- New Oriental is likely to face continued pressure from regulatory reform in the private education sector.
- The company, along with the private educational sector, is at the mercy of Chinese politicians who can initiate outright bans on the tutoring industry.
- The company’s share price new upside potential range is now far lower from its new business model.
- Revenues could get cut 50-60% in the coming year but it is probable will own a larger market share in the tutoring industry in the future.
- I’m short-term bullish on the stock price here as risk/reward skews in favor of long holders at $6 but neutral on the company’s prospects over the intermediate term. Use relief rallies to take profits.
For further details see:
New Oriental: Don't Use Technical Analysis To Trade, Understand China Instead