow-up with a quick question is, I noticed we have around 744 campus, and it should be stabilized going forward. It looks like it's higher than the previously mentioned 650 to 700 when in bottom. So would it mean there is a positive difference from the time we last spoke? And what would be your outlook for this side?

所以也許我跟進一個快速的問題是，我注意到我們大約有 744 個校園，並且應該會穩定下來。看起來它在底部時高於前面提到的 650 到 700。那麼這是否意味著與我們上次談話的時間有積極的不同？你對這方面的看法是什麼？

Yes. First of all, I must mention that our remaining business, or you can call the traditional business like the overseas related business and the consulting business, and the adult and university students business. I think they have all remarkable resilience because you saw the numbers of this fiscal year 2022. So we do hope we can do better in fiscal year 2023 in the new year.

是的。首先不得不提的是我們剩下的業務，或者你可以稱之為海外相關業務和諮詢業務等傳統業務，以及成人和大學生業務。我認為他們都有非凡的韌性，因為你看到了 2022 財年的數字。所以我們希望在新的一年裡，我們能在 2023 財年做得更好。

And on the other hand, we launched some new initiatives like the non-academic tutoring courses and like the intelligent learning system and devices they service to the students and as well the study tour and research camp. So I think the market demand is always there. And even for the new business, we started in this fiscal year in just a couple of months ago. But we have seen the customer retention rate is very high. And we do hope they can do better in the new fiscal year. So that's why we do keep a little bit more number or a higher number of the learning centers than we expected 3 months ago and Mark.

另一方面，我們推出了一些新的舉措，比如非學術輔導課程，比如他們為學生服務的智能學習系統和設備，以及遊學和研究營。所以我認為市場需求總是存在的。甚至對於新業務，我們在幾個月前的本財年就開始了。但我們已經看到客戶保留率非常高。我們確實希望他們在新的財政年度能做得更好。這就是為什麼我們確實保留了比 3 個月前和 Mark 預期的更多或更多的學習中心。

Just I have a quick follow-up is how many of the learning centers you have both non-academic tutoring and the existing business?

只是我有一個快速跟進是你有多少學習中心既有非學術輔導又有現有業務？

We don't have a detailed number. But in more than 50 cities, we do have the new business like the non-academic courses. So you can say the non-academic courses will be the new growth engine going forward.

我們沒有詳細的數字。但在 50 多個城市，我們確實有像非學術課程這樣的新業務。所以你可以說非學術課程將成為未來新的增長引擎。

And the next question comes from Felix Liu with UBS.

下一個問題來自瑞銀的 Felix Liu。

And congratulations on the very resilient quarter post restructuring. First, I wanted to ask a question about the new initiatives. You mentioned good progress on the non-academic tutoring as well as study camp. So if we look at this from a 1-year to 2- to 3- year horizon, which one of these initiatives do you expect to be the biggest revenue contribution or could you rank your expectation on the revenue contribution from the bigger to the lower initiatives?

並祝賀重組後非常有彈性的季度。首先，我想問一個關於新舉措的問題。您提到了非學術輔導和學習營的良好進展。因此，如果我們從 1 年到 2 到 3 年的時間範圍來看，您認為其中哪一項舉措將是最大的收入貢獻，或者您能否將您對收入貢獻的預期從大到小排列倡議？

My second question is on DongfangZhenxuan. I know this is a very good initiative that we launched under Koolearn. Have you seen any positive synergies between the livestreaming income with our education businesses?

我的第二個問題是關於東方真軒的。我知道這是我們在 Koolearn 下發起的一項非常好的計劃。您是否看到直播收入與我們的教育業務之間有任何積極的協同作用？

Okay. As for the non-academic tutoring courses, we launched these courses focused on cultivating the students in this innovative ability and comprehensive ability. And so we do have a lot of courses, like the courses to improve the students' reading and the presentation skill and something like the programming robot, the art, sports. We have a lot of courses. But we have seen extremely the revenue growth in the last couple of months.

