New Oriental Education & Technology Group Inc (EDU) 2024 Q4 法說會逐字稿

Good evening, and thank you for standing by for New Oriental's full-year 2024 fourth-quarter results earnings conference call. (Operator Instructions) Today's conference is being recorded. If you have any objections, you may disconnect at this time.

晚上好，感謝大家出席新東方2024年全年第四季業績財報電話會議。 （操作員指示）今天的會議正在錄音。如果您有任何異議，您可以此時斷開連接。

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

現在我想把會議交給今天會議的主持人趙思思女士。請繼續。

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 newswire services.

謝謝。大家好，歡迎參加新東方2024年第四財季財報電話會議。我們這段期間的財務表現已於今天早些時候發布，可在公司網站以及我們的新聞專線服務上查看。

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.

今天，我和執行總裁兼財務長楊士強將與大家詳細分享新東方最新的財報和業務動態。之後，史蒂芬和我將回答您的問題。

Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provisions of the US Private Security Litigation Reform Act of 1995. Forward-looking statements invoke inherent risks and uncertainties.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人安全訴訟改革法案的安全港條款做出的前瞻性陳述。

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.

因此，我們的結果可能與今天表達的觀點有重大差異。我們向美國證券交易委員會提交的公開文件中概述了許多潛在的風險和不確定性。除適用法律要求外，新東方不承擔任何更新任何前瞻性聲明的義務。

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. I will now first turn the call over to Mr. Stephen Yang. Please go ahead.

提醒一下，本次會議正在錄製中。此外，本次電話會議的網路直播將在新東方投資者關係網站investor.neworiental.org上進行。我現在先把電話轉給楊先生。請繼續。

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 regards to the latest separation of East Buy and Time with Yuhui.

謝謝你，茜茜。大家好，感謝您加入我們的通話。在開始之前，我們先向一直以來支持和信任新東方的人們表示感謝。我們了解到，對於東買與時光與惠的最新分離可能存在一些疑問。

Before we go into New Oriental's performance, we would like to stress that this decision was carefully made upon a considerable amount of transparent communication with Dong Yuhui, who has been a beloved colleague of ours and drove instrumental growth of East Buy, as we sent Yuhui our best regards for his new venture.

在我們討論新東方的表現之前，我們想強調的是，這一決定是在與董宇輝進行大量透明溝通後謹慎做出的，他是我們敬愛的同事，推動了東買的發展，因為我們派遣了宇輝。

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 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've thankfully built over the years, strategic pivots to expand our multi-pronged presence are in the works.

本公司始終致力於為平台打造穩定、健康的發展之路，並盡力實踐以客戶為中心的承諾，為客戶提供多樣化、優質、健康、美味且高性價比的產品。值得慶幸的是，以我們多年來建立的卓越團隊、深遠的合作夥伴關係、400 多個 SKU 和分銷管道為基礎，我們正在製定多管齊下擴大業務的戰略支點。

And we will continue to leverage East Buy to propel knowledge sharing, product dissemination, and culture promotion to our valued customers in the long term. For more details, please refer to East Buy's latest announcements.

長期來看，我們將繼續利用東買向我們尊貴的客戶推動知識共享、產品傳播和文化推廣。更多詳情請參閱東買最新公告。

And now, let's deep dive into New Oriental's fiscal year 2024 performance. For New Oriental's financial results of this fiscal quarter, we are pleased to announce that the company has achieved a healthy growth in our key businesses, with a solid top-line growth of 32.1%. Strong demands have fueled stable recovery across our business lines, while our portfolio of innovative ventures have invigorated the company's revenue with healthy contributions.

現在，讓我們深入了解新東方2024財年的表現。對於新東方本財季的財務業績，我們很高興地宣布，公司重點業務實現了健康成長，營收穩健成長32.1%。強勁的需求推動了我們各業務線的穩定復甦，而我們的創新投資組合則為公司的收入帶來了健康的貢獻。

New Oriental's bottom-line performance has achieved the yields with operating margin and non-GAAP operating margin reaching 0.9% and 3.2% for this quarter, respectively. Except for East Buy's investments in private label products and a certain cost and expenses related to the platform of Time with Yuhui, our spending accelerated capacity extension and newly integrated tourism-related business, as well as additional incentives to the management and staff, have led to a short-term impact on our operating margin this quarter.

新東方的獲利業績實現了盈利，本季營業利潤率和非美國通用會計準則營業利潤率分別達到0.9%和3.2%。除了東買對自有品牌產品的投資以及與時光與雨匯平台相關的一定成本和費用外，我們的支出加速了產能擴張和新整合的旅遊相關業務，以及對管理層和員工的額外激勵對我們本季的營業利潤率產生短期影響。

However, coupled with the increasing market demand, we strongly believe we made the right move to input 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 facility and operating efficiency. We expect our operating margin of the company, excluding East Buy, will expand year over year in the first quarter of 2025 and deliver satisfactory operating profit for the full fiscal year 2025.

