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1、36322824203mDDeutsche BankMarkets ResearchRatingBuyAsiaChinaCompanyNew OrientalDate15 October 2012Forecast ChangeConsumerEducation ServicesReutersBloombergExchange TickerPrice at 12 Oct 2012 (USD)Price target - 12mth (USD)52-week range (USD)17.1424.0030.20 - 9.50EDU.NEDU USNYSEDUHANG SENG INDEX21,14
2、8SEC gives the all clear; reinstatingwith Buy and $24 target priceTrue gold does not fear the fireAfter a formal three-month SEC investigation, EDU has come throughunscathed. This follows an independent committees formal refutation of theshort seller report several weeks ago. At a near historically-
3、low valuation of 14xforward PER, based on more conservative estimates, we see a clear entry pointfor the stock after the share price correction, given the intact long-term sectorprospects and EDUs undoubted leadership in the space. We reinstate with aBuy and US$24 target price as our top pick in the
4、 China education sector.Catalyst: SEC investigation concluded in favor of EDUVivian HaoResearch Analyst(+852) 2203 Paul Ginocchio, CFAResearch Analyst(+1) 415 617-Key changesEDU received notice from the SEC on 11 October that it has no objection tothe consolidation of VIE into the on-shore WOFE subs
5、idiaries or to thecompanys organizational structure. EDU also filed its FY12 20-F on 12 Octoberwith no restatements to past financials. We believe a major overhang hasRatingTarget pricePrice/price relativeNA NA BuyUS$24therefore been removed. In our view, market sentiment on the sector andChina ADRs
6、 with concerns regarding VIE structures will improve.Long-term fundamentals intactDespite EDU guiding conservatively on the forthcoming FY1Q13 figures (due toreport on 29 October), the biggest quarter (70% of full-year earnings), webelieve the long-term prospects for Chinas private education market
7、remainattractive. In our view, EDU, as the leading player with an established brandnationwide, remains a compelling secular growth story for long-term investors.1612810/104/11New Oriental10/114/12New target price at US$24 (41% upside potential); reinstating with a BuyBased on more conservative margi
8、n assumptions (we assume GAAP netHANG SENG INDEX (Rebased)Performance (%) 1m12mmargin will be flattish at 1516%), the stock is still trading at a PER of 14x (10xex-cash) CY13E post a 14-15% cut in net income for FY13/14E. We derive ourAbsoluteHANG SENG INDEX18.25.3-24.411.1-43.515.3new target price
9、of US$24 by applying a 20x PER against CY13E GAAP EPS ofUS$1.20, and a PEG of 0.8x (low end of its historical trading range of 0.81.0)with a moderated earnings CAGR of 26% (previously 33%). With the SECinvestigation concluded, we see a clear entry point at this level. Reinstatingrating at Buy. Key r
10、isks: 1) macro softness; 2) intensifying competition.Forecasts And RatiosYear End May 31Sales (USD)Reported NPAT (USD)Reported EPS FD (USD)OLD DB EPS FD (USD)% ChangeDB EPS Growth (%)PER (x)Yield (net) (%)2011A557.9101.80.650.650.0%29.839.30.02012A771.7132.70.850.89-4.9%29.731.90.02013E1,002.4154.10
11、.981.15-14.5%16.217.42.02014E1,313.5210.41.341.59-15.5%36.512.82.7Source: Deutsche Bank estimates, company dataB EPS is fully diluted and excludes non-recurring items_Deutsche Bank AG/Hong KongAll prices are those current at the end of the previous trading session unless otherwise indicated. Prices
12、are sourcedfrom local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subjectcompanies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus,investors should be aware that the firm may have a conflict of interest
13、that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES ANDANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012.1215 October 2012Education ServicesNew OrientalModel updated:15 Oct
