New Oriental Education & Technology Group (NYSE: EDU) is the largest provider of private educational services in China based on the number of program offerings and total student enrollments. The educational programs, services and products are primarily in English and other foreign language training, test preparation courses for admissions and assessment tests in the U.S., China and commonwealth countries, primary and secondary schools education, software and other technology, and online education.
New Oriental Education announced on July 28, 2008 that it signed an agreement on July 26, 2008 to purchase Tongwen, a private school specializing in tutoring students for the gaokao, the Chinese national entrance examination for colleges or universities in China. This was the second recent acquisition of a company specializing in the important gaokao examination.
New Oriental Education has co-branding agreements with well known international companies such as Pearson Education, McGraw-Hill, Barron's and the University of Cambridge.
New Oriental Education revenues for the fourth quarter 2008 increased by 62.5% to $40.2 million from $24.7 million in the fourth quarter in 2007. Net income for the fourth quarter 2008 was $1.8 million compared to a $4.5 million net loss in 2007. Revenues for the fiscal year ended May 31, 2008 increased 51.6% to $201.0 million from $132.6 million for the fiscal year ended May 31, 2007. Net income increased by 71.4% to $49.0 million for the fiscal year ended May 31, 2008 from $28.6 million in the prior year in 2007.
New Oriental Education & Technology Group's stock closed on August 11, 2008 at $72.77, down 26.6% from its fifty-two week high of $92.15. Education is very important in China and their market, needless to say, is huge. New Oriental Education's current stock price appears to present an opportunity to invest in a fast growing company at a reasonable valuation. New Oriental Education looks like it will continue to obtain top grades and remain at the head of its class in the future.
References:
http://investor.neworiental.org/phoenix.zhtml?c=197416&p=irol-news&nyo=0
New Oriental Announces Acquisition of Tongwen Gaokao Test
http://library.corporate-ir.net/library/19/197/197416/items/303408/Q42008EarningsRelease.pdf
Company Fourth Quarter 2008 Earnings Release
http://investor.neworiental.org/phoenix.zhtml?c=197416&p=irol-reportsAnnual
Company 2007 Annual Report
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