然而，隨著市場需求的不斷增長，我們堅信我們投入正確的投資是正確的。我們預計，隨著我們繼續提高設施利用率和營運效率，教育業務的利潤壓力將在下一財年減輕。我們預計，除東買外，該公司的營業利潤率將在 2025 年第一季同比擴大，並在 2025 年整個財年實現令人滿意的營業利潤。

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. Our key remaining business secured an encouraging trend, and new initiatives have shown positive momentum.

現在，我想花一些時間向大家詳細介紹我們現有業務線本季的表現以及新舉措。我們主要的剩餘業務保持了令人鼓舞的趨勢，新舉措也呈現出積極的勢頭。

Breaking it down, the overseas test drive 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 revenue increase of about 17% in dollar terms or 23% in RMB terms year over year for the first fiscal quarter of 2024.

其中，本季海外試乘業務美元營收年增18%，人民幣營收年增23%。 2024年第一財季，留學諮詢業務的營收以美元計算年增約17%，以人民幣計算年增約23%。

The adults and university students business recorded a revenue increase of 16% in dollar terms or 21% increase in RMB terms year over 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.

本季成人和大學生業務的營收以美元計算年增 16%，以人民幣計算成長 21%。我們的新措施主要圍繞在促進學生的全面發展，在各自的事業中繼續保持強勁的勢頭。

Firstly, the non-academic tutoring courses, which we have offered in around 60 existing cities, focuses on cultivating students' innovative ability and comprehensive quality. 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 distance.

首先，我們在現有約60個城市開設的非學業輔導課程，著重培養學生的創新能力和綜合品質。我們很高興看到我們已開發的市場進一步滲透，特別是在高線城市，本財季報告的學生入學總數約為 875,000 人。中國排名前10的城市貢獻了這一距離的60%以上。

Secondly, the intelligent learning system and device business has been adopted in around 60 cities. We're 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%.

其次，智慧學習系統及設備業務已在約60個城市落地。我們很高興看到穩定的客戶保留率和可擴展性，本季活躍付費用戶約為 188,000 名。全國排名前10的城市對該措施的收入貢獻超過55%。

Our smart education business, education material, 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.

智慧教育業務、教材、數位化智慧學習解決方案持續為公司整體進步貢獻物質效益。總而言之，我們新的教育業務計劃本季的美元收入年增 50%，人民幣收入年增 57%。

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 the camp education. Within the business line, our study tour and research camp business for students of K-12 and university age, continue to achieve sustainable growth this quarter.

此外，新整合的旅遊相關業務是我們的創意之一，為您量身訂做文化之旅、國內外遊學、營地教育等多元化產品。業務範圍內，針對K-12和大學年齡層學生的遊學和研學營業務，本季持續實現永續成長。

We have conducted a study towards the research camp in over 55 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. 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.

我們對全國超過55個城市的研究營進行了研究，其中中國前10名的城市提供了這項新業務55%以上的收入份額。我們也在27個特色省份試點了一批精品旅遊產品，擴大了包括中老年在內的所有年齡層的旅遊產品範圍。由於我們仍處於規劃、驗證和評估選定地區業務知名度的初步階段，如果有及時更新，我們將及時通知您。

With regards to our OMO system, we have proceeded in revamping our platform and leveraged our education infrastructure and technology edge on remaining key business and new initiatives, with a vision to provide advanced, diversified education service to customers of all ages. During the reporting period, a total of $30.5 million has been invested in our OMO teaching platform, which equips us of the flexibility to maintain unrivaled service to students.

在OMO系統方面，我們繼續進行平台改造，並利用我們的教育基礎設施和技術優勢來開展剩餘的關鍵業務和新舉措，旨在為各年齡段的客戶提供先進、多元化的教育服務。在報告期間內，我們的 OMO 教學平台總共投資了 3,050 萬美元，這使我們能夠靈活地為學生提供無與倫比的服務。

With regards 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 equivalents, term deposits, and short-term investments, totaling approximately $4.9 billion.

關於公司最新的財務狀況，我有信心與大家分享，公司財務狀況健康，現金及現金等價物、定期存款和短期投資總計約49億美元。

In addition, we would like 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.

此外，我們想強調的是，公司董事會於 2022 年 7 月批准了一項股票回購計劃，根據該計劃，該公司被授權在未來 12 個月內回購最多 4 億美元的公司 ADS 或普通股。

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.