14、ober 2012Fiscal year end 31-May20092010201120122013E2014ERunning the numbersFinancial SummaryAsiaChinaEducation ServicesNew OrientalDB EPS (USD)Reported EPS (USD)DPS (USD)BVPS (USD)Weighted average shares (m)Average market cap (USDm)0.400.400.002.31492,1310.500.500.002.81512,8720.650.650.003.71533,9
15、310.850.850.004.41554,1780.980.980.345.11552,6261.341.340.466.01552,626Reuters: EDU.NBloomberg: EDU USEnterprise value (USDm)1,8162,4523,3143,3721,7111,513Valuation MetricsBuyP/E (DB) (x)P/E (Reported) (x)36.036.037.937.939.339.331.931.917.417.412.812.8Price (12 Oct 12)Target Price52 Week rangeMarke
16、t Cap (m)USD 17.14USD 24.00USD 9.50 - 30.20EURm 2,025USDm 2,626P/BV (x)FCF Yield (%)Dividend Yield (%)EV/Sales (x)EV/EBITDA (x)EV/EBIT (x)5.993.80.06.225.429.88.334.30.06.327.331.77.834.30.05.929.434.75.974.30.04.423.428.93.335.82.01.710.211.92.8410.22.71.26.67.5Company ProfileIncome Statement (USDm
17、)New Oriental Education & Technology Group is the largestlisted private educational services provider in China interms of number of program offerings, studentenrollments and geographical coverage. The companystarted operations in 1993 when founder Michael MinhongYu (currently the companys chairman a
18、nd CEO) openedthe first school in Beijing to offer TOEFL test preparationcourses. New Oriental was listed on the New York StockExchange in September 2006. Its headquarters is inBeijing.Price Performance363228242016128Sales revenueGross profitEBITDADepreciationAmortisationEBITNet interest income(expe
19、nse)Associates/affiliatesExceptionals/extraordinariesOther pre-tax income/(expense)Profit before taxIncome tax expenseMinoritiesOther post-tax income/(expense)Net profitDB adjustments (including dilution)DB Net profit29318272100617001687006106138624090120776000846007807855833711316196130011108001020
20、10277247014426111727000143110013301331,00261716724014326000169150015401541,3148222302802013300023423002100210Oct 10Jan 11Apr 11Jul 11Oct 11Jan 12Apr 12Jul 12Cash Flow (USDm)Cash flow from operations97142216249201336New OrientalMargin Trends28242016HANG SENG INDEX (Rebased)Net CapexFree cash flowEqui
21、ty raised/(bought back)Dividends paidNet inc/(dec) in borrowingsOther investing/financing cash flowsNet cash flowChange in working capital-1681-3000-54610-19123-1800-792637-47169600-1393681-68181100-7111169-481530-520510523-662700-720019897Balance Sheet (USDm)0910111213E14ECash and other liquid asse
22、ts3154206178049131,111EBITDA MarginGrowth & Profitability50403020100EBIT Margin302520151050Tangible fixed assetsGoodwill/intangible assetsAssociates/investmentsOther assetsTotal assetsInterest bearing debtOther liabilitiesTotal liabilitiesShareholders equityMinoritiesTotal shareholders equity1107037
23、469011811835103511187052596016916942804281601607086302892895740574204621131,12904384386900690231621341,28604864868000800268621641,552061361393909390910111213E14ENet debt-315-420-617-804-913-1,111Sales growth (LHS)ROE (RHS)Key Company MetricsSolvency0-20-40-60-80-100-120-140Sales growth (%)DB EPS gro
24、wth (%)EBITDA Margin (%)EBIT Margin (%)Payout ratio (%)ROE (%)Capex/sales (%)Capex/depreciation (x)Net debt/equity (%)45.626.924.420.80.018.85.51.5-89.732.026.523.220.00.020.05.11.6-98.144.429.820.217.10.020.38.92.9-107.538.329.718.615.10.021.09.32.6-116.429.916.216.714.333.820.74.82.0-114.131.036.5
25、17.515.333.824.25.02.3-118.40910111213E14ENet interest cover (x)nmnmnmnmnmnmNet debt/equity (LHS)Vivian HaoNet interest cover (RHS)Source: Company data, Deutsche Bank estimates+852 2203 6241Page Deutsche Bank AG/Hong Kong251)2)15 October 2012Education ServicesNew OrientalTrue gold does not fear thef
