Agoracom Blog Small-Cap Company Feature: New Oriental Education and Technology Group

Posted by AGORACOM at 9:30 AM on Tuesday, July 21st, 2009

As many of you know, we are very bullish on the long-term future of Chinese small cap and mid cap companies for two reasons:

1] The obvious reason – China is the fastest growing economy on the planet and nothing is going to slow down its ascent over the next 50 years and beyond. Investing in growth companies there just makes too much sense.

2] Great Results and Valuations – Many Small Cap Chinese Companies are listing in the US (OTCBB, NYSE Alternext and NASDAQ) with great financial results. Unlike many dubious US Small Cap Companies, Chinese Companies don’t seem to believe in losing money or failing to execute in a business plan. As such, 7-digit revenues and profits are very common.

From a valuation point of view, many Chinese companies became a victim of their own success in Q4 2008 and Q1 2009. Why? When the world needed to start liquidating, one of the first places they looked were China where most investors had significant gains to sell into. This resulted in the proverbial baby being thrown out with the bathwater and some great valuations.


New Oriental Education and Technology Group (NYSE:EDU)


New Oriental is the largest provider of private educational services in China based on the number of program offerings, total student enrollments and geographic presence. New Oriental offers a wide range of educational programs, services and products consisting primarily of English and other foreign language training, test preparation courses for major admissions and assessment tests in the United States, the PRC and Commonwealth countries, primary and secondary school education, development and distribution of educational content, software and other technology, and online education

On July 2st 2009, the Company announced its unaudited financial results for the fourth quarter and fiscal year ended May 31, 2009.

Check out the full details below!

Read Full Press Release

China Stocks TV Segment


  • Quarterly Net Revenues Increased by 47.9% Year-Over-Year
  • Quarterly Non-GAAP Net Income Increased by 58.0% Year-Over-Year
  • Quarterly GAAP Net Income Increased by 49.8% Year-Over-Year
  • Fiscal Year Net Revenues Increased by 45.6% Year-Over-Year
  • Fiscal Year Non-GAAP Net Income Increased by 34.6% Year-Over-Year
  • Fiscal Year GAAP Net Income Increased by 24.5% Year-Over-Year


Michael Yu, New Oriental’s chairman and chief executive officer said “We attained these financial results notwithstanding the current global economic slowdown, the aftermath of the Sichuan earthquake, the negative impact of the Beijing Olympics on our all-important summer quarter in 2008 and the current challenges posed by the H1N1 flu outbreak. This is a testament to the strength of the New Oriental brand in China and the determination of Chinese families to make the education of their child or children a top priority.”

As always, this is my view in a snapshot. It is intended to give you a running start into your research. Now, you have to do your own due diligence to make sure the valuation is not impaired by other factors including balance sheet items, lawsuits or any other negative events.

If you have any comments, I’d love to see them below.


We’ve provided investors with two great starting points to research great Chinese small cap and mid cap companies.

1. – tracks 250 of the best small cap and mid cap companies trading on North American exchanges. It provides you with the best of the best in two ways. First, the front page lists the best news of the day coming out of the space. It does so by giving you a text view of the best press releases by industry and via Chinese Stocks TV, a 5-minute broadcast every morning just after the open. Chinse Stocks TV is archived, so you can catch up on shows you missed.

Second, if you want to research each of the 250 companies to find candidates for your portfolio, it has a very intuitive directory that lets you quickly review each company on the master list, or parse it out by industry and exchange if you have a particular sector of interest. Cool stuff.

2. Right here on AGORACOM, you can refer to our China category for other featured Chinese Small-Cap Companies. As always, we will disclose any IR relationship with any public company. Given the sheer number of great Chinese Small-Cap Companies out there, you can expect us NOT to have an IR relationship with most of these companies.


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