After a 95% Crash, This China Education Stock Has Drawn a $35 Million Bet From One Institutional Investor

New Oriental Education & Technology Group (NYSE:EDU) saw a significant purchase from Singapore-based Serenity Capital Management, which increased its position by approximately $21.6 million, according to a November 13 SEC filing.

What Happened

According to a Securities and Exchange Commission (SEC) filing dated November 13, Singapore-based Serenity Capital Management increased its stake in New Oriental Education & Technology Group (NYSE:EDU) by 411,380 shares during the third quarter. The updated position totals 656,878 shares valued at $34.9 million as of September 30. The trade lifted New Oriental Education & Technology Group as the fund's fifth-largest holding out of eight reported positions.

What Else to Know

The fund's buy brought New Oriental Education & Technology Group to 8.8% of its 13F reportable assets under management.

Top holdings after the filing:

• NASDAQ: BZ: $117.6 million (29.9% of AUM)
• NYSE: ZTO: $97.1 million (24.6% of AUM)
• NYSE: TAL: $53 million (13.4% of AUM)
• NASDAQ: HTHT: $49.8 million (12.6% of AUM)
• NYSE: EDU: $34.9 million (8.8% of AUM)

As of Friday, EDU shares were priced at $55.67, down 5.3% over the past year and well underperforming the S&P 500, which is up 16.5% in the same period.

Company Overview

Company Snapshot

• New Oriental Education & Technology Group offers private educational services, including test preparation, after-school tutoring, language training, and online education programs across China.
• The company generates revenue primarily through tuition fees for in-person and online courses, as well as educational materials and consulting services.
• It serves students from pre-school to college age, with a focus on K-12 and test preparation markets in China, and students preparing for overseas studies.

New Oriental Education & Technology Group is a leading provider of private education services in China, operating an extensive network of schools and learning centers. The company leverages a diversified portfolio of offerings, from language training to test preparation and online education, to address evolving educational needs. Its scale and breadth of services provide a strong competitive position in the Chinese education sector.

Foolish Take

In a tightly concentrated portfolio with just eight positions, increasing exposure to a stock that once lost more than 95% of its value signals a willingness to underwrite regulatory risk in exchange for durability and cash flow. This is not a momentum trade. It is a bet on survival and adaptation.

The business today looks nothing like it did at its 2021 peak. Following China’s crackdown on for-profit tutoring, the company rebuilt around adult education, overseas test prep, consulting, and newer education-adjacent initiatives. The latest earnings back that up. First-quarter fiscal 2026 revenue rose 6.1% year over year to $1.52 billion, while operating income climbed 6% to $311 million. Non-GAAP operating margin improved to 22%, reflecting tighter cost control and a more disciplined operating model.

Just as important is the balance sheet. The company ended the quarter with over $1.2 billion in cash, and management has also committed to returning at least 50% of annual net income to shareholders through dividends and buybacks starting this fiscal year.

In a portfolio dominated by Chinese internet and education names, this position sits alongside peers facing similar policy risk. For long-term investors, the takeaway is simple: This is a bet that a scaled, profitable survivor can still compound from a far smaller but sturdier base.

Glossary

13F reportable assets under management: The portion of a fund’s assets disclosed in quarterly SEC Form 13F filings.
AUM (Assets Under Management): The total market value of investments managed by a fund or investment firm.
Stake: The ownership interest or number of shares held in a particular company by an investor or fund.
Compound annual growth rate (CAGR): The average yearly growth rate of a value over a specified time period, accounting for compounding.
Forward P/E: Price-to-earnings ratio using forecasted future earnings, indicating how much investors are paying for expected profits.
EV/EBITDA: Enterprise value divided by earnings before interest, taxes, depreciation, and amortization; a measure of company valuation.
Buy (in fund context): An investment action where a fund increases its holdings in a specific security.
Top holdings: The largest investments in a fund’s portfolio, usually ranked by value or percentage of assets.
TTM: The 12-month period ending with the most recent quarterly report.
Test preparation: Educational services focused on helping students prepare for standardized exams or entrance tests.
Educational materials: Products such as textbooks, workbooks, or digital resources sold to support learning and instruction.
Learning centers: Physical locations where educational services, tutoring, or classes are provided to students.

Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.