141.04 0.00 (0.00%)
After hours: 4:49PM EDT
|Bid||138.00 x 1100|
|Ask||147.00 x 1000|
|Day's Range||138.80 - 142.94|
|52 Week Range||94.60 - 153.02|
|Beta (5Y Monthly)||1.28|
|PE Ratio (TTM)||50.72|
|Earnings Date||Jul. 28, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||Sep. 01, 2017|
|1y Target Est||156.24|
It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...
(Bloomberg Opinion) -- Just like the tens of millions of migrant workers stranded by China’s coronavirus lockdowns, hundreds of mainland companies listed in the U.S. are stuck, unable to go home and without a future in their adopted land. They make perfect prey for short sellers.The climate in the U.S. is getting uncomfortable for China Inc. President Donald Trump has renewed his trade-war rhetoric while pointing fingers at Beijing for the Covid-19 outbreak. On Monday, his administration asked a government pension fund to block investment in Chinese stocks. Meanwhile, the spectacular admission that Luckin Coffee Inc., the upstart rival to Starbucks Corp., faked its sales figures has ripped open age-old doubts about accounting standards.Unfortunately, even if these businesses wanted to prove they’re fraud-free, Beijing’s new securities law forbids cooperation with U.S. regulators.Unlike most other nations, China doesn’t allow the Public Company Accounting Oversight Board — an auditor of auditors, set up after the Enron scandal — to inspect the work papers of its U.S.-listed companies. The Securities and Exchange Commission has issued warnings about the quality of these reviews, even when the industry’s biggest names are signing the annual reports (as was the case with Luckin). SEC Chairman Jay Clayton singled China out in a public statement late last month.The SEC has good reason to be annoyed, as Beijing’s tough stance has only hardened with a new law that took effect in March. Item 177 states that overseas regulators can’t directly inspect or collect evidence on Chinese soil. In addition, domestic companies aren’t allowed to provide any relevant supporting documents without permission. As a result, the cloud of suspicion over these businesses will only grow darker. Even the most well-meaning among them won’t be able to prove otherwise.Going home was always the grand slogan whenever China Inc. felt mistreated or undervalued abroad. The nation’s stock frenzy in the first half of 2015 saw a wave of take-private deals, to the tune of $24 billion, as companies trading in New York rushed to go public in Shanghai or Shenzhen. The timing seems ripe again, especially now that mainland exchanges and Hong Kong both allow secondary listings.But there’s a new problem: China doesn’t want these companies back. Its bourses’ secondary listing requirements rule out most small caps. Hong Kong, for instance, demands that companies need to already have a market cap over $5.2 billion, or barring that, $129 million in annual sales and a market cap of at least $1.3 billion.As for China, secondary listing rules released last month are intriguing. Beijing relented on its obsession with blue chips — the required market cap was lowered to $2.8 billion from $28 billion. There’s a catch, though. Smaller companies must have “independent research,” “world-leading technology” and an “edge” in their field. In other words, don’t bother if you’re sub-scale. The likes of e-commerce retailer Vipshop Holdings Ltd., online dating app Momo Inc. or after-school education provider New Oriental Education & Technology Group Inc. can stay put. What China wants is hard tech that spends millions on research and specializes in semiconductors and artificial intelligence.Alibaba Group Holding Ltd. has become the face of China for retail investors in New York, while e-commerce operator Pinduoduo Inc. and social video site Bilibili Inc. have become hedge fund playthings. Yet hundreds of more obscure names list in the U.S. Of the 335 stocks, only 27 have a market cap of more than $2.8 billion, data compiled by Bloomberg show, and most would still need to pass Beijing’s “edge” test. As for Hong Kong, less than 40 stocks are eligible for a dual listing.Will Beijing allow hundreds of its companies stranded overseas to languish? You bet. If you can’t make it in New York, Shanghai isn’t for you either, the thinking goes. As China looks to build its FANG equivalent — the big names that give the U.S. tech supremacy — more obscure mainland rivals will be forgotten. Except, of course, by short sellers.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Shares of New Oriental Educational & Technology Group (NYSE: EDU) were climbing higher last month after the Chinese provider of tutoring and test-prep services reported better-than-expected earnings in its third quarter, and benefited from a number of positive analyst notes in the period. According to data from S&P Global Market Intelligence, the stock finished the month up 17%. New Oriental stock popped 4% on April 7 as it was upgraded to conviction buy from buy at Goldman Sachs.
