Since October, shares of New Oriental Education
New Oriental is China's market leader in private education. The company primarily provides English classes and test preparation.
Fiscal third-quarter revenues spiked 51% to $33 million, and net income rose a whopping 543.5% to $8.4 million. New Oriental posted an 8% increase in student enrollment, to 199,100; the company also benefited from a late Chinese New Year, giving students more time to attend courses.
With $176 million in the bank, New Oriental plans to further expand its footprint, building more learning centers, developing content offerings, and investing in the brand. That's a smart strategy. As Starbucks
New Oriential's hub-and-spoke structure is a crucial key to its strategy, letting the company leverage shared administrative resources and content across all its schools and learning centers. As a result, it only experienced a 2.3% increase in general and administrative expenses, to $8.4 million, in the third quarter.
New Oriental enjoys an undoubtedly massive market opportunity. China's growing middle class exceeds 100 million, and the company only controls about 3% of its market. With its cash position, branding campaign, and strong operating model, the company should push growth for years to come.
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