好的。對於非學術類的輔導課程，我們推出了這些課程，重點培養學生的這種創新能力和綜合能力。所以我們確實有很多課程，比如提高學生閱讀能力和表達能力的課程，比如編程機器人、藝術、體育等。我們有很多課程。但我們已經看到過去幾個月的收入增長非常快。

And because as I said, the market demand is always there. And after the government policy last year, we saw some students, they do have more spare time. So the parents and students love to enroll our new classes. And yes, it's new business. The revenue contribution is very small, but it grows very fast. So we believe the new business will contribute more and more revenue going forward. And DongfangZhenxuan, yes, I share with you more information about DongfangZhenxuan. But I have to say, I can't share the business performance in detail with you. I will leave it to DongfangZhenxuan management, the Koolearn management to share with you more information in the earnings release announcements in this month, right, in next months.

因為正如我所說，市場需求始終存在。去年政府政策出台後，我們看到一些學生，他們確實有更多的業餘時間。所以家長和學生都喜歡報讀我們的新課程。是的，這是一項新業務。收入貢獻很小，但增長很快。因此，我們相信新業務將在未來貢獻越來越多的收入。還有東方真軒，是的，我和你分享更多關於東方真軒的信息。但我不得不說，我不能和你詳細分享業務表現。我將留給東方振軒管理層，Koolearn管理層在本月的收益發佈公告中與您分享更多信息，對，下個月。

But as I mentioned earlier, DongfangZhenxuan is an innovative blend of the knowledge sharing and the agriculture product promotion. You can check the numbers like the followers and GMV on third-party data platforms as referenced, but we are also grateful to be widely recognized across the media in China and even in the other countries. And beyond the financial gains, I think we're pleased to see we have also generated intangible returns which is to fulfill the social responsibility by helping the farmers and the agriculture product producers. And so this new business model has been exceeding our expectations. You saw what happens in the last month.

但正如我之前提到的，東方真軒是知識共享和農產品推廣的創新融合。您可以參考第三方數據平台上的關注者和GMV等數字，但我們也很高興在中國乃至其他國家的媒體上得到廣泛認可。除了經濟收益，我認為我們很高興看到我們還產生了無形的回報，即通過幫助農民和農產品生產者來履行社會責任。所以這種新的商業模式已經超出了我們的預期。你看到了上個月發生的事情。

And we expect Koolearn will become a key growth driver and gradually deliver meaningful contribution to the New Oriental's revenue and profit margin in the new year or even in the next 2 to 3 years. And yes, I think the audience loves the DongfangZhenxuan platforms. So I think the DongfangZhenxuan performance helps the local schools and the learning centers to get more students into our classrooms even for the traditional business or the new business. So this is very good for us. Felix?

我們預計Koolearn 將成為關鍵的增長動力，並在新的一年甚至未來2 至3 年內逐步為新東方的收入和利潤率做出有意義的貢獻。是的，我認為觀眾喜歡東方真選平台。所以我認為東方真軒的表演有助於當地學校和學習中心讓更多的學生進入我們的課堂，無論是傳統業務還是新業務。所以這對我們來說非常好。菲利克斯？

And the next question comes from Liping Zhao with CICC.

下一個問題來自中金公司的趙麗萍。

I got 2 here. First, could you please share the revenue contribution of the new initiatives in the first Q4 FY '22 and also in first quarter FY '23 balance? And second question is about the GP margin. Are we expecting the around 53% GP margin in 4Q FY '22 to be relatively stable sales for the coming quarters?

我這裡有2個。首先，您能否分享一下新舉措在 22 財年第四季度以及 23 財年第一季度餘額中的收入貢獻？第二個問題是關於 GP 保證金。我們是否預計 22 財年第四季度約 53% 的毛利率在未來幾個季度會相對穩定？

Okay. The new business, I think the revenue contribution from the new business will contribute around 20% of total revenue. This does not include the revenue from the DongfangZhenxuan or from Koolearn. So this is all on the EDU side, like the non-academic courses, or the research, the summer camps, something like that, or some other new business. This does not include the DongfangZhenxuan. And yes, on the GP margin side, I think we got a lot in this quarter, in Q4. But we do believe, we can get the higher gross margin in Q1 in the next quarter or even for the next full year fiscal year 2023, so that's why I said, at the bottom line-wise, we're confident we will achieve turnaround and be profitable in the first quarter, next quarter. And also, I think we expect we will be profitable in the full year of fiscal year 2023.