公司董事會進一步批准將股票回購計畫的生效時間延長至2025年5月31日。

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

現在，我將把電話轉給塞西，與您分享關鍵的財務數據。茜茜，請繼續。

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 Buy and its subsidiaries and variable interest entity to acquire East Buy's online education business at an aggregate consideration of RMB1.5 billion.

在我們討論主要財務數據之前，我們想通知您，作為公司業務線重組的一部分，公司的全資子公司和可變利益實體與東買及其子公司和可變利益實體簽訂了收購協議東買線上教育業務總代價15億元。

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. Upon completion, the online education business was deconsolidated from East Buy's consolidated financial statements and is now recorded by the company under educational services.

代價乃雙方經公平磋商並參考獨立估價後同意。此次收購已於本財季完成。交易完成後，線上教育業務已從東買合併財務報表中取消合併，目前由公司記錄在教育服務項下。

Now, for our key financial details for this quarter. Operating costs and expenses for the quarter were $1,126.2 million, representing a 38.6% increase year over year. Non-GAAP operating costs and expenses for the quarter, which exclude share-based compensation expenses, were $1,100.4 million, representing a 40.7% increase year over year.

現在，了解本季的主要財務細節。該季度營運成本和費用為 11.262 億美元，年增 38.6%。本季非 GAAP 營運成本和費用（不含股權激勵費用）為 11.004 億美元，較去年同期成長 40.7%。

The increase was primarily due to the costs and expenses related to the substantial growth in East Buy's private label products, live streaming, e-commerce business, and accelerated capacity expansion for education business. 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.

成長主要是由於東買自有品牌產品、直播、電商業務大幅成長以及教育業務產能擴張加速帶來的成本費用。收入成本年增 38.5% 至 5.424 億美元。銷售和行銷費用年增 40.9%，達到 2.082 億美元。

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, were $355.2 million, representing a 42.3% increase year over year.

該季度的一般管理費用年增 37.5%，達到 3.755 億美元。非 GAAP G&A 費用（不含股權激勵費用）為 3.552 億美元，較去年同期成長 42.3%。

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. 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.

2024 年第四財季，分配給相關營運成本和費用的股權激勵費用總額下降 15.5%，至 2,580 萬美元。該季度非 GAAP 營運收入為 3,630 萬美元，年減 53.8%。

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.

該季度歸屬於新東方的淨利潤為2700萬美元，年減6.9%。新東方每股ADS基本淨利和稀釋後淨利分別為0.16美元和0.16美元。

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. Net cash flow generated from operation for the fourth fiscal quarter of 2024 was approximately $376.8 million. And capital expenditure for the quarter were $27.4 million.

該季度非美國通用會計準則歸屬於新東方的淨利潤為3,690萬美元，年減40.5%。非美國通用會計準則下新東方每股美國存託股基本淨利和稀釋後淨利分別為 0.22 美元和 0.22 美元。 2024年第四財季營運產生的淨現金流量約為3.768億美元。該季度的資本支出為 2740 萬美元。

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 $2,065.6 million in short-term investments.

轉向資產負債表，截至2024年5月31日，新東方擁有現金及現金等價物13.894億美元。此外，該公司還有14.894億美元的定期存款和20.656億美元的短期投資。

New Oriental's deferred revenue, which is representing 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 (sic - see press release, "$1,780.1 million"), an increase of 33.1% as compared to $1,337.6 million at the end of the fourth quarter of last fiscal year.

新東方的遞延收入為 7.801 億美元，代表從客戶處預收的現金以及將在 2024 財年第四季度末交付服務或商品時確認的相關收入（原文如此 - 請參閱新聞稿，“ 17.801 億美元” ），較上一財年第四季末的13.376 億美元成長33.1%。

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

現在，我將請史蒂芬來介紹我們的展望和指導。

Thank you, Sisi. As we look ahead for 2025, we're confident that our educational business will embark on a healthy trajectory of growth fueled by the continuously strong demands, supported by New Oriental's rooted resources that have stood at the test of time.

謝謝你，茜茜。展望2025年，在持續強勁的需求推動下，在新東方經得起時間考驗的根基資源的支撐下，我們的教育業務將走上健康發展的軌道。

We have a firm belief in delivering margin expansion for the whole company, except for East Buy, 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 belief that the significant resource we invested for a nationwide rollout of these tours will contribute meaningful revenue in the new fiscal year.

我們堅信在2025年第一季實現除東買外的整個公司的利潤率擴張，並在整個財年實現令人滿意的營業利潤。同時，我們預計新的旅遊相關業務將實現巨大增長，因為我們相信，我們為在全國範圍內推出這些旅遊而投入的大量資源將在新財年貢獻可觀的收入。

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 educational business in the new year. We plan to increase our capacity by around 20% to 25% for the fiscal year 2025.

