1. Q2 Earnings: A Closer Look at the Underperformance

Megastudy Education’s Q2 2025 revenue and operating profit missed market expectations by 2% and 4%, respectively. This is likely due to a combination of slowing growth in the education market, increased competition, and seasonal factors. However, operating profit and net income increased year-over-year, with net income showing growth compared to Q1 2025 as well.

2. Strong Fundamentals: Core Business Strength and Growth Potential

Despite the short-term earnings miss, Megastudy Education’s fundamentals remain strong. The high school division maintains market leadership based on strong brand recognition and a talented instructor pool, further enhanced by online/offline synergy. The company is also laying the groundwork for continued growth through new business expansion and restructuring of its employment services division.

3. Investment Strategy: Short-Term Risks vs. Long-Term Opportunities

In the short term, missing market expectations could lead to increased stock price volatility. However, from a medium- to long-term perspective, Megastudy Education remains an attractive investment. Considering the stable growth of its core business, the growth potential of new ventures, and its shareholder return policy, the current price dip could present a buying opportunity.

4. Action Plan for Investors

  • Focus on next quarter’s earnings: Closely monitor revenue and operating profit trends, as well as the performance of the high school and new business divisions.
  • Understand the company’s response to market changes: Analyze Megastudy Education’s strategies for addressing increased competition and government policy changes in the education market.
  • Monitor the performance of the employment services division: Pay close attention to profitability improvements and the effects of restructuring.