好的。新業務，我認為新業務的收入貢獻將佔總收入的20%左右。這不包括來自東方真軒或酷學的收入。所以這一切都在 EDU 方面，比如非學術課程，或者研究，夏令營，類似的東西，或者其他一些新業務。這還不包括東方真軒。是的，在 GP 利潤率方面，我認為我們在本季度第四季度獲得了很多。但我們確實相信，我們可以在下一季度甚至 2023 財年的下一季度獲得更高的毛利率，這就是為什麼我說，在底線方面，我們有信心實現扭虧為盈並在第一季度、下季度實現盈利。而且，我認為我們預計我們將在 2023 財年全年實現盈利。

(Operator Instructions) And the next question comes from Tianxiao Hou with TH Capital LLC.

（操作員說明）下一個問題來自 TH Capital LLC 的侯天曉。

Yes. The question is, you got (inaudible) [0:39:53] to the new business. And what was the new season (inaudible) [0:39:58] be going forward?

是的。問題是，您（聽不清）[0:39:53] 進入了新業務。新賽季（聽不清）[0:39:58] 會怎樣？

Yes. Actually, as we restructure all the business lines, terminated K-9 academic training. The remaining key business is like overseas-related business and also domestic test prep for university students. These businesses are much more seasonal than the K-12. So actually, you will see going forward since next fiscal quarter, our Q1 revenue contribution for full year will increase compared with previous years. So Q1 will be and continue to be the peak season and also Q3 will be set in peak season, and Q2 and Q4 will be relatively less in terms of the revenue contribution for full year.

是的。實際上，隨著我們重組所有業務線，終止了 K-9 學術培訓。剩下的主要業務是海外相關業務以及國內大學生考試準備。這些業務比 K-12 更具季節性。所以實際上，你會看到從下個財政季度開始，我們全年第一季度的收入貢獻將比往年增加。所以 Q1 將是並繼續是旺季，Q3 也將是旺季，Q2 和 Q4 對全年的收入貢獻會相對較少。

And the next question comes from Lucy Yu with Bank of America.

下一個問題來自美國銀行的 Lucy Yu。

My question is on the GP margin. So can you please elaborate the margin expansion in the fourth quarter, up from the 39% in the third quarter? And you also mentioned that the GP margin going forward might be higher than the 53%. And what is the driver behind that?

我的問題是關於 GP 保證金。那麼，您能否詳細說明第四季度的利潤率擴張，高於第三季度的 39%？您還提到未來的 GP 利潤率可能會高於 53%。這背後的驅動力是什麼？

Yes. Lucy, we have already -- we almost have done the learning center closure and some layoffs in the last year, last 3 quarters. So as, I said, we will keep the same number of the learning centers. And we want to hire more new people. And so that means the fixed cost is there. And we're seeing the revenue growth is recovered. And I think we will do -- we will see more and more the operating leverage going forward. And in the Q4, because the overseas consulting business typically contribute more revenue in Q4. So we do have the seasonality in Q4 for the overseas consulting business. So let's do the analysis year-over-year. So we do believe the -- in fiscal year 2023, both the GP margin and the profit margin, we will get better for the new year. As I said, we will be profitable in fiscal year 2023, Lucy?