在確保收入和獲利成長之間的健康平衡的同時，我們將謹慎管理產能擴張和招聘，以支持新一年教育業務的發展。我們計劃在 2025 財年將產能增加約 20% 至 25%。

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 to the local operations and the financial performance during the year.

最新開幕的飯店將在營收和利潤表現較好的城市開設。請放心，我們將根據當地業務和年內的財務表現，密切關注新開業的速度和規模。

We expect total net revenue, excluding revenue generated from East 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 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 Buy, in the first quarter will be expanded year over year.

我們預計，2025財年第一季（2024年6月1日至2024年8月31日）的總淨收入（不包括東買產生的收入）將在12.547億美元至12.835億美元之間，與去年同期相比年增幅在31%至34%之間。此外，根據我們目前的預測，我們預計除東買外，整個公司第一季的營業利潤率將比去年同期擴大。

To conclude, New Oriental has been known as a resilient adventurer that sails on its voyage [mid-years changes] for the transformation. Thanks to the support of our valued customers. Promising premium offering and giving back to society in the long term stand firm as our priorities from day one.

總而言之，新東方被譽為堅韌的冒險家，在轉型的航程中揚帆起航。感謝我們尊貴客戶的支持。從長遠來看，承諾優質產品和回饋社會始終是我們的首要任務。

As always, we will devote reasonable resources on research and application of new technologies, such as AI and ChatGPT, into our educational and product offerings. with a vision to uplift our strength in pursuit of the growth and operating efficiency. 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.

一如既往，我們將投入合理的資源，將人工智慧和 ChatGPT 等新技術的研究和應用融入我們的教育和產品中。願景是提升我們的實力，追求成長和營運效率。我們將繼續尋求中國各省份政府部門的指導和配合，遵守相關政策，並根據需要進一步調整我們的業務運作。

We will also work diligently to enhancing 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 forecast reflect our considerations of the latest regulatory measure, as well as our current and preliminary view, which is subject to change.

我們也將努力提高國家的教育水平，鞏固其領先地位，從而進一步釋放我們所有業務的潛力，實現我們的願景。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，這些觀點可能會改變。

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 this. Thank you.

這是我們 2024 財年第四季總結的結尾。現在，我想請大家提問。接線員，請為此開啟呼叫。謝謝。

(Operator Instructions) Alice Cai, Citi.

（操作員指示）Alice Cai，花旗銀行。

Good evening, Stephen and Sisi. Thank you for your presentation. I have a question about the growth strategy.

晚上好，史蒂芬和塞西。謝謝您的介紹。我有一個關於成長策略的問題。

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 color about this? Thank you so much.

由於您不打算擴展到新城市，那麼在達到飽和之前，您現有的地點還剩下多少成長空間？您能分享一下您對此的顏色嗎？太感謝了。

Okay. Yeah, thank you, Alice. As for the learning center expansion plan, I think, as I said, we plan to increase the capacity expansion by 20% to 25% in the new fiscal year. And I think we will open the most of the new learning centers where the new classroom areas in the -- mostly in the existing cities.

好的。是的，謝謝你，愛麗絲。至於學習中心擴建計劃，我認為，正如我所說，我們計劃在新財年將產能擴張增加20%至25%。我認為我們將開設大部分新的學習中心，其中新的教室區域主要在現有城市。

And I think most of the openings will be in the cities with a better performance, both the top-line growth and the margin expansion in fiscal year '24. And I think we will keep monitoring the pace and the scale of the new openings. We care more about the balance of the top-line growth and the margin expansion. So this is our strategy.

我認為大部分職缺將位於 24 財年營收成長和利潤率擴張方面表現較好的城市。我認為我們將繼續監控新開業的速度和規模。我們更關心營收成長和利潤率擴張的平衡。這就是我們的策略。

And I think in the coming new year, 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 coming year will cover the incremental classroom rental.

我認為在新的一年裡，在新學習中心擴建20%至25%後，我們將保持利用率的上升。我認為來年強勁的收入成長將涵蓋增量的教室租金。

Thank you, Alice.

謝謝你，愛麗絲。

Thank you so much for your sharing.

非常感謝您的分享。

Yiwen Zhang, chinarenaissance.com.

張藝文，chinarenaissance.com。

Hey, thanks. Good evening. Thanks for taking my question. So I would like to follow up on the margin decline in this fiscal quarter. So you mentioned several reasons in your prepared remarks. C

嘿，謝謝。晚安.感謝您提出我的問題。因此，我想跟進本財季的利潤率下降情況。所以你在準備好的發言中提到了幾個原因。 C

Could you discuss more about which ones are recurring? And also, if we look at education business alone, how do we see the margin actually trending in the fiscal quarter? Thank you.

