9901 · HKEX · China
neworiental.orgFinancials as of FY2025
Runs test-prep classrooms across 100+ Chinese cities and locks students in through a platform that holds their learning data.
New Oriental runs test-preparation classrooms in more than 100 Chinese cities, and before a single class can start in any of them, a local education bureau must approve the specific facility — so the classroom network grows only as fast as bureaucrats sign off on real estate near universities, not as fast as the company spends money. Once a student enrolls, every homework submission, practice-test score, and instructor note accumulates inside New Oriental's OMO platform, and because that record stays inside the platform, a student who switches to a competitor mid-course loses the entire history their instructor has been using to adjust lessons in real time. The score improvements that drive word-of-mouth referrals come from instructors reading that per-student data within the same lesson and changing pace on the spot, so the classroom licence and the platform data record have to work together — neither produces the outcome on its own. The whole structure sits on those bureau-issued licences, though, so if Beijing extended its Double Reduction education regulations to cover TOEFL, IELTS, and GRE preparation — categories currently left out — those licences could be revoked, and the platform would have no approved physical layer left to run on.
How does this company make money?
Students pay a course fee upfront before classes begin. Standard courses cost between 3,000 and 15,000 RMB. Smaller, more intensive classes and one-on-one instruction sessions are priced at the higher end of that range.
What makes this company hard to replace?
A student who leaves mid-course cannot take their OMO learning progress data to a competitor — that record stays inside the platform. Instructors who use the OMO teaching interface would need to retrain to work on a different system. Universities that have signed multi-city corporate contracts are also locked into semester-long referral arrangements, which keeps the institutional pipeline in place.
What limits this company?
A new classroom can only open after the local education bureau approves the specific facility, and those approvals move slowly. At the same time, the company needs qualified English instructors who can also operate the OMO teaching interface — and each city only has so many of those people. Both conditions have to be met at the same time before a new location can take on students.
What does this company depend on?
The company cannot operate without operating licences from local education bureaus across 100+ Chinese cities. It also relies on coordinating test schedules with ETS and British Council, who run TOEFL and IELTS. Domestically certified English instructors are essential, as are classroom leases in locations close to universities. The OMO proprietary learning management system ties all of these together.
Who depends on this company?
Chinese university students preparing for overseas graduate admissions depend on the score improvements the company delivers — without them, acceptance to foreign programs becomes harder. Domestic high school students rely on its gaokao prep for university placement inside China. Overseas universities also depend indirectly on Chinese applicants arriving with legitimate, verifiable standardized test scores.
How does this company scale?
Curriculum materials and the OMO digital platform can be copied to a new city location relatively cheaply. What cannot be sped up is finding and training qualified English instructors in each local market who can also use the OMO teaching interface — that constraint stays in place no matter how fast the company wants to grow.
What external forces can significantly affect this company?
The biggest policy risk is the Chinese government expanding Double Reduction regulations to cover foreign-test prep, which could make current licences revocable. US-China diplomatic tensions affect how many Chinese students can get visas to study abroad, which directly shrinks demand for TOEFL, IELTS, and GRE prep. China's falling birth rate means the pool of college-age students is getting smaller every year.
Where is this company structurally vulnerable?
Right now, Double Reduction regulations — the Chinese government's rules restricting private tutoring — do not cover TOEFL, IELTS, or GRE preparation. If regulators extended those rules to include foreign standardized tests, the operating licences holding the classroom network together could be revoked. Without licensed classrooms, the OMO platform has no physical layer to run on, and the whole model collapses.
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