On the afternoon of August 1st, the Tik Tok account of Dongfang Screen's self-operated store, which had been closed for many days, reopened. Although it was suspended for four days from the 26th to the 29th, it did not seem to have much impact. According to the disclosure of Dongfang Selection, the single-day sales on July 29 have reached 35 million yuan.
The long-term stable development of Dongfang Selection also benefits New Oriental. On the same day that the Douyin live broadcast room of "Oriental Selected Self-operated Products" issued a suspension notice, New Oriental released its financial report for the fourth quarter and full year of fiscal year 2023.
According to the financial report, as of May 31, 2023, New Oriental’s annual net revenue was US$2.998 billion; operating profit was US$190 million, compared with a loss of US$980 million in the same period last year; net profit attributable to shareholders was US$180 million, compared with a loss in the same period last year. $1.19 billion.
Turning losses into profits in fiscal year 2023 is inseparable from New Oriental's multi-faceted business layout, giving it a leading edge in the industry. But in the case of increasingly fierce market competition, can New Oriental continue to maintain high growth? What kind of achievements can be achieved by developing new fields? From this financial report, we may be able to find some answers.
The recovery of demand drives the double increase of revenue and net profit, and New Oriental firmly sits in the top seat
The financial report for the fourth quarter of fiscal year 2023 shows that New Oriental achieved net revenue of US$860.6 million in the fourth quarter, a year-on-year increase of 64.2%; operating profit increased by 145.5% to US$48.1 million; net profit attributable to shareholders increased by 115.3% year-on-year to 29.0 million Ten thousand U.S. dollars.
In terms of business, New Oriental’s income from overseas test preparation in the fourth quarter of fiscal year 2023 increased by about 52% year-on-year, and its overseas consulting business increased by 6% year-on-year. 34%.
In addition, new businesses also achieved good results. As of May 31, 2023, non-disciplinary tutoring business has been laid in about 60 cities, and attracted 629,000 students to sign up in the fourth quarter of fiscal year 2023. At the same time, New Oriental's intelligent learning systems and equipment have also been promoted to nearly 60 cities, and the number of new active paying users reached 99,000 in the fourth quarter.
It is worth mentioning that the performance of Dongfang Selection, a subsidiary of New Oriental, is stable. According to the data of Gray Dolphin, the average daily merchandise transaction volume of Dongfang Selection from March to July 2023 is 2529/2754/3096/2581/23.12 million yuan respectively.
Recently, the self-operated APP of Dongfang Selection has launched a live broadcast. On July 17, the exclusive broadcast of Heilongjiang Tour has 46,000 online people. On July 29, the sales volume exceeded 35 million. Although Dongfang Selection's self-operated product stores and Dongfang Selection's self-owned product live broadcast room were suspended for three days (26th to 29th) due to the requirements of the rules, after the re-broadcasting, Dongfang Selection still showed the Strong fan stickiness and differentiated content value.
It can be seen that the substantial growth of New Oriental's total revenue is not only boosted by its core business, but also driven by new business and Oriental Selection.
Comparing the various business segments, the growth of New Oriental's core business of overseas test preparation and domestic university test preparation is particularly obvious. New Oriental said that before the university business was less vigorous, but the number of college entrance examinations in the past two years has reached a record high, so the related demand has been released quickly.
According to the daily economic news, the number of applicants for the national college entrance examination in 2023 will be 12.91 million, which will increase year by year and hit a record high. Previously, the number of applicants for the college entrance examination in my country in 2018 was only 9.75 million, and then the number of applicants for the college entrance examination increased to 10.31 million in 2019, 10.71 million in 2020, 10.78 million in 2021, and 11.93 million in 2022.
The reasons for the growth of the overseas test preparation and overseas consulting sectors are similar to the university test preparation business. Kai Tak study abroad customer service data shows that the number of applications for study abroad has continued to rebound in the past two years after bottoming out in 2020. In 2022, the overall application volume has increased by 23.4% compared with 2021. Compared with the same period in 2022, the volume will increase by 45%.
In the context of growing market demand, New Oriental, as a leading institution in the field of education, directly benefits from its brand and capabilities in teaching and research services.
In addition to the existing business, New Oriental has recently officially laid out the cultural and tourism sector. According to the data of the National Enterprise Credit Information Publicity System, on July 19, Beijing New Oriental Cultural Tourism Co., Ltd. was officially established.
From New Oriental to Dongfang Selection, to the current layout of the cultural and tourism industry, and the replacement of old and new businesses, what kind of surprises will Yu Minhong, who has never failed, bring to the market this time?
Can the silver-haired economy create the next "Oriental Selection"?
As can be seen from the financial report, New Oriental expects that in the first quarter of fiscal year 2024 (June 1, 2023 to August 31, 2023), its total revenue will be US$983.2-1005.5 million, an increase of 32%-35% year-on-year. %.
