Dongfang Zhenxuan responds to the investigation of New Oriental CEO: purely rumors
Dongfang Zhenxuan responded to rumors about the New Oriental CEO being investigated, stating that it is "purely a rumor." The company will release its full-year results for the period ending May 31, 2025, on August 22. According to an analysis by Huaxi Securities, Dongfang Zhenxuan's revenue for the fourth quarter of the 2025 fiscal year was USD 150 million, a year-on-year decrease of approximately 30%, but improved compared to the previous quarter. Guosen Securities pointed out that Dongfang Zhenxuan has advantages in the current diversified consumer market, and its operating conditions have improved
According to the Zhitong Finance APP, there are market rumors that New Oriental Group CEO Yu Minhong's long-time partner Zhou Chenggang is suspected of embezzling the interests of the listed company through related party transactions and has been investigated by regulatory authorities. This news has not yet been officially announced. In response, Dongfang Zhenxuan (01797) stated to Zhitong Finance that it is "purely a rumor."
It is understood that Dongfang Zhenxuan will release its full-year results for the fiscal year ending May 31, 2025, on August 22 (next Friday). Previously, New Oriental announced its fourth-quarter results for the 2025 fiscal year. According to Huaxi Securities' estimates based on the earnings announcement and earnings conference, Dongfang Zhenxuan's revenue for the fourth quarter of the 2025 fiscal year was USD 150 million, a year-on-year decline of approximately 30%, with the decline narrowing compared to the previous quarter; Non-GAAP operating profit was approximately RMB 79 million, corresponding to an operating profit margin of about 7%, which improved quarter-on-quarter. The firm stated that the company's profitability has continued to improve after experiencing the fallout from the separation from Hui Tongxing and the departure of top influencer Duoduo. The firm suggests paying attention to the company's transformation from influencer-driven to product-driven.
Guosen Securities pointed out that Dongfang Zhenxuan's "Sam's Club paradigm" has attracted attention. The current consumer market is characterized by diversified supply, transparent information, and rational demand. In this context, companies that can provide high cost-performance products and have a mature membership system (such as Sam's Club, Haidilao, Dongfang Zhenxuan, etc.) are expected to have more prominent advantages. Dongfang Zhenxuan has recently shown marginal improvement in operations, successful expansion of new categories, and improved quality of self-operated business growth. The firm believes that the marginal improvement in Dongfang Zhenxuan's operations to some extent confirms the growth logic of this type of enterprise
