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New Oriental Education & Technology Group (EDU) has announced a significant expansion of its share repurchase program, increasing it from $400 million to $700 million, according to a Tuesday bourse filing. This move underscores the company’s commitment to enhancing shareholder value and reflects confidence in its ongoing financial health.
The board of New Oriental approved the upsized program, which now allows for the repurchase of up to $700 million worth of American Depositary Shares (ADSs) and/or common shares. To date, the company has already repurchased approximately $330.3 million of ADSs under the original buyback mandate. The expanded program will continue until May 31, 2025, providing ample time for the company to complete the share acquisitions.
The initial $400 million buyback program was launched in July 2022 to bolster shareholder value through the repurchase of ADSs and/or common shares. Given the positive response and the ongoing favourable market conditions, the company decided to extend the program for an additional two years, highlighting its dedication to returning capital to shareholders and reflecting its confidence in the company’s prospects.
The announcement of the increased buyback program comes amid a notable rise in the company’s share price. Shares of New Oriental Education & Technology closed nearly 11% higher on Tuesday, reflecting investor enthusiasm and confidence in the company’s strategic decision. This substantial increase in share price underscores the market’s positive reception of the company’s move to enhance shareholder value through a robust share repurchase initiative.
The expansion of New Oriental’s buyback program aligns with its strategic goals of improving shareholder returns and demonstrates a strong outlook on its financial performance and market position.