New Oriental Education & Technology Group, Inc.

Good evening, and thank you for standing by for New Oriental's FY 2022 Fourth Quarter Results Earnings Conference Call. At this time, all participants will be in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the meeting over to your host for today's conference, Ms. Cici Zhao.

Thank you, Operator. Hello, everyone, and welcome to New Oriental's fourth fiscal quarter 2022 earnings conference call. Our financial results for the period were released earlier today and are available on the company's website as well as on NewsWare services. Today, you will hear from Stephen Young, Executive President and Chief Financial Officer. After his prepared remarks, Stephen and I will be available to answer your questions. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the US Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public findings with the SEC. New Oriental does not undertake any obligation to update any forward-looking statements, except as required under applicable law. As a reminder, this conference is being recorded. In addition, a webcast of conference call will be available on New Oriental's investor relations website at investor.neworiental.org. I will now turn the call over to Mr. Yang. Stephen, please go ahead.

Stephen Yang Thank you, Cici. Hello, everyone, and thank you for joining us on the call. Before going into details of our financial performance, I would like to take this opportunity to extend our gratitude to those who have been supporting and still believing in New Oriental. While our business in the previous quarters were largely affected by the government policies introduced last year, I'm glad to announce that we are now paving a new path innovative business opportunity as the company embarks on a fresh journey that strives to encourage all around development of students and for the betterment of the society. And at the same time, focuses on generating profit and returns for our shareholders. Now, I would like to spend some time to talk about the quarter performance across our remaining business lines and introducing our new initiatives to you in detail. Our key remaining businesses have shown remarkable resilience and achieved a promising trend. Breaking it down, the overseas test prep business recorded the revenue increase of 6% in dollar terms for the fiscal year 2022. The overseas study consulting business recorded a revenue increase of about 16% in dollar terms year-over-year for the fiscal year 2022. The adults and university students' business recorded a rapid growth of approximately 30% year-over-year for the fiscal year 2022. As for our new business initiatives, as mentioned in the past quarter, we have launched several new initiatives throughout the year. which mostly revolve around facilitating students around development. I'm glad to share with you that these new initiatives have shown positive momentum. Firstly, the non-academic tutoring business, which we have rolled out in over 50 existing cities, focused on cultivating students' innovative ability and comprehensive ability. We're happy to see increased market penetration in those markets we have tapped into. The top 10 cities in China have contributed more than 60% of the revenue of this business. Secondly, the intelligence learning system and device business is a service designed to provide a tailored digital learning experience for students. It utilizes our past teaching experience, data, and technology to provide personalized and targeted learning and exercise content together with our teachers monitoring and accessing the learning curve of the students at the back end system. The new initiative education service not only greatly improves the students' learning efficiency, but also cultivates students' proactive learning habits. We have tested adoption in around 60 cities. and are delighted to see improved customer retention rate and scalability of this new initiative. The revenue contribution of this initiative from the top 10 cities in China is over 60%. Meanwhile, the study tour and the research camp business is an initiative that aims at offering students of K-12 and university ages the opportunity to fully leverage their free time and holidays to broaden the scope of knowledge and cultivate a subject's interest. We have conducted a study towards the research cap in over 50 cities across the country. The revenue contribution of this initiative from the top 10 cities in China is over 55%. At the same time, we have also been launching smart education business, which comprises smart teaching, smart hardware, science, technology, innovation, education, and other services, targeting local governments, educational authorities, primary, secondary schools, and kindergartens. Educational material and digitalized smart study solutions, the self-learning system leveraging advanced technology that will enable students to have complete control over the pace and flexibility of the learning in an age where remote learning becomes increasingly mainstream. as well as exam prep course designed for students with junior college diplomas to obtain bachelor's degree. The above-mentioned businesses have been gaining traction and contributing to the overall growth of the company. During the last fiscal quarter, we have been fully committed to complying with government policy, and as a result, the total number of schools and learning centers was reduced to 744 by the end of this fiscal year. This significant change in our structure has underscored the importance of our industry-leading OMO system, which has been one of the constants during the company's restructuring phase as we remain committed to investing in the R&D. So, yeah, we got lost. So I repeat again. Okay. Sorry. Before going into the detail of our financial performance, I would like to take this opportunity to extend our gratitude to those who have been supporting and believing in New Rental. While our business in the previous quarters were largely affected by the government policies introduced last year, I'm glad to announce that we are now paving a new path in innovative business opportunities as the company embarks on a fresh journey that strives to encourage all-round development of students and for the betterment of the society. And at the same time, focuses on generating profit and returns for our shareholders. Now, I would like to spend some time to talk about this quarter performance across our remaining business line and introduce our new initiatives to you in detail. Our key remaining business have shown remarkable resilience and achieved a promising trend. Breaking it down, the oversea task rep business recorded a revenue increase of 6% in