So, how will New Oriental achieve the expected growth in the next quarter? Judging from its recent actions, Dongfang Selection and the steady growth of its core business are one aspect, while the recent new layout of the cultural and tourism industry has given the market more imagination.
The last time New Oriental’s cross-border layout created Dongfang Selection, and then successfully built it into the top stream in the live streaming industry, which is a milestone for New Oriental looking for new growth poles. This time, entering the cultural and tourism industry, it seems that the road ahead is hazy, but in fact, all signs are paving the way for New Oriental.
First of all, New Oriental's layout of cultural tourism business mainly focuses on middle-aged and elderly people. In recent years, the middle-aged and elderly people are no longer limited to health and elderly care, but pay more attention to online shopping and tourism. The report on the development of China's big health industry shows that in the first eight months of 2022, the number of travel transactions, the number of shopping users, and the per capita order volume of "silver-haired people" will be three times, 1.8 times, and 1.7 times that of 2018, respectively.
In addition, in the consumption structure of the elderly group in China, tourism and leisure account for a large proportion. According to China Business Intelligence Network, tourism and leisure accounted for as high as 56.99% of the consumption structure of the elderly group. With the intensification of aging population, the tourism market has huge potential for development, which is an opportunity for New Oriental.
Source: China Business Intelligence Network
Secondly, at present, the elderly are pouring into the tourism market, and most of their travel motives are social or hobbies. Therefore, they pay more attention to the content and cultural attributes of travel, pay more attention to the experience and feelings during the travel process, and have higher requirements for the overall quality and service. will be higher.
New Oriental has keenly captured these changes. In the early days, the popularity of Dong Yuhui's "selling rice" live broadcast remained high. This was a typical example of the success of "education + agriculture" at that time. The live broadcast with goods full of cultural heritage can not only show the charm of knowledge, but also attract and retain a large number of consumers. Now, the intellectual power of New Oriental will further infiltrate into the cultural and travel industry, presenting a new trend of integration.
In April this year, Yu Minhong, the founder of New Oriental, mentioned: "In the future, if our cultural tourism business is developed, we will train a group of tour guides who can give lectures."
The tour guide who "can give lectures" is the uniqueness of New Oriental. New Oriental's teachers are good at creating interesting knowledge content, and can awaken the audience's humanistic feelings. This advantage is applied to the silver-haired tourism economy, or it will become a powerful driving force for the rapid growth of New Oriental's cultural tourism business.
As a matter of fact, New Oriental has taken action on the layout of cultural tourism as early as November last year. The sub-account "Dongfang Selection Watching the World" incubated by Dongfang Selection has already had 3.024 million fans as of August 5, 2023. Hunan, Sichuan, Guangzhou and other 14 location live broadcast collections, among them, the total broadcast volume of the collection of watching the world's Yunnan trip exceeds 60 million, and the total broadcast volume of Guangzhou trip and Hainan trip exceeds 30 million.
The popularity of live broadcasts continues to rise, and the effect of bringing goods is not weak. In the live broadcast in Yunnan in February this year, Dong Yuhui and other anchors broadcast cultural and tourism products with mirrored goods. The cumulative sales of local tourism products in Yunnan were 105 million yuan, and the total number of viewers exceeded 8.8 million.
In the special live broadcast in Zhangjiajie in April this year, anchors Dundun and Tongtong were selected by Dongfang to promote Zhangjiajie cultural tourism products to netizens across the country through the cloud tourism method of "live broadcast + cultural tourism". According to public data, this three-day live broadcast continued to dominate the Douyin national group buying list with goods, with a total of more than 25,000 orders and a total sales of over 31.9 million yuan.
In addition, Yu Minhong, who frequently appears on camera, is also a big IP himself, and the drainage effect it brings to the live broadcast cannot be underestimated. From the past live broadcasts of cultural tourism, we can see that the value that New Oriental’s layout of cultural tourism can leverage is not small, and its capabilities in supply chain control and customer acquisition will continue to be strengthened in the future. Therefore, New Oriental's layout in the cultural and travel industry seems to be a new attempt, but it is actually making steady progress.
epilogue
Judging from the results obtained by New Oriental in the fourth quarter and the whole year of fiscal year 2023, New Oriental has strong growth potential. Now that New Oriental is once again crossing borders, laying out the cultural and tourism industry, coupled with the re-launch of Dongfang Selection, it is expected that in the future, while accelerating the growth of its main business, it is expected to reap the dividends brought by the silver-haired tourism economy and achieve continuous improvement in performance.
From cultural education to live broadcast with goods, to cultural tourism, every step of New Oriental is unexpected, but full of surprises. Better news may be in the not-too-distant future.
Source: US Stock Research Institute