是的。露西，我們已經——在過去的三個季度，我們幾乎完成了學習中心的關閉和一些裁員。因此，我說過，我們將保留相同數量的學習中心。我們想僱用更多的新人。這意味著固定成本是存在的。我們看到收入增長已經恢復。而且我認為我們會這樣做 - 我們將看到越來越多的運營槓桿向前發展。而在第四季度，因為海外諮詢業務通常在第四季度貢獻更多的收入。所以我們在第四季度確實有海外諮詢業務的季節性。因此，讓我們逐年進行分析。因此，我們確實相信——在 2023 財年，無論是 GP 利潤率還是利潤率，我們都會在新的一年變得更好。正如我所說，我們將在 2023 財年實現盈利，露西？

And the next question comes Sheng Zhong with Morgan Stanley.

下一個問題是盛忠和摩根士丹利。

I want to ask about the new business that you see positive momentum in your new business. Do you have any operation data that you could share about, for example, the non-academic tutoring the new tutoring equipment in summer and the retention and also like the student acquisition, any detail that you could share? And also, how do you see the competition is the public schools because they also offer some non-academic courses or after school service?

我想問一下您在新業務中看到積極勢頭的新業務。有沒有什麼運營數據可以分享，比如暑期的非學歷補習，新的補習設備，留存，還有學生的獲取，有什麼細節可以分享的嗎？而且，你如何看待公立學校的競爭，因為他們也提供一些非學術課程或課後服務？

Yes. So for these data for the new business. Even though we started business a couple of quarters ago. But as I said, the business developed very good. And the student retention rate for something like the reading and the presentation skill courses is almost closely to the traditional K-12 academic courses. So it sounds very good, right? And on the margin side, I remember in the last earnings call, we guided the -- our target is to get a breakeven for the new business. But this time, we feel better. So I think we do believe we can get the profit for the new business. But it's too early to say the detailed numbers what is the margin for the new business. But we do believe we can get profitable in the new fiscal year.

是的。所以對於新業務的這些數據。即使我們在幾個季度前開始營業。但正如我所說，業務發展得非常好。閱讀和演講技巧課程的學生保留率幾乎與傳統的 K-12 學術課程接近。所以聽起來很不錯，對吧？在利潤方面，我記得在上次財報電話會議中，我們指導了我們的目標是為新業務實現盈虧平衡。但這一次，我們感覺好多了。所以我認為我們確實相信我們可以獲得新業務的利潤。但現在說新業務的利潤是多少還為時過早。但我們確實相信我們可以在新的財政年度實現盈利。

Okay. And then also on the commutation with the public schools, do you have the view on our advantage with them?

好的。還有關於與公立學校的交換，您對我們與他們的優勢有何看法？

Yes, because we do have a lot of data and systems and the teaching experience or even some data in hand. So we set up a new department to sell the product to the public schools or even the kindergarten, primary and secondary schools. And it's just a new start, but we do believe we can do better. And because I do believe the public schools and kindergartens, they need our service because if you follow us for so many years, and we spend a lot of money and invest a lot of the human resource, IT workers and content writers to build on our system and even the customer base. So I think we will find a new way to monetize this.

是的，因為我們確實有很多數據和系統以及教學經驗，甚至手頭有一些數據。所以我們成立了一個新部門，將產品銷售給公立學校甚至幼兒園、中小學。這只是一個新的開始，但我們相信我們可以做得更好。而且因為我確實相信公立學校和幼兒園，他們需要我們的服務，因為如果您關注我們這麼多年，我們會花費大量資金並投入大量人力資源、IT 人員和內容作家來建立我們的系統甚至客戶群。所以我認為我們會找到一種新的方式來賺錢。

Thank you. And we are now approaching the end of the conference call. I would now like to turn the call over to New Oriental's Executive President and CFO, Stephen Yang, for his closing remarks.

謝謝你。我們現在接近電話會議的尾聲。我現在想把電話轉給新東方的執行總裁兼首席財務官 Stephen Yang，他的閉幕詞。

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.

再次感謝您今天加入我們。如果您還有任何問題，請隨時與我或我們的任何投資者關係代表聯繫。謝謝你。

Thank you. This concludes today's teleconference. Thank you for attending today's presentation. You may now disconnect your lines.

謝謝你。今天的電話會議到此結束。感謝您參加今天的演講。您現在可以斷開線路。