26、ireNo objection or indictment by SECWhen EDU announced it had received a comment letter from SECs Division ofCorporation Finance, primarily regarding its VIE structure and consolidation of financialsfrom VIE to its WOFE subsidiaries during their FY4Q12 earnings release on 17 July2012, the stock fell
27、 35% on the day and although it has recovered since then, it is stilldown 23% compared with the pre-investigation level. Conservative guidance at the Q4results briefing probably contributed to the weakness as well.Figure 1: EDU share prices downward thrust since SEC investigation announcementUS$30Br
28、oker report indicate SEC20SECinvestigationannouncedEDU Self-investigation at Q&Asession; independentinvestigation completedwith no findings agaist EDUrefutal onshort seller1510Short sellerreport50Source: company data; Bloomberg; Deutsche Bank.On 11 October 2012, EDU was informed by the SEC that ther
29、e were no objectionsbased on further disclosures submitted to the SEC in response to the investigation. EDUannounced this after market-close on Friday.EDU has just filed its 20-F, and we note the following key findings:No restatement of historical financials is required or plannedService fees up-str
30、eamed to WOFE from the VIE (service fees that the fiveonshore WOFEs received from New Oriental China and schools andsubsidiaries) under all the service agreements was US$59.4m, US$65.7m andUS$118.6m, respectively, from FY1012, which is 76%, 64% and 89% ofFY1012 reported consolidated group net earnin
31、gs, which falls in the normalrange for EDU historically of 4781% (as suggested by EDU). This calculationis based on a) up-streaming of service fees is on a rolling basis which can takemany years, b) deferred revenues and part of cash in-flow collected in schoolsneeds to stay with the local entities
32、for daily operations or requires further cashflow to be up-streamed. The SEC has no objection to this consolidation.Deutsche Bank AG/Hong KongPage 33)4)5)15 October 2012Education ServicesNew OrientalDetails of service agreements disclosed. There are four types: 23 NewEnrollment System Development Se
33、rvice Agreements; 95 Other OperatingService Agreements; 142 Sale of Educational Software and other TrademarkLicense Agreements. This disclosure alleviates some concerns in the marketregarding whether these agreements had been arranged appropriately.Further disclosure of franchisee operation under Po
34、p kids brand added. In2010, 2011 and 2012, EDU recognized revenues in an aggregate amount ofUS$35,000, US$249,000 and US$811,000, which is nominal in the context ofgroup revenue.Optimized organizational structure: New Oriental China (VIE) is now solelyowned by Michael Yu instead of 10 shareholders p
35、reviously. The transactionwas completed in early 2012 before the SEC investigation. This amendmenthas simplified and strengthened the VIE structure, which was complex when itwas established back in 2006.Figure 2: Organization structure by FY2011Source: Deutsche BankPage 4Deutsche Bank AG/Hong Kong6)
36、7)15 October 2012Education ServicesNew OrientalFigure 3: Current organization structure by FY12Source: Deutsche BankPower of attorney clause added. On 23 April, Century Friendship (wholly-owned by Michael Yu), executed revocable powers of attorney to the fiveWOFEs, whereby the five WOFEs are entrust
37、ed as proxies to exercise rights asthe shareholders of the VIE. This practice is employed by other companieswithin the education industry and is viewed as better for minorities.Taxation. Due to new circulars issued by the Chinese government (within thelast 6-12 months), EDUs subsidiaries, which were
38、 previously subject tobusiness tax, have since become subject to VAT as well. While the companynotes that this has not had a material impact on the tax positions of its entities,the applicable rates are increasing.EDU has 22 schools classified as not-for-profit, 24 for profit and the remainderare un
