Strategic Transformation and Financial Resilience: How New Oriental Reinvented Itself After China’s Double Reduction Policy

Qiyu Yang (), Lin Sun, Hiotong Su and Xi Chen
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Qiyu Yang: Xiamen University, Economics and Management College
Lin Sun: Suan Sunandha Rajabhat University, Graduate School Doctor of Business Administration
Hiotong Su: Macau University of Science and Technology, Faculty of Hospitality and Tourism Management
Xi Chen: Xiamen University, School of Computing and Data Science

A chapter in Proceedings of the 2025 5th International Conference on Enterprise Management and Economic Development (ICEMED 2025), 2025, pp 398-412 from Springer

Abstract: Abstract This study focuses on the financial transformation of New Oriental Education & Technology Group in the context of China’s “Double Reduction” policy. Utilizing financial data from 2021 to 2024, we conducted both horizontal and vertical analyses of income statements, balance sheets, and cash flow statements, complemented by a DuPont analysis to evaluate the company’s resilience under regulatory stress. The findings reveal that, despite a significant decrease in revenue and net profit in 2022, strategic measures—such as selling under-performing assets, tightening cost controls, and expanding into high-margin sectors like live-streaming commerce and international education—enabled a return to profitability by 2024. Enhanced cash flow management, improved asset utilization, and a restructured capital framework were critical to this recovery, though challenges related to policy reliance, intensified competition, and geopolitical risks remain. These insights provide a decision-making framework for balancing immediate stability with long-term sustainable development in policy-sensitive industries, offering valuable guidance for both investors and policymakers [1][2].

Keywords: Double Reduction Policy; New Oriental Education; Strategic Transformation; Financial Resilience (search for similar items in EconPapers)
Date: 2025
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DOI: 10.2991/978-94-6463-811-0_43

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