dollar terms for the fiscal year 2022. The overseas study consulting business recorded a revenue increase of about 16% in dollar terms year-over-year for the fiscal year 2022. The adults and university students business recorded a rapid growth of approximately 30% year-over-year for the fiscal year 2022. As for our new business initiatives, as mentioned in the past quarter, we have launched several new initiatives throughout the year. which mostly revolve around facilitating students' all-round development. I'm glad to share with you that these new initiatives have shown positive momentum. Firstly, the non-academic children business, which we have rolled out in over 50 existing cities, focuses on cultivating students' innovative ability and comprehensive quality. We're happy to see increased market penetration in those markets we have tapped into. The top 10 cities in China have contributed more than 60% of the revenue of its business. Secondly, the intelligence learning system and device business is a service designed to provide a tailored digital learning experience for students. It utilizes our past teaching experience, data, and technology to provide personalized and targeted learning and exercise content, together with our teachers' monitoring and accessing the learning curve of our students as a back-end system. This new innovative education service not only greatly improves students' learning efficiency, but also cultivates students' proactive learning habits. We have tested its adoption in around 60 cities and are delighted to see improved customer retention rate and scalability of this new initiative. The revenue contribution of this from the top 10 cities in China is over 60%. Meanwhile, the study tour and the research camp business is an initiative that aims at offering students of K-12 and university ages of the opportunity to fully leverage their free time and holidays to broaden the scope of knowledge and cultivate the subject's interest. We have conducted a study tour and a research cap in over 50 cities across the country. The revenue contribution of this from the top 10 cities in China is over 55%. At the same time, we have also been launching smart education business, which comprises smart teaching smart hardware, science and technology innovation, education, and other services, targeting local governments, education authority, primary and secondary schools, and kindergartens. Educational material and digitalized smart study solutions, a self-learning system leveraging advanced technology that will enable students to have complete control over the pace and the flexibility of learning in an age where remote learning becomes increasingly mainstream, as well as exam prep courses designed for students with junior college diplomas to obtain bachelor's degree. The above-mentioned businesses have been gaining traction and contributing to the overall growth of the company. During the last fiscal years, we have fully committed to complying with government policies. And as a result, the total number of schools and learning centers was reduced to 744 by the end of this fiscal year. The significant changes in our structure have underscored the importance of our industry-leading OMO system, which has been one of the constants during the company's restructuring phase. as we remain committed to investing in the R&D of the technology. The OMO has been instrumental during the restructuring process, as well as COVID-19 outbreaks in certain part of China, where a strong flexibility is required in migrating students between online and offline classes to minimize the learning disruption. We continued our efforts in developing and revamping our OMO teaching platform and kept leveraging our education infrastructure and technology strengths across the remaining key business and new business to provide more advanced and diversified education service to the customer for all ages. We have invested $36 million in this quarter and $166 million dollars in full fiscal year to improve and maintain our OMO teaching platform, which ensures that we may continue to offer high-quality service and flexibility to our students during the pandemic. In response to the evolving industrial situation in China and in compliance with the latest regulations in the education space, we have been implementing structural changes to our pure online platform, CoolLearn. We're actively exploring new initiatives and broadening its customer base and offerings by leveraging its existing technology that has been the core of its business. One good example of the potential business direction that has shown promising results to date is Dongfang Zhenxuan. an e-commerce platform for selling agriculture and other products. Towards the end of December 2021, CoolLearn began piloting live streaming events on various short video platforms, such as Douyin, which allows CoolLearn to promote high quality agriculture and other products, such as books, to the younger group of the audience through the social medium. It also enabled CoolLearn to tap into the broader customer base, the new e-commerce live streaming generation, whilst bringing our nation's agricultural producers, farmers, and their products to the foreground where we believe they belong. This has resulted in, to date, a notable user adoption and attraction to this platform with the Dongfang Zhenxuan, heading the way in an encouraging and optimistic direction. After the introduction of the government policy on after-school children last year, which has no doubt posed a directional impact on our business, we have received many inquiries and concerns from investors over the company's financial position. As a company with longstanding heritage, we have always made sure that we are prepared for and capable in weathering changes in the market. And that is reflected in our ability to maintain a strong cash position throughout the whole restructuring process. By the end of this quarter, our cash and cash equivalent term deposits and short-term investments totaled approximately $4.2 billion. The company continued to seek opportunities to create more value to shareholders. On July 26, 2022, New Oriental's Board of Directors authorized the repurchase of up to $400 million of the company's common shares during the period from July 28, 2022 through May 31, 2023. This share repurchase program authorized the company to purchase its ADS or common shares from time to time on open market in accordance with applicable rules and regulations. The timing and extent of any purchase will depend upon market conditions, the trading price of ADS, and its common shares, as well as the other factors. Now I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.