39、classified. Not-for-profit schools, including the BJ School whichcontributes 30% earnings to group, are tax exempt. Tax treatment for profitschools varies across cities. EDU also indicated that among its top fourrevenue-generating schools, three are subject to the standard 25% tax rate andone is exe
40、mpt. Additionally, two of EDUs operating subsidiaries will see taxDeutsche Bank AG/Hong KongPage 515 October 2012Education ServicesNew Orientalrates increasing from 0% to 12.5% over the next few years. We believe wehave captured these taxes in our current estimates. All relevant tax certificateshave
41、 been reviewed and approved by SEC through Deloitte.Based on the above, we believe investors major concerns regarding the SECinvestigation have been properly addressed and resolved, despite the fact that thenewly filed 20-F is still under review as part of the normal process.Short seller allegations
42、 already refutedSubsequent to the allegations raised by a short seller on 18 July 2012, EDU establisheda special committee on 20 July 2012 to conduct an independent review. The specialcommittee consisted of three independent board directors and was assisted bySimpson Thacher & Bartlett LLP.The commi
43、ttee focused on three core allegations related to franchising, taxation andVIE consolidation. Details of the allegations and conclusions of the committee are asfollows.Figure 4: Allegations raised and findingsAllegations raised by Muddy WaterSome or all of EDUs learning centers areactually not owned
44、 by the company butfranchisedEDUs financial statements misrepresent theenterprise income tax paid by its BeijingoperationInaccurate consolidation of VIEsCommittee findings and conclusionEDU has ownership interests in 55 schools and associatedlearning centers. In addition, the company has entered int
45、obrand cooperation agreements with 21 third parties which isimmaterial and accurately accounted.Significant evidence to support the allegation was not found.SEC was then reviewing EDUs consolidation of VIE results, thusthe committee was still working on the issue.Source: Company dataHence, on 30 Sep
46、tember 2012, EDU announced that the special independentcommittee was able to dismiss all three allegations raised by the short seller report.Page 6Deutsche Bank AG/Hong Kong1)2)15 October 2012Education ServicesNew OrientalFundamentals intact; we assume more conservative marginsTo recap, during the F
47、Y4Q12 results briefing, EDU gave conservative guidance on thetop line with a range of 26%31% YoY, quoting difficult comps and macro headwindsagainst its high-end product offerings. Nonetheless, deferred revenue at 31 May was up38% YoY, which is a key positive leading indicator for its operations. Al
48、so, based on ourchecks, we believe EDUs enrollments for the quarter are on track.Figure 5: Quarterly earnings forecastsYear to 31 M ayDB Estim atesU S$ m illionsN et revenue% YoY growthCost of revenues% of net revenueGross profit% gross margin1Q1227241.4%-9334.1%17965.9%2Q1213238.0%-6146.3%7153.7%3Q
49、1217431.7%-7241.2%10358.8%4Q1219340.7%-7840.4%11559.6%FY1277238.3%-30439.4%46860.6%1Q13E34627.3%-11433.0%23267.0%2Q13E18540.2%-8345.0%10255.0%3Q13E22428.4%-9442.0%13058.0%4Q13E24727.9%-9739.1%15160.9%FY13E1,00229.9%-38838.7%61461.3%FY14E1,31431.0%-49537.7%81962.3%OpexG& A% of net revenue-5620.6%-503
50、8.1%-5833.2%-7237.1%-23630.6%-7922.8%-7239.2%-7935.3%-9940.0%-33032.9%-44133.6%S& M-29-25-28-34-115-141-176% of net revenueEBIT (GAAP)% EBIT marginEBIT (non-GAAP)% EBIT marginPBTN et profit (GAAP)% net marginN et profit (non-GAAP)% net margin10.5%9534.8%10237.3%1009133.4%9835.9%18.6%(4)-3.0%00.2%232