Investors in New Oriental Education & Technology Group Inc. (NYSE:EDU) had a good week, as its shares rose 2.9% to...
Today we'll look at New Oriental Education & Technology Group Inc. (NYSE:EDU) and reflect on its potential as an...
Let's talk about the popular New Oriental Education & Technology Group Inc. (NYSE:EDU). The company's shares saw...
(Bloomberg) -- Koolearn Technology Holdings Ltd. has soared alongside rival Chinese online learning companies since the coronavirus outbreak. Now, the stock has become the $36 billion industry’s priciest as well as one of its most shorted.A unit of New York-listed New Oriental Education & Technology Group Inc., Koolearn has surged 83% this year after the epidemic shut schools and forced many of the country’s 200 million-plus school students online. In response, the company hosted free classroom live-streaming and other activities for its more than two million K-12 and college learners, hoping to snag new users and quicken growth. The stock is now trading at 17 times blended forward 12-month sales, roughly quadruple the 4.4 average of 46 Chinese education companies tracked by Bloomberg.But some investors question the extent to which the loss-making company -- of which Tencent Holdings Ltd. owns almost 10% -- can convert users pushed online by necessity into longer-term paying customers. As of Feb. 25, about 14.2% of Koolearn’s free-floating stock had been shorted by investors, not far off a historic high of 15.7% set on Feb. 18, according to Markit data. And at HK$33.75, Koolearn is already trading 26% above its average target price.“This model is not necessarily sustainable,” said Jacky Choi, chief investment officer at Zeal Asset Management. “The conversion rate of online education is actually very low, which is the risk these companies will face in the future.”Read more: Parents Grapple with E-learning as Chinese Schools Stay ShutInvestors remain sanguine about Koolearn’s industry over the longer term. It’s taken off over past decades: In 2018, revenue from Chinese e-learning climbed 26% to 252 billion yuan ($36 billion) and paying users reached 135 million, according to a report by iResearch. Revenue will double by 2022, the research house estimates.But there’re a lot of competitors for a slice of that pie. Koolearn is spending at a furious pace to expand and attract users, keeping it in the red, said Ye Le, a China Securities analyst. It’s expected to remain loss-making till at least 2022 though those losses will shrink, according to projections compiled by Bloomberg.Virus Investors Don’t Need No (Online) Education: Tim CulpanTo contact Bloomberg News staff for this story: Amy Li in Shanghai at email@example.com;Kari Lindberg in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Charlie Zhu, Helen YuanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Investors looking for an angle on the coronavirus crisis have naturally landed upon the online education sector in the hopes that tens of millions of quarantined school kids will turn such providers into profit-making machines on par with China’s hottest internet companies.Almost every mainland province and city has pushed back the starting date of the spring term by weeks. Most students haven’t seen the inside of a classroom since Lunar New Year in late January. Not wanting to be left behind, students, their schools and parents have turned to online alternatives, including options not offered by traditional education businesses.Giant Alibaba Group Holding Ltd., for example, added 100,000 servers to support its free DingTalk messenger, which is being used across the country to help pupils communicate with teachers and watch online classes. A similar tale is told at WeChat provider Tencent Holdings Ltd.Even San Fransciso-based Seesaw Learning Inc., developer of an early-childhood learning and communication app with less than 10% of revenue from China, saw a 31% jump in traffic from there and 21% from Hong Kong. Co-founder Adrian Graham admits it’s hard to tell whether that spike is due to normal post-new year usage increases or the impact of quarantined kids at the mostly international schools in the Greater China region that use the product.As a result, this could be the biggest sustained, mass experiment in online education since the internet was founded in the 1980s. But for those who specialize in education as a business, there’s little to suggest a surge of online students will boost the bottom line.In China, the commercial education business is driven chiefly by demand for after-school tuition (AST) classes. In physical classrooms, also known as cram schools, which are owned and operated by these providers, children as young as kindergartners spend an extra few hours after their normal day (and on weekends and during school holidays) to bone up on core subjects of Chinese, English and mathematics.To deal