您能否多討論哪些是重複出現的？而且，如果我們單獨看教育業務，我們如何看待本財季的利潤率實際趨勢？謝謝。

Yeah. Thank you, Yiwen. Let's start with this quarter's margin analysis. Yeah, the OP margin decreased in this quarter. I think it's mainly due to a couple of the reasons.

是的。謝謝你，伊文。讓我們從本季的利潤率分析開始。是的，本季營業利潤率有所下降。我認為這主要是由於以下幾個原因。

Number one, so we accelerated the learning center expansion in this quarter and even in the last two quarters. And also, we newly invested the new tourism business. And number two reason, we made the additional incentives to the management and staff in Q4.

第一，所以我們在本季甚至最後兩季加快了學習中心的擴張。此外，我們也新投資了新的旅遊業務。第二個原因是，我們在第四季對管理階層和員工進行了額外的激勵。

And number three is East Buy's investments in private label products. And some certain one-time costs and expenses relate to the sales -- Time with Yuhui. So I think, partly, some of the expenses is one time of these -- the incremental cost expenses in Q4.

第三是東買對自有品牌產品的投資。還有一些與銷售相關的一次性成本和費用——與宇輝的時光。因此，我認為，部分費用是其中之一——第四季的增量成本費用。

And as for the margin outlook, we expect the OP margin in the coming Q1 of the whole company, excluding East Buy, will be expanded by 200 basis points year over year. So that means you will see the more operating leverage and the higher operating efficiency in the coming Q1.

至於利潤率前景，我們預計未來第一季全公司（不包括東買）的OP利潤率將比去年同期擴大200個基點。因此，這意味著您將在即將到來的第一季看到更大的營運槓桿和更高的營運效率。

And we are quite optimistic about the margin expansion of the company, except for East Buy. In fiscal year '25, the margin will be expanded. I think we will -- as I said, we will get more operating leverage and keep the learning center utilization rates up.

我們對除東買外其他公司的利潤率擴張都相當樂觀。在'25財年，利潤率將擴大。我認為我們會 - 正如我所說，我們將獲得更多的營運槓桿並保持學習中心的利用率上升。

So this quarter's margin decrease is just one time. And next quarter, you will see the margin expansion for the educational business.

所以本季的利潤率下降只是一次。下個季度，您將看到教育業務的利潤率擴張。

Thank you, Yiwen.

謝謝你，伊文。

Okay, thanks. That's very clear.

好的謝謝。這非常清楚。

Felix Liu, UBS.

劉菲利克斯，瑞銀。

Thank you, management, for taking my question. First, I just want to say that I have a lot of respect to how New Oriental handled the situation with Dong Yuhui and believe the decisions you made will be beneficial to the long-term branding of New Oriental.

謝謝管理層回答我的問題。首先我想說的是，我非常尊重新東方處理董宇輝事件的方式，相信你所做的決定將有利於新東方的長期品牌塑造。

My question is a follow-up on the margin expansion. You mentioned that, Q1, you expect the margin to expand by 200 bps. May I check the pace of margin expansion or your expectation on the pace of expansion for the rest of the year?

我的問題是關於利潤率擴張的後續問題。您提到，第一季度，您預計利潤率將擴大 200 個基點。我可以查一下利潤率擴張的速度或是您對今年剩餘時間擴張速度的預期嗎？

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? Thank you.

您認為第一季將是利潤率擴張的頂峰，還是預計這一勢頭將在第一季之後的接下來的幾季中持續甚至改善？另外，在利潤率改善的驅動因素方面，您是否認為該驅動因素主要來自營運槓桿，或者您認為基礎細分市場的利潤率也有改善的潛力？謝謝。

Yeah, Felix, as for the margin outlook, yeah, we guided the margin expansion in Q1 for the educational business will be expanded by 200 basis points. And as you know, Q1 is the peak season for the educational business.

是的，Felix，至於利潤率前景，是的，我們指導教育業務第一季的利潤率擴張將擴大 200 個基點。如您所知，第一季是教育業務的旺季。

And so in the rest of the year, Q2 to Q4, I think we'll keep posted [your guys] expected margin expansion in detail. But as I said, we're quite confident about the whole-year margin expansion for the education business.

因此，在今年剩下的時間裡，從第二季度到第四季度，我認為我們將詳細發布[你們的]預期利潤率擴張的信息。但正如我所說，我們對教育業務全年利潤率的擴張充滿信心。

And the operating leverage, yeah, we open more learning centers and hire more people in Q3 and Q4. But I think this market demand for educational business, both for the overseas-related business, especially for the K-12 business, I think the demand is very, very strong.