51、.5%85.7%16.1%179.5%2212.7%242212.8%2816.1%17.6%94.9%178.7%17168.4%2412.3%14.9%11715.1%14118.3%14313317.2%15720.3%0.0%11834.0%12335.6%12411332.7%11934.3%0.0%(2)-1.0%42.0%542.4%105.4%0.0%188.2%2410.7%252310.2%2812.6%0.0%93.8%156.0%15145.6%197.9%14.1%14414.3%16616.5%16915415.4%17617.6%13.4%20115.3%2241
52、7.1%23421116.1%23417.8%GAAP EPS (US$)BasicDiluted$0.59$0.58$0.02$0.02$0.14$0.14$0.10$0.10$0.86$0.85$0.73$0.72$0.03$0.03$0.15$0.15$0.09$0.09$1.00$0.98$1.36$1.35non-GAAP EPS (U S$)BasicDiluted$0.63$0.62$0.05$0.05$0.18$0.18$0.15$0.15$1.01$1.00$0.77$0.76$0.06$0.06$0.18$0.18$0.13$0.12$1.14$1.12$1.51$1.49
53、Source: Deutsche Bank estimates, Company dataHowever, we believe margin pressure on EDU remains and is likely persist in FY13 dueto:Market conditions: Low entry barriers in K-12 segment leading to significantlyintensifying competition.Company-specific factors: Unlike its established test-prep busine
54、ss, EDUs K-12 segments performance is currently less than satisfactory, given limitedexperience in non-English training while aggressively expanding.As such, based on more conservative assumptions on timing and the magnitude ofmargins reversion, we expect EDU to shift from its current 30/30 growth m
55、odel to a30/20 growth model (top-line/bottom-line YoY growth). We adjust our forecasts for EDUas follows:Deutsche Bank AG/Hong KongPage 715 October 2012Education ServicesNew OrientalNet revenuesReduce by 3.9%/6.9% to US$1.0bn/1.3bn for FY13/14E, due to 1)macro softness leading to moderated high tick
56、et-size offering sales,and 2) moderated ASP growth after two years of aggressive pricehikes.+ 0.7%/+4.3% cf. consensus estimates of US$995m/1.3bn.Indicates a 30.3% three-year FY12-15E CAGR cf. previous estimate of34.6%Gross profitReduce by 5.6%/8.1% to US$617m/822m for FY13/14E, due to 1)lower stude
57、nt-to-teachers ratio adds pressure on margin, and 2) staffcosts are soaring due to intensive competition for talent+ 2.1%/+10.5% cf. consensus estimates of US$604m/743m.Generates a margin of 61.5%/62.5% -110bps/-80bps cf. previousestimates of 62.6%/63.3%Indicates a 32% three-year FY12-15E CAGR cf. p
58、revious estimate of36%EBIT GAAPReduce by 16.1%/16.5% to US$143/201m for FY13/14E, assuming K-12 segment margin for EDU sees no improvement, which drags downgroup margin level-4.5%/+4.1% cf. consensus estimates of US$150m/193m.Generates a margin of 14.3%/15.3% -210bps/-170bps cf. previousestimates of
59、 16.4% and 17%Indicates a 28% three-year FY12-15E CAGR cf. previous estimate of36%EBIT non GAAPReduce by 14%/15% to US$166m/224m for FY13/14EGenerates a margin of 16.5%/17.1%, -200bps/-160bps cf. previousestimates of 18.5% and 18.7%Indicates a 24% three-year FY12-15E CAGR cf. previous estimate of33%
60、As a result:Net income GAAPReduce by 14.1%/14.8%to US$154m/210m for FY13/14E-3.4%/+7% cf. consensus estimates of US$160m/197m.Generates a margin of 15.4%/16.1% -180bps/-140bps cf. previousestimates of 17.2% and 17.5%Page 8Deutsche Bank AG/Hong Kong15 October 2012Education ServicesNew OrientalIndicat
61、es a 23% three-year FY12-15E CAGR cf. previous estimate of31%Net income non GAAPReduce by 12.6%/13.7% to US$176m/234m for FY13/14E-3.6%/+1.6% cf. consensus estimates of US$183m/230m.Generates a margin of 17.6%/17.8% -160bps/-150bps cf. previousestimates of 19.2% and 19.3%Indicates a 20% three-year F
62、Y12-15E CAGR cf. previous estimate of28%Figure 6: EDU earnings revisionY e ar to 3 1 MayFY13EFY14EU S$ mFY12Ol dNew% ch an ge Con se n su s % de l taOl dNew% ch an ge Con se n su s % de l taRevenueGross profitEBITEBIT (Non-GAAP)Net income (GAAP)Net income (Non-GAAP)7724701171411331571,04365317119317
63、92021,002617143166154176-3.9%-5.6%-16.1%-14.2%-14.1%-12.6%995604150na1601830.7%2.1%-4.5%na-3.4%-3.6%1,4128942412642482711,314822201224210234-6.9%-8.1%-16.5%-15.0%-15.0%-13.7%1,259743193na1972304.3%10.5%4.1%na7.0%1.6%EPAD S (G AAP)diluted$0.85$1.15$0.98-14.5%$1.04-5.5%$1.59$1.34-15.5%$1.294.0%EPAD S
