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Business China

New Oriental and Yu Minghong

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Amid all the craziness of Home Inns Ru Jia’s IPO, another well known Chinese company did IPO on NYSE on early Sept, that’s New Oriental Education group. For Chinese students seeking study abroad in the US in 1990s, New Oriental is nothing new. Although I have not attended their classes because at that time their classes are still limited to Beijing, I did got the vocabulary book nicknamed “Hong Bao Shu”. The book was edited by Mr. Yu Minghong, who also founded the school. From what I heard, when Mr. Yu speaks in the classroom, it’s pretty much like a rock star performs in the stage (or Bill Gates speaks in the stadium for his Microsoft employees).

I did not pay enough attention on its IPO because I was in China at that time. Now I have a little time to look at its F-1 forms, quarterly report, web page, listen to the conference call and reflect what I heard about the English education in China. I believe it is a good company and its stock may be a good long term investment. Compared to Home Inns’ position in China, I think it has a more dorminant position. But there is negatives too: it’s very dependent on Mr. Yu, both as owner (to set vision) and as management (execution, operation), I don’t know how can he manage that? Also it is not Wall Street friendly as Home Inns because Mr. Yu is not known to Wall Street (unlike Home Inns founders, they already made name from Ctrip).