是的，我們在第三季和第四季開設了更多的學習中心並僱用了更多的人員。但我覺得這個市場對於教育業務的需求，無論是對於海外相關的業務，特別是對於K-12的業務，我認為這個需求是非常非常旺盛的。

And we have seen the less competition in the market, even though we know the competitors are investing more money and human resources to take more market share. But we're quite optimistic that New Oriental will take more market share from the market.

儘管我們知道競爭對手正在投入更多的資金和人力資源來佔據更多的市場份額，但我們看到市場競爭越來越少。但我們相當樂觀地認為新東方將從市場上奪取更多的市場份額。

And I think we do have the operating leverage in hand. We will leverage the business by the top angles -- what I mean is the top-line growth -- I think we will beat the top-line guidance again in Q1 for the whole new year. And so I would believe the margin extension in Q1 and the whole year of 2025.

我認為我們確實擁有營運槓桿。我們將透過頂角來利用業務——我的意思是頂線成長——我認為我們將在整個新的一年的第一季再次超過頂線指引。因此，我相信第一季和 2025 年全年的利潤率都會延長。

Alice Ma, Bank of America.

艾麗絲馬，美國銀行。

Hi, this is Lucy from Bank of America. So I have a question on the enrollment growth versus the capacity expansion pace. So if we're looking at this quarter, actually, our number of learning centers have been expanded by like 42% on a year-over-year basis. But non-academic tutoring enrollment only grow like 39%.

大家好，我是美國銀行的露西。所以我有一個關於入學人數成長與產能擴張速度的問題。因此，如果我們看看本季度，實際上，我們的學習中心數量比去年同期增加了 42% 左右。但非學術輔導的入學人數只增加了 39% 左右。

I know it's not a big difference. But if we're looking at the past quarters, enrollment growth is always 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? Thank you.

我知道這差別不大。但如果我們回顧過去的幾個季度，入學人數的成長總是高於產能擴張的速度。那麼我們該如何看待這兩者之間的差異呢？是因為時間安排還是其他原因？謝謝。

Part of it is because of the timing, like the student enrollment window, the open -- like the timing difference. And so, yeah, I think as I said, the -- I think in this quarter -- at the end of this fiscal year, we have added around 37% of new capacity.

部分原因是時間安排，例如學生入學窗口、開放時間等時間差異。因此，是的，我認為正如我所說，在本財年末，我認為在本季度，我們增加了約 37% 的新產能。

Yeah, that's a little bit bigger than we expected, but I think we will bear fruit of things to Q1. So, for example, as for the new business for the K-12, for the new business, the top-line growth in this quarter in RMB terms is 57% year over year. And even in the coming summer, in the Q1, we believe the revenue of the new business will be somewhere around 50% -- 45% to 50% year-over-year growth.

是的，這比我們預期的要大一些，但我認為我們將在第一季取得成果。所以比如說K-12的新業務，對於新業務來說，以人民幣計算，本季的營收年增了57%。即使在即將到來的夏季，在第一季度，我們相信新業務的收入將年增 50% 至 45% 至 50% 左右。

So I think the revenue will cover the incremental cost of the new learning centers. And on the other hand, I think the rentals per learning center per square meters get decreased because the markets change a lot. So I do believe we will get the operating leverage on rentals, even on the other costs and expenses going forward, Lucy.

所以我認為收入將涵蓋新學習中心的增量成本。另一方面，我認為每個學習中心每平方公尺的租金會下降，因為市場變化很大。因此，我確實相信我們將獲得租金的營運槓桿，即使是未來的其他成本和費用，露西。

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

謝謝你，史蒂芬。抱歉，請恕我直言，一個小問題是，您提到在五月份季度，有少量類似一次性的補償支付給了董宇輝。所以我認為這是一次性的，但這會是第一季給董宇輝的補償嗎？僅此而已。謝謝。

Yeah, I think some -- the costs and expenses related to the sale of the Yuhui Tongxing will be -- happens in the Q4 and the coming Q1. So we will keep you posted in the next earnings call to tell you the exact numbers of how much we spend in the coming Q1. But it's one time.

是的，我認為與宇輝同興的銷售相關的成本和費用將在第四季度和即將到來的第一季發生。因此，我們將在下一次財報電話會議上隨時通知您，告訴您我們在即將到來的第一季支出的確切數字。但這是一次。

Okay. Thank you so much.

好的。太感謝了。

Timothy Zhao, Goldman Sachs.

提摩西·趙，高盛。

Great. Hi, Stephen. Hi. Thank you for taking my question. My question is regarding your revenue outlook for the new fiscal year.