64、(N on G AAP)diluted$1.00$1.29$1.12-13.0%$1.14-1.5%$1.74$1.49-14.2%$1.3510.6%Margi n s %Gross marginEBIT marginEBIT margin (Non-GAAP)Net margin(GAAP)Net margin (Non-GAAP)60.9%15.1%18.3%17.2%20.3%62.6%16.4%18.5%17.2%19.3%61.5%14.3%16.5%15.4%17.6%-1.1%-2.1%-2.0%-1.8%-1.7%60.7%15.1%na16.0%18.4%0.8%-0.8%
65、na-0.7%-0.8%63.3%17.0%18.7%17.5%19.2%62.5%15.3%17.1%16.0%17.8%-0.8%-1.7%-1.6%-1.5%-1.4%59.0%15.3%na15.6%18.3%3.5%0.0%na0.4%-0.5%Source: Deutsche Bank estimates, Bloomberg Finance LP, Company dataRevised P/E-based valuation at $24; reinstating with BuyOur previous valuation for EDU (prior to the SEC
66、investigations) was based on a 26xCY13E giving a PE-derived target price of US$36.5 per share. We calculated our targetPE using a three-year EPS CAGR of 33% and 0.8x PEG based on the consumer staplenature of the industry. Given the more competitive industry environment and EDUsrelative weakness in t
67、he K-12 tutoring segment (37% of revenues), we have reassessedthe company valuation, and thus derive our new target price of US$24 (-34% vs.previous target) on a more cautious note with our CY12-14E earnings CAGR forecastlowered to 27% and target PEG constant.Based on more conservative margin assump
68、tions (we now assume GAAP net marginwill be flattish within a 1516% range), the stock is still trading at a PER of 14x (10x ex-cash) CY13E post a 14-15% cut in net income for FY13/14E. We derive our new targetprice of US$24 by applying a 20x PER against CY13E GAAP EPS of US$1.20, and a PEGof 0.8x (l
69、ow end of its historical trading range of 0.81.0) with a moderated earningsCAGR of 26% (previously 33%). With the SEC investigation concluded, we believe aclear entry point for EDU has emerged, given our positive view on the long-termpotential for Chinas private education sector and EDUs brand power
70、. We note that theDeutsche Bank AG/Hong KongPage 9x15 October 2012Education ServicesNew Orientalstocks three-year historical average forward PER is 30x. We reinstate coverage on EDUwith a Buy rating and as our top pick among education names in China.Figure 7: EDU three-year historical trading forwar
71、d PE454035302520151053-year avg. PEForward PEOct-09Apr-10Oct-10Apr-11Oct-11Apr-12Oct-12Source: Bloomberg; Deutsche BankPage 10Deutsche Bank AG/Hong Kong15 October 2012Education ServicesNew OrientalFigure 8: Three-year PE band chartUS$Pri ce Cl osePER 25PER 10PER 30PER 15PER 35PER 2040.0035.0035x30x3
72、0.0025x25.0020x20.0015x15.0010.005.0010xOct-09Apr-10Oct-10Apr-11Oct-11Apr-12Oct-12YE M ayRev. growth (YoY)EBIT marginNI growth (YoY)ROEFY1032.0%20.0%27.5%20.0%FY1144.4%17.1%30.8%20.3%FY1238.3%15.1%30.4%21.0%Source: Deutsche Bank estimates, Company data, Bloomberg Finance LPDeutsche Bank AG/Hong Kong
73、Page 1115 October 2012Education ServicesNew OrientalKey downside risks include:Macro softness which would pressurize student enrolments and course feesIntensifying competitionScope for further investigations should the 20-F not prove satisfactory to theSECFigure 9: Peer comp as of 15 October 2012Com
74、 panyT1 tickerPrice(U SD)M kt cap(U SDm )2011P/E (x)2012EP/B (x)2013E 2011 2012E 2013EEPS CAGR(2012-14E)PEG (x)2011E 2012ENew Oriental Education & Technology Group Inc. EDU-U S17.142,71535.417.614.45.83.42.727%1.30.7Tal Education GroupXueda Education GroupChinaedu CorporationChina Distance Education
75、 Holdings LimitedAmbow Education Holding Ltd.Chinacast Education CorporationXRS-U SXU E-U SCEDU-USDL-USAMBO-U SCAST-58.563.176.093.302.610.36194209109112642050505015.448.37.620.716.014.711.68.20.516.511.014.0nm4.50.41.11.50.90.90.31.00.91.2nmnm0.10.10.81.1nmnm0.1nm30%33%nmnm63%nmnmnmnmnm0.8nm0.70.5n
