SecProbe.io

United States securities and exchange commission logo
May 5, 2023
Chenggang Zhou
Chief Executive Officer
New Oriental Education & Technology Group Inc.
No. 6 Hai Dian Zhong Street
Haidian District
Beijing 100080
People’s Republic of China
Re:New Oriental Education & Technology Group Inc.
Form 20-F for Fiscal Year Ended May 31, 2022
Filed September 29, 2022
File No. 001-32993
Dear Chenggang Zhou:
            We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with information so we may better understand your
disclosure.
            Please respond to these comments within ten business days by providing the requested
information or advise us as soon as possible when you will respond.  If you do not believe our
comments apply to your facts and circumstances, please tell us why in your response.
            After reviewing your response to these comments, we may have additional comments.
Form 20-F for Fiscal Year Ended May 31, 2022
Item 3. Key Information, page 3
1.We note your disclosure on page 1 where the defined terms "we" and "our" are used to
describe the "operations" of the VIEs. In future filings, please ensure that references to the
VIEs make clear that while the VIEs conduct operations in China, that the VIEs
are consolidated for accounting purposes and that the holding company does not conduct
operations. In addition, we note your definition of "China" does not include Hong Kong.
Please revise the definition to clarify that the legal and operational risks associated with
operating in China also apply to any operations in Hong Kong. We also note that you have
a school located in Hong Kong and are listed on the Hong Kong Stock Exchange; please
discuss in future filings, the applicable laws and regulations in Hong Kong as well as the
related risks and consequences. Examples of applicable laws and regulations include, but

 FirstName LastNameChenggang Zhou
 Comapany NameNew Oriental Education & Technology Group Inc.
 May 5, 2023 Page 2
 FirstName LastNameChenggang Zhou
New Oriental Education & Technology Group Inc.
May 5, 2023
Page 2
are not limited to:
•Enforceability of civil liabilities in Hong Kong;
•China’s Enterprise Tax Law ("EIT Law");
•Regulatory actions related to data security or anti-monopoly concerns in Hong Kong
and their potential impact on your ability to conduct business, accept foreign
investment or list on a U.S./foreign exchange; and
•Risk factor disclosure explaining whether there are laws/regulations in Hong Kong
that result in oversight over data security, how this oversight impacts the company’s
business, and to what extent the company believes that it is compliant with the
regulations or policies that have been issued.
2.We note that on pages 81 to 84 you provide a description of your contractual
arrangements with New Oriental China and Beijing Xuncheng. In future filings, please
also provide such disclosure in this section.  Additionally, with respect to the included
structure chart, please identify the persons that own the equity of Seven Limited
Partnerships and Linzhi Tencent Technology Co., Ltd.
Permissions Required from the PRC Authorities for Our Operations, page 6
3.In future filings, disclose each permission or approval that you, your subsidiaries, or the
VIEs are required to obtain from Chinese authorities to operate your business. As one
example only, you state on page 29 that your new business segment "DONG FANG
ZHEN XUAN" requires permissions under the PRC Food Safety Law and PRC Product
Quality Law. In addition, we note that you do not appear to have relied upon an opinion of
counsel with respect to your conclusions that you have obtained the requisite permissions
and approvals to operate your business. If true, state as much and explain why such an
opinion was not obtained.
4.We note your disclosure that you "believe [your] PRC subsidiaries and the consolidated
affiliated entities have obtained the