$New Oriental EDU & Tech(EDU.US) first take: Dolphin 君's feedback on Q1 performance is not good. Although the profit during the period was slightly above expectations due to an increase in gross margin and restraint in management expenses, the guidance for Q2 education revenue growth of 25% to 28% is lower than the market expectation of over 30%.

From the performance of various segments in Q1, half of the blame for the growth miss should be attributed to the study abroad business, but the fatal issue lies in the other half, as there may also be concerns about a slowdown in demand for quality education and training:

(1) At the end of September, the company communicated that the study abroad exam preparation was affected by a decline in consumer spending power, leading to a weakened demand for high-priced 1V1 teaching, which accounts for 20%-30% of the study abroad exam preparation revenue.

(2) Although new businesses (quality education and training, learning machines) are still in a high growth phase, growing 49% year-on-year in Q1, the growth rate of enrollment in quality education and training has significantly slowed, with only a 10% year-on-year increase. Even if the average transaction value increases, it means that the revenue growth rate for quality education and training in the next quarter may fall back to over 20%, making it difficult to continue matching growth valuations.

Therefore, among the above two points, Dolphin 君 is more concerned about (2). Are there any occasional factors? Is it a result of the company's proactive slowdown, or is it caused by intensified industry competition? Specific explanations can be followed in the upcoming conference call. $NEW ORIENTAL-S(09901.HK)