with the quarantines, TAL Education Group, one of China’s largest education companies, is moving students from offline classes to its programs and refunding the difference in tuition fees, with online up to 50% cheaper, Daiwa Capital Markets HK Ltd. analysts John Choi and Candis Chan wrote this month. New Oriental Education & Technology Group Inc., the other big player in Chinese education and a leader in test-preparation courses, is also moving students to its web and app platforms, they wrote. A key narrative supporting the thesis for big online education profits is that the massive home-schooled education program now under way will work as great marketing for companies like TAL and New Oriental, which spend a lot of money just getting students to enroll in their classes. A captive market of kids forced to learn via the internet might then be converted to long-term online tuition customers. That’s the theory, anyway.In truth, they’d better hope that doesn’t happen. Online is not as profitable as physical classrooms, competition is tougher, and average prices are falling faster. Take TAL as an example. Revenue for the three months to Nov. 30 climbed 47% from the previous year. Online sales were the major driver, climbing 86%. But actual enrollments grew 107%. In other words, student numbers rose faster than revenue because average prices actually fell 9% for the period.So while online has expanded, it still accounts for only 18% of total revenue. The glass-half-full scenario would tell you that there’s great potential ahead. A more pessimistic analysis would suggest that if TAL needs to cut prices this early, then there’s not a lot of room to boost profitability as time marches on. And the company is already suffering pressure that is hurting the bottom line. Operating margin shrank to 9% from 12% in the previous year, with net income plunging 77%.New Oriental isn’t faring much better. Online education accounted for 6% of its revenue in the latest fiscal year. The company gets more than 80% of sales from language training and test preparation. That indicates that internet-based programs have great potential. Yet data show New Oriental is struggling to scale. Subsidiary Koolearn Technology Holding Ltd., which it spun off and listed in Hong Kong, posted revenue growth of just 19% in the six months to Nov. 30. What’s more, operating loss tripled with margin deteriorating from -4.6% to -16.5%.One company might have nailed it, however. GSX Techedu Inc. describes itself as “a leading online K-12 large-class after-school tutoring service provider.” GSX’s niche is massive live online classes — it boasts being able to host 100,000 students in a single broadcast — that allow it to rake in cash while saving on teacher salaries, which account for a major proportion of the costs borne by rivals.That scalability helped it turn profitable in 2018, a feat repeated last year, earning it an operating margin of 10.7%, in line with TAL and New Oriental.GSX has since been joined in offering massive classes. More than 2.4 million users are reported to have tuned in for some TAL elementary-school classes during the coronavirus period. Others are jumping aboard, too. Alibaba, for example, developed DingTalk for enterprise use. While it launched a campus-focused program for the product last year, it wasn’t until the current crisis that its popularity in education really took off. Worse for GSX, Alibaba is offering it for free and allowing schools to make use of existing teachers and materials.So while the outbreak is necessitating internet-based education options, it’s also highlighting how cheap online learning can be. The great thing about the internet is its ability to allow anyone to deliver content easily and cheaply. That may not be the outcome education companies really would be hoping for.To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Zacks.com featured highlights include: ACM Research, SLM, 1-800-FLOWERS.COM and New Oriental Education & Technology
U.S. service sector and job market are flourishing, per January's ISM's non-manufacturing report. Investors can make the most by investing in the top-performing sectors.
Higher investments in marketing and student recruitment hurt Adtalem's (ATGE) fiscal Q2 earnings. However, growth of the RN to BSN program helps the company to post better-than-expected results.
Consumer confidence hits the peak in five months, with a strong job market boosting American households. We have selected five stocks that can make the most.
New Oriental Education & Technology Group Inc. (NYSE:EDU) shares fell 5.4% to US$133 in the week since its latest...
New Oriental Education & Technology's (EDU) fiscal second-quarter earnings increase from the prior-year reported figure on the back of strong enrollment and Optimize the Market strategy.
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...