偉大的。嗨，史蒂芬。你好。感謝您回答我的問題。我的問題是關於你們新財年的收入前景。

Just wondering if you can give us certain guidance on the revenue growth for different segments of the business, including the traditional K-12, the overseas test prep consulting, and the K-12 new initiative. I think that would be very helpful. Thank you.

只是想知道您能否就不同業務部門的收入增長給我們一些指導，包括傳統的 K-12、海外準備諮詢和 K-12 新舉措。我認為這會很有幫助。謝謝。

Yeah. As for the revenue outlook for the new year in different segments, the overseas test prep business, I think the revenue growth in the coming year will be somewhere around 20% to 25% year over year. And the consulting business, the revenue growth will be somewhere around 15% year over year.

是的。至於新的一年不同細分領域的收入前景，海外備考業務，我認為未來一年的收入年增將在20%至25%左右。諮詢業務的收入年增將在15%左右。

And the new business, I think the top-line growth of the new business will be expanded by -- will be increased by 45% to 50%. And as for 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 conservative way.

至於新業務，我認為新業務的營收成長將增加 45% 至 50%。至於高中業務，我認為收入成長將在 25% 至 30% 左右。一如既往，我們將以最保守的方式提供指導。

Great. Thank you.

偉大的。謝謝。

Charlotte Wei, HSBC.

夏洛特·魏，匯豐銀行。

So good evening, Sisi and Stephen. Thank you for taking my question. My question is regarding competitive landscape.

晚上好，塞西和史蒂芬。感謝您回答我的問題。我的問題是關於競爭格局。

So we noticed local 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 share more color on the summer enrollment growth and student retention rate? Thank you.

因此我們注意到當地的小企業在擴張方面更加積極。那麼您認為今年夏天的競爭會加劇嗎，尤其是在一線城市？那麼您能否分享更多有關夏季入學人數成長和學生保留率的資訊？謝謝。

As for the competition environment, yeah, we have seen some competitors invest some money or open more learning centers in the top cities. But I think as the whole analysis of the competition, I think the competition situation now is less a lot than a couple of years ago before the policy. So I believe the competition is less.

至於競爭環境，是的，我們看到一些競爭對手投入了一些資金或在頂級城市開設了更多的學習中心。但我認為從整個競爭狀況分析來看，我認為現在的競爭情況比政策執行前的幾年少了很多。所以我相信競爭會減少。

And I think new rental will take more market share and seize the opportunity to provide the good services to the students. And the student enrollment for the summer -- and we have already given the guidance. And the top-line growth will be in the range of 31% to 34% in dollar terms year over year. And this is for education business and take out the -- excluding the East Buy.

我認為新的租賃將佔據更多的市場份額並抓住機會為學生提供良好的服務。還有夏季的學生入學——我們已經給了指導。以美元計算，營收年增將在 31% 至 34% 之間。這是針對教育業務的，不包括東買。

And yeah, consider the style of the guidance, I think there will be the guidance in Q1. And the student enrollments in Q1, I think it's very good. So I think we're quite optimistic about the top-line goals and the market extension in Q1. Thank you.

是的，考慮指導的風格，我認為第一季將會有指導。第一季的學生入學情況，我認為非常好。因此，我認為我們對第一季的營收目標和市場拓展非常樂觀。謝謝。

Thank you. Very clear. May I have another question regarding the shareholder return because we have a lot of cash on hand? So do you consider upsizing your share buyback plan if the current plan retires? Thank you.

謝謝。非常清楚。我還有一個關於股東回報的問題嗎，因為我們手上有很多現金？那麼，如果當前計劃終止，您是否會考慮擴大股票回購計劃？謝謝。

Yeah, we do have the $400 million share buyback program in hand. And till yesterday, we finished the $294 million. So that means we have somewhere $100 million left. So I think in the first step, we'll finish the $100 million share buyback.

是的，我們手頭上確實有 4 億美元的股票回購計畫。到昨天為止，我們已經完成了 2.94 億美元的融資。這意味著我們還剩下 1 億美元。所以我認為第一步，我們將完成 1 億美元的股票回購。

And once we finish the $400 million share buyback program, I think I will discuss with Michael and the Board to think about even more types of allocation, the share buyback or the dividend to the investors. Yeah, I think you're right. We're piling up the cash, and we have a lot of cash.

一旦我們完成了 4 億美元的股票回購計劃，我想我將與邁克爾和董事會討論更多類型的分配，股票回購或向投資者分紅。是的，我認為你是對的。我們正在累積現金，而且我們有很多現金。

We have $4.9 billion cash in hand. So I think we will create more value to the shareholders. And I think we should pay more capital allocation to the investors.

