Utilization growth, how much further room can we drive here? And the price hikes, if any? And how shall we think about, say, next two to three years annual growth for the old businesses from here?
Stephen Yang: Thank you. For the existing business such as the overseas test grad, overseas consulting, and the adult and the university students business, I think let’s analysis the market like this. On demand side, we have seen the strong demand for the overseas test rep consulting business and for the college business. And on supply side, after the COVID and the policy, we have seen a lot of players disappear from the market. So that means we’re facing less competition. So I think the existing business, including the overseas related business and the adult and college students business, I think we will generate the top line growth very good in the next two to three years. So we are quite optimistic about the top line growth and the margin expansion for the existing business.
And as for the utilization rates, right. And for overall in this quarter in Q1, Q1 is the high season of the educational product. So in Q One, the utilization rate in Q1 is somewhere around 65%. So that means the two thirds. But I think we have a long way to go. And you know, as I said, in this fiscal year we’ll plan to open 15% to 20% new capacity. But our top line growth is we beat the guidance every quarter and then we raise guidance of the whole year top line growth. I think the healthy top line growth will cover the rentals of the new capacity. So that means we do have the operating leverage in hand. And going forward, I think you will see more operating leverage for all business lines. It will drive the margin up. Thank you.
Operator: Thank you. [Operator Instructions] We are now approaching the end of the conference. I would now turn the call over to New Oriental’s Executive President and Chief Financial Officer Stephen Yang for his closing remarks.
Stephen Yang: Again, thank you for joining us today. If you have any further questions, please do.
Sisi Zhao: Operator, we probably have one more question from…
Operator: All right. Okay, thank you. One moment for our next question. A question from Kan Wang with CICC. Your line is now open.
Kan Wang: Hi, Stephen, Sisi, good evening. This is Kan Wang from CICC. So congrats on very strong set of results. So I just have a quick question. Our Intelligent learning devices, so we’ve seen that the active PEC users this quarter had a quite impressive growth, like double Q on Q. So actually, what is driving such a strong growth and how would we expect this business in the medium term? Thank you.
Sisi Zhao: Okay. Yeah, actually we’re very satisfied with the development of the new initiatives, especially for this kind of targeting younger kids like K-12 students, new initiatives like the new intelligent Learning device business. Last year we rolled out in almost all the cities and now we’re seeing a huge demand for the service. It’s quite innovative in terms of the offering, using all the technologies that we accumulated in last several years, that we have the cutting edge technology and content as well, and offering students a unique experience that helps students to enhance their academic study ability, especially self study ability as well. So actually, the demands in all kinds of cities, high tiers, low tiers, are all very strong.
And we are confidence in this kind of user. We are confidence in this kind of user number increase improvement year over year. And definitely we’re also in the process of enhancing the quality of our products and the services as well. So we will make efforts in increasing the user number as well as enhancing this kind of subscribing fee renewal rates as well. And also we want to expand to more subjects for all the existing users. So, in summary, actually the high demand and also the best content and technology and all the service are the fundamental for the development for this new initiative. And we will try to continue to enhance the quality and try to maintain this kind of healthy growth for this new initiative.
Kan Wang: Okay, thank you, Sisi.
Operator: Thank you. One moment for our next question. Our next question will come from the line of DS Kim with JP Morgan. Your line is now open.
DS Kim: Hi, sorry, can I follow up one more question here regarding share holder return policy. I do think that our stock is very cheap still, but I noticed that the buyback activity past three months has been pretty minimal. I’m just wondering, given the stock rally so far, have you considered shifting the policy a little toward dividend or some other way? Or are we going to keep reiterating this buyback policy for the rest of the year and next year? Thank you.
Stephen Yang: Yeah. As you know, we announced a $400 million share buyback plan so far, we finished $193.4 million, and I think we will buy more shares going forward in the rest of this year. And as always, we aim to create more values to the shareholders on capital return side. Thank you, DS.
Operator: Thank you. [Operator Instructions] We are approaching the end of the conference call. I will now turn the call over to new Oriental’s Executive President and Chief Financial Officer Stephen Yang for his closing remarks.
Stephen Yang: Again, thank you for joining us today. If I have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you.
Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect everyone. Have a wonderful day.+
