Goldpebble Releases an Independent Research Report on New Oriental

SINGAPORE, Sept. 13, 2012 /PRNewswire/ -- Goldpebble Research Pte. Ltd. ("Goldpebble), an independent research company focusing on processing public information by using its proprietary algorithm, today released a full report on New Oriental Education & Technology ("New Oriental", NYSE: EDU) (Report link: The report pointed out that the recent doubts from the market on the scale of New Oriental's franchise network, potential fraud in financial reporting, high margins and its VIE legal structure lack sufficient supporting facts.

  • Goldpebble replicated 107,517* course records from New Oriental's public online enrollment website, estimated New Oriental's operating reality with Goldpebble's proprietary algorithms and compared the details with New Oriental's SEC filings, finding that New Oriental's financial reporting is a reliable reflection of its operating results.

  • Goldpebble surveyed all of New Oriental's 48* directly operated schools and the 680* subsidiary learning centers available on New Oriental's website, verifying the entities that received tuition fees and issued invoices in relation to all the schools and most of the learning centers, and finding that none were operating under the franchise model.

  • From public news, search engines and other media sources, Goldpebble identified 21* New Oriental franchisees and their 34* affiliated learning centers. These franchisees are all in relation to kid education and operated in small cities and/or districts starting after 2010. Based on Goldpebble's estimates, New Oriental's franchise-related revenue constitutes less than 1%* of its total revenue and thus is insignificant for New Oriental's operating and financial reporting purposes.

  • Goldpebble interviewed senior management of other non-listed private schools and visited the Association of Private Schools as well as relevant officers at the Ministry of Education and Tax Bureau for clarifications on the VIE structure in educational institutions and potential tax issues for New Oriental. The full report includes a more detailed explanation.

"Our professional research team consists of 20 engineers and 10 research analysts. After weeks of due diligence, we have reasons to believe that New Oriental's current financial reporting is trustworthy. It is not very hard to bring the correct story of New Oriental to light with deep and serious analysis as well as good methodologies. But as far as we know, some so called research companies even failed to get a full list of New Oriental's schools and learning centers, not to mention delivering an objective opinion regarding New Oriental's financial and operating status," Yifeng Mao, CFA, head of research of Goldpebble, said after releasing the report.

"A lot of U.S. listed Chinese companies are in the same hard position as New Oriental is, in regards to facing various challenges. In recent years, some research companies and short sellers have challenged U.S. listed Chinese companies which have created market doubts and even affected stock prices," remarked Yifeng Mao. "Some research companies did discover some problems in fraudulent companies, however, they are making biased accusations against companies with solid fundamentals. As an independent research company with infrastructure focusing on Chinese companies, we feel obligated to strive to provide unbiased and reliable information to the market and to bring the truth to the general public as well as the involved companies."

*Goldpebble's proprietary data, in this report, was processed by our due diligence team and with the Goldpebble algorithm which obtained the data from New Oriental's website, company filings to the SEC and other public information sources.

About Goldpebble

Goldpebble is an independent research company, focusing on companies, industries and macro-economy in China. Goldpebble emphasizes on compliance, transparency and effective methods of doing quality research, identifying relevant information and investment hypothesis from a sea of public data sources. Goldpebble boasts a world class team of engineers and research analysts. For more information about Goldpebble, please visit

For media inquiries, please contact:

Andrew Zhao
Goldpebble Research
Tel: +86-21-5161 9106

Yifeng Mao
Goldpebble Research
Tel: +65 3156 3622

SOURCE Goldpebble Research

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