Guojin Securities: Education industry policy, performance, and AI resonance, K12 is expected to take the lead in large-scale implementation

The Zhitong Finance App learned that Guojin Securities released a research report saying that the current policy environment is stable, offline production capacity of leading institutions has recovered, and operating efficiency has improved. In the medium to long term, the K12 industry still benefits from demand resilience, supply pattern optimization, and product upgrades. AI is expected to further improve teaching efficiency and expand personalized learning scenarios; vocational education benefits from employment training policy support and skill iterative demand brought about by new technologies such as AI, and the room for growth is expected to gradually open up.

Guojin Securities's main views are as follows:

There have been positive changes in the policy environment, fundamentals, and AI logic in the education industry

The industry's investment logic is gradually shifting towards fundamental restoration and incremental opportunities brought about by new technology. After early supply clean-up and business restructuring, some leading institutions have formed new business layouts such as non-subject education, all-age education services, and “course+content+intelligent hardware”, and business performance has gradually improved. Since 2025, industry regulation has been further normalized and digitized, while support policies related to AI education, science and technology education, and vocational skills training have continued to be introduced to provide some support for medium- to long-term development.

Reviewing the development of the industry, the education industry has gone through the three stages of “rapid expansion - clear policies - business restructuring”

From 2010 to 2020, K12 education and training expanded rapidly; in 2021, the “double reduction” drove large-scale supply clearance in the industry. As of February 2022, offline subject training institutions were reduced by more than 92% compared to before the policy; from 2022 to 2024, leading institutions accelerated the transformation to non-subject education, research, smart hardware, and all-age education services. Since 2025, as supervision becomes normalized and leading new businesses gradually mature, the industry has been further repaired.

Leading revenue resumed rapid growth, and operating leverage drove profit release

After the supply was cleared, leading institutions relied on brands, teaching and research, teachers, and standardized operating systems to resume production capacity. The number of New Oriental Learning Centers increased from 663 in 2023 to 1,241 in 2025, and in the good future, from 331 in 2024 to 526 in 2025. The latest results further verify fundamental improvements: New Oriental FY26Q4 revenue of US$1,530 million/ +23.0%, net profit of US$62 million/ +775.8%; Good Future FY2027Q revenue of US$758 million/ +31.9%, net profit to mother of US$408 million/ +1207.2%. Revenue recovery is compounded by improved gross margin, increased cost efficiency, and increased capacity utilization. Leading profits are generally growing faster than revenue, and the industry is moving from the business restructuring stage to the profit realization stage.

AI is shifting from alternative concerns to teacher enhancement and product innovation, and K12 is expected to take the lead in large-scale implementation

Generative AI is being extended from single-point tools such as question search and correction to course preparation, academic analysis, question answering, and operation. K12 generates work, evaluation and interactive data at high frequency, which is naturally suitable for forming a closed loop of personalized learning. Good Future FY2026 learning content solution revenue increased 48.4% year-on-year, with more than 2 million active devices per FY2027Q1 learning equipment week; New Oriental relies on OMO systems and offline teaching networks to embed AI into teaching and operation processes. Leaders with teaching and research content, learning data, and teacher service capabilities have a competitive advantage.

AI skill iteration is expected to spawn a new round of vocational training demand

Enterprise AI applications are evolving from model calling to agents, system deployment, and workflow transformation, and AI skill requirements are also spreading from core technical positions to development, product, and business positions. According to PwC 2026 statistics, the number of jobs requiring AI skills increased by 69%, significantly faster than the 9% growth rate of the overall recruitment market; Lightcast estimates that in 2025, the share of recruitment with smart-related skills in the US increased by more than 280% year-on-year. Training requirements have also been upgraded from a single software skill to the integration of AI and professional ability. Intelligent education has formed a dual-brand matrix for AI development and AI application, and further lays out personalized intelligence courses, which is expected to benefit from job skill restructuring.

Risk Alerts

Policy changes, enrollment falls short of expectations, AI business implementation falls short of expectations, competition intensifies