EDU: EDU Remains Focused On Executing Its Own OMO Strategy; Positive On FY2Q21 Performance

EDU will report FY2Q21 results on January 22nd before the market opens with an 8am EST conference call. We are positive on EDU’s FY2Q21 performance. While competition in the online education market is heating up, EDU is finding its own way to remain competitive by expanding its regional OMO (online merger offline) reach, instead of burning cash to buy temporary enrollments. We believe EDU’s OMO is likely to enable the company to accomplish better enrollment coverage without pressuring the margin. The lingering negative impact from the high spending of its pure online arm, 1797.HK (HK$28.05, Not Rated) is likely to be over in FY3Q21.