我們手頭上有 49 億美元現金。所以我認為我們將為股東創造更多的價值。我認為我們應該向投資者支付更多的資本配置。

(Operator Instructions) (inaudible), CICC.

（操作員指示）（聽不清楚），CICC。

Thanks, Stephen, for taking my question. Just one quick question on your tourism business. So how much revenue contribution of your tourism business in your Q1 outlook? And looking ahead for the whole fiscal year 2025, how much revenue contribution will that business contribute and also the bottom-line track. Thank you.

謝謝史蒂芬提出我的問題。只是一個關於您的旅遊業務的簡單問題。那麼在您的第一季展望中，您的旅遊業務的收入貢獻是多少？展望2025整個財年，該業務將貢獻多少收入，以及獲利軌跡。謝謝。

Yeah, as for the tourism business, in fiscal year '24, in the last year, the revenue was RMB380 million. And in fiscal year '25, we expect the revenue of the whole year will be somewhere around RMB1.2 billion.

是的，就旅遊業務而言，24財年，去年的收入是3.8億元。而25財年，我們預計全年收入將在12億元人民幣左右。

So this is our expectations. And in the Q1, I think the revenue growth of the tourism business will be somewhere around 180% year over year, just a big number.

所以這是我們的期望。在第一季度，我認為旅遊業務的收入年增將在180%左右，這是一個很大的數字。

Thank you, Stephen. And also, on the bottom line, how much will that impact?

謝謝你，史蒂芬。而且，從根本上來說，這會產生多大的影響？

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 business still in the pace of the investment.

因為我們今年和去年在 25 財年才剛開始旅遊業務，所以我認為我們將遭受損失，因為我們開始業務時仍以投資的速度進行。

But I think in the fiscal year '26, the tourism business will be profitable. We believe the loss of the tourism business in fiscal year '25 will be somewhere around RMB100 million. This is our expectations.

但我認為在26財年，旅遊業務將會獲利。我們認為25財年旅遊業務的損失將在1億元人民幣左右。這是我們的期望。

All right. Thank you. That's very helpful.

好的。謝謝。這非常有幫助。

Thank you.

謝謝。

(Operator Instructions) DS Kim, JPMorgan.

（操作員指令） DS Kim，摩根大通。

Hello, sir. Hi, Sisi. Good evening. Thanks for taking my question. I just have a one quick follow-up, if I can. Would you have any comment on the recent regulatory environment given the market concerns and whatnot?

你好先生。嗨，茜茜。晚安.感謝您提出我的問題。如果可以的話，我只會進行一次快速跟進。考慮到市場擔憂等因素，您對近期的監管環境有何評論？

And as we all know, there was a public consultation paper on the tutoring policy, I think, back in February or end of January -- early Feb. 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, it would be appreciated. Thank you.

眾所周知，我想早在二月或一月底——二月初就有一份關於補習政策的公眾諮詢文件。事色彩來自當地監管機構？如果您能分享，我們將不勝感激。謝謝。

I think we haven't seen any new regulations. And as I said, I think the regulation has no change. And as the education industry leader, we comply with the regulations, as always, in the last three years.

我認為我們還沒有看到任何新的規定。正如我所說，我認為法規沒有變化。作為教育產業的領導者，我們在過去的三年中一如既往地遵守法規。

And I think going forward, we expect the regulation environment will be stabilized in the coming new year or even the year after.

我認為展望未來，我們預期監管環境將在新的一年甚至後年趨於穩定。

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 Yuhui Tongxing and whatnot, if you could share? If not, totally fine, but just let me try. Thank you.

謝謝你，先生。如果我可以跟進的話，我想你已經討論過有一次性的事情。如果可以的話，您能否量化一下，僅出於建模目的，在過去的第四季度中，您認為宇輝同興之類的一次性影響大致上有多少？如果沒有，完全沒問題，但讓我試試看。謝謝。

Yeah. But DS, I'm afraid I'm unable to share the detailed numbers because I think the East Buy will announce their earnings in late August. So I think in the earnings call of the East Buy, I think the management of East Buy will share more color about the numbers of this -- of the questions you asked in August.

是的。但DS，恐怕我無法分享詳細的數字，因為我認為東買將在八月下旬公佈他們的財報。因此，我認為在東買的財報電話會議上，我認為東買的管理層將分享更多有關您在八月份提出的問題的數字的信息。

Okay, sir.

好的，先生。

Yeah. Thank you.

是的。謝謝。

Thank you, sir. Thank you very much.

謝謝你，先生。非常感謝。

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 Yang, for his closing remarks.

謝謝。我們現在電話會議即將結束。現在我請新東方執行總裁兼財務長楊志強致閉幕詞。

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。如果您有任何其他問題，請隨時與我或我們的任何投資者關係代表聯繫。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。