76、mnm0.1nmPeer average34.817.114.04.83.02.428%1.30.6Source: Deutsche Bank estimatess, Thompson One for companies not covered, Company dataPage 12Deutsche Bank AG/Hong Kong66.6.15 October 2012Education ServicesNew OrientalAppendix 1Important DisclosuresAdditional information available upon requestDiscl
77、osure checklistCompanyNew OrientalTickerEDU.NRecent price*17.14 (USD) 12 Oct 12Disclosure*Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companiesImportant Disclosures Required by U.S. RegulatorsDisclosures marked with
78、 an asterisk may also be required by at least one jurisdiction in addition to the United States.See Important Disclosures Required by Non-US Regulators and Explanatory Notes.Deutsche Bank and/or its affiliate(s) owns one percent or more of any class of common equity securities of thiscompany calcula
79、ted under computational methods required by US law.Important Disclosures Required by Non-U.S. RegulatorsPlease also refer to disclosures in the Important Disclosures Required by US Regulators and the Explanatory Notes.Deutsche Bank and/or its affiliate(s) owns one percent or more of any class of com
80、mon equity securities of thiscompany calculated under computational methods required by US law.For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of thisresearch, please see the most recently published company report or visit our global discl
81、osure look-up page on ourwebsite at http:/ CertificationThe views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about thesubject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receiveany c
82、ompensation for providing a specific recommendation or view in this report. Vivian HaoDeutsche Bank AG/Hong KongPage 13SecurityPrice3211.4.2.5.3.6.015 October 2012Education ServicesNew OrientalHistorical recommendations and target price: New Oriental (EDU.N)(as of 10/12/2012)140.00120.00100.00Previo
83、us RecommendationsStrong BuyBuyMarket PerformUnderperformNot RatedSuspended Rating80.00Current Recommendations60.00BuyHold40.0020.00456SellNot RatedSuspended Rating*New Recommendation Structureas of September 9,20020.00Oct 10Jan 11Apr 11Jul 11Oct 11Jan 12Apr 12Jul 12Date18/10/2010:18/01/2011:18/07/2
84、011:Buy, Target Price Change USD100.00Buy, Target Price Change USD119.00Buy, Target Price Change USD150.0018/10/2011:06/07/2012:25/07/2012:Buy, Target Price Change USD37.50Buy, Target Price Change USD36.50No Recommendation, Target Price Change USD0.00Equity rating keyBuy: Based on a current 12- mont
85、h view of totalEquity rating dispersion and banking relationshipsshare-holder return (TSR = percentage change inshare price from current price to projected target priceplus pro-jected dividend yield ) , we recommend thatinvestors buy the stock.Sell: Based on a current 12-month view of total share-ho
86、lder return, we recommend that investors sell thestockHold: We take a neutral view on the stock 12-months4504003503002502001501005056 %11 %38 %16 %5%10 %out and, based on this time horizon, do notrecommend either a Buy or Sell.Notes:BuyHoldSell1. Newly issued research recommendations andtarget price
87、s always supersede previously publishedCompaniesCoveredCos. w/ BankingRelationshipresearch.2. Ratings definitions prior to 27 January, 2007 were:Buy: Expected total return (including dividends)of 10% or more over a 12-month periodAsia-PacificUniverseHold:Expectedtotalreturn(includingdividends) betwe
88、en -10% and 10% over a 12-month periodSell: Expected total return (including dividends)of -10% or worse over a 12-month periodPage 14Deutsche Bank AG/Hong Kong15 October 2012Education ServicesNew OrientalRegulatory Disclosures1. Important Additional Conflict DisclosuresAside from within this report,
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