This Chinese Education Company Generated $1.4 Billion in Revenue. Why Did a Fund Sell 826,670 Shares?
Key Points
Cederberg Capital Ltd sold 826,670 shares of EDU last quarter.
The quarter-end value of the EDU position fell by about $45 million as a result, reflecting both sales and stock price movement.
After the trade, Cederberg held 73,048 shares valued at $4.14 million, representing 2.2% of AUM.
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On May 15, 2026, Cederberg Capital disclosed in an SEC filing that it sold 826,670 shares of New Oriental Education (NYSE:EDU) last quarter.
What happened
According to a recent SEC filing, Cederberg Capital Ltd reduced its holding in New Oriental Education by 826,670 shares during the first quarter of 2026. The quarter-end value of the EDU position decreased by about $45 million, a figure that reflects both trading and stock price changes.
What else to know
- Top five holdings after the quarter:
- NASDAQ: NTES: $40.26 million (21.6% of AUM)
- NASDAQ: PDD: $39.15 million (21.0% of AUM)
- NASDAQ: ATAT: $33.15 million (17.8% of AUM)
- NYSEMKT: SVM: $23.83 million (12.8% of AUM)
- NASDAQ: ACMR: $23.58 million (12.7% of AUM)
- As of Friday, EDU shares were priced at $45.79, down about 3% over the past year and well underperforming the S&P 500, which is instead up about 28%.
Company overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $5.4 billion |
| Net income (TTM) | $420.1 million |
| Dividend yield | 2.5% |
| Price (as of Friday) | $45.79 |
Company snapshot
- New Oriental Education & Technology Group offers test preparation, after-school tutoring, language training, and online education services, with a focus on K-12 and language exam preparation.
- The firm generates revenue primarily through tuition fees for in-person and online courses, as well as educational materials and consulting services.
- It serves students in China preparing for domestic and international exams, with additional offerings for children, high school students, and adult learners.
New Oriental Education is one of China's largest private education providers, operating a broad network of schools and learning centers. The company leverages its established brand and diversified service portfolio to address a wide range of educational needs, from test preparation to language training. Its scale and integrated online-offline delivery model position it as a leading player in China's competitive education sector.
What this transaction means for investors
It’s important to note here that Cederberg remains heavily concentrated in Chinese internet and consumer names, and the reduction comes despite a quarter that showed accelerating growth and improving profitability. New Oriental delivered third-quarter revenue of $1.42 billion, up nearly 20% year over year, while operating income climbed 45% to $180 million and net income rose 45% to $127 million. Management pointed to growth across overseas test preparation, adult education, and newer educational initiatives, which expanded 23% from a year ago. The company also continues to integrate AI throughout its educational ecosystem to improve both teaching outcomes and operating efficiency.
Importantly, New Oriental is also returning capital to shareholders. The company approved another dividend payment and had repurchased roughly $184 million of stock under its buyback program as of April 21.
For long-term investors, the more interesting story may be the disconnect between operating performance and stock performance. While the shares have lagged the broader market, New Oriental raised full-year revenue guidance and finished the quarter with more than $5.2 billion in cash, deposits, and short-term investments. That should bode well once sentiment improves.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends NetEase. The Motley Fool has a disclosure policy.
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