New Oriental Education & Technology Group, Inc.

Good evening and thank you for standing by for New Oriental's FY2023 fourth quarter results earnings conference call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be question and answer session. Today's conference is being recorded. If you have any objections, you may disconnect at this time. And I'd like to turn the meeting over to your host for today's conference, Ms. Cici Chao.

Thank you. Hello, everyone, and welcome to New Oriental's fourth fiscal quarter 2023 earnings conference call. Our financial results for the period were released earlier today and are available on the company's websites as well as on NewsWare services. Today, Stephen Young, Executive President and Chief Financial Officer, and I will share New Oriental's latest earnings results and business updates in detail with you. After that, 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 U.S. Private Securities 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 filings with the SEC. New Renta 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 this conference call will be available on New Oriental's investor relations websites at investor.neworiental.org. I'll now first turn the call over to Mr. Yang. Stephen, please go ahead.

Thank you, Cici. Hello, everyone, and thank you for joining us on the call. It's our great pleasure to announce that New Oriental has managed to conclude this fiscal year with a set of remarkable financial results this quarter and with our top-line performance beating the expectations. Our existing business lines and new initiatives have pivoted towards a stable recovery and anchored fruit-bearing growth, mainly benefiting from the strong post-COVID recovery of demand and the resumption of the consumption. Our bottom-line performance has also achieved solid growth, with operating margin and non-GAAP operating margin reaching 5.6% and 9.1%, respectively, for this quarter, depicting a well-grounded resilience across our business lines, thanks to our ongoing efforts in enhancing operational efficiency and cost control. In particular, I would like to highlight that the solid recovery has been embodied in the growth of our overseas. Our bottom line performance has also achieved a solid growth with operating margin and non-GAAP operating margin reaching 5.6% and 9.1% respectively for this quarter, depicting a well-grounded resilience across our business lines. Thanks to our ongoing efforts, in enhancing operational efficiency and cost control. In particular, I would like to highlight the solid recovery has been embodied in the growth of our oversea test prep and oversea study consulting businesses, which have recorded steady increments in revenues and enrollments. The dedicated blend of our restructured business model, better utilized facility, and streamlined cost structure have not only helped us yield better than expected margins in this fiscal quarter, but also enlivened our continued exploration of new potential ventures as we unfold a new chapter of innovative endeavors. The company's sustainable profitability, resilience, business lines, and emerging new initiatives have reaffirmed our belief in maintaining a healthy growth of our market share amid the encouraging environment of recovery. Now, I would like to spend some time to talk about the quarter's performance across our remaining business lines and the new business to you in detail. Our key remaining business secured a promising trend, coupled with a positive momentum in our new initiatives. Breaking it down, the oversea test drive business recorded the revenue increase of 52% in dollar terms were 62% in RMB terms year-over-year for the first quarter. The overseas study consulting business recorded the revenue increase of about 6% in dollar terms, or 13% in RMB terms year-over-year for this quarter. The adults and university students business recorded the revenue increase of 34% in dollar terms, or 43% increase in RMB terms year-over-year for this quarter. As mentioned in the previous quarters, we have launched several new initiatives which mostly revolve around facilitating students all around development. I'm pleased to share with you that these initiatives have continued to exceed our expectations by sustaining a promising growth and generating minimum profit to the company. Firstly, the non-academic tutoring courses which we have offered in around 60 existing cities focus on cultivating students' innovative ability and comprehensive quality. We're happy to see further rise of market penetration in those markets we have tapped into, especially in higher tier cities, with a total of 629,000 student enrollments reported in this quarter. The top 10 cities in China have contributed about 60% of revenue of this business. The intelligent learning system and device business, a service designed to provide a tailored digital learning experience for students, has been adopted in around 60 existing cities, with 99,000 active paid users reported in this quarter. The revenue contribution of this new business from the top 10 cities in China is around 60%. Thirdly, our study tour and research camp business An initiative that aims at offering students of K-12 and university ages the opportunity to fully leverage their free time to broaden the scope of knowledge and cultivate subject interest has also achieved encouraging results. We have conducted study tours and research camps in over 50 cities across the country, with the top 10 cities in China offering over 55% of revenue contribution to this new business. Benefiting from the post-COVID recovery of demand, we have seen strong enrollment trends and expect the new business to contribute meaningful revenue in the coming new fiscal year. Last but not least, our smart education business, educational materials and digitalized smart study solutions, as well as exam prep courses, have also contributed meaningful results to the overall growth of the company. and have attained instrumental profits since the previous quarters. With regard to our OMO system, our persistence in revamping our platforms and advancing the technology capability has enabled us to continue to provide high-quality service to our customers and successfully capture the new business opportunity during the transition period. During the reporting period, A total of $31.7 million has been invested into the system. Now, I would like to spend a bit of time to give you an update on Easterby's latest performance. Fiscal year 2023 marks Adventure's beginning for Easterby. Since inception, it has achieved significant breakthroughs in both business operations and financial performance through proactive redesigning a strategic plan and the implementation of a series of initiatives to strengthen the long-term sustainability. During the reporting period, the company introduced a change of its name from Cooler Technology Holding Limited to Easterby Holding Limited for closer alignment with its long-term core business direction, which is to offer top quality agricultural products under our private label, Dongfang Zhenxuan. creates a live streaming platform, which safeguards product caliber and use experience for customers, as well as nurture nationwide cultural appreciation. Throughout fiscal year 2023, Easter Buy continued to expand product variety to provide customers with high quality and cost-effective offerings. The extremely stringent standard applies in selecting prime suppliers and the manufacturers have ensured outputs are always curated a better craftsmanship with similar ingredients. In terms of private label products, we're insisting to introduce only high quality products that are price worthy, eased by elevated user experience by applying advanced technology to safeguard the entire process from product development, sales, to after-sales service. Furthermore, with a vision to foster content innovation and knowledge sharing with customers, Easterbyte began leading on-site live streaming events in various provinces in China, joined by the cultural celebrities from all walks of life to document a rich variety of intangible cultural heritage. We're also grateful for the support to East Bight's exploration in cultural tourism, and it's inspiring to see that the platform has since aroused wild public attention, awareness, and most importantly, affection on Chinese cultural assets. We will continue to explore the area of business and provide updates when suited. With regard to the company's latest financial position, I'm confident to share with you that the company is seeing a healthy financial status with cash and cash equivalent term deposit and short-term investment totaling approximately $4.5 billion. On July 26, 2022, the company's board of directors authorized the share repurchase of up to $400 million of the company ADS were common shares during the period from July 28, 2022 through May 31, 2023. The company's board of directors further authorized the company to extend its share repurchase program launched in July 2022 by 12 months through May 31, 2024. As of July 25, 2023, the company repurchased an aggregate of approximately 5.9 million ADS for approximately $191.7 million from the open market under the share repurchase program. Now, I will turn the call over to Cici to share with you about the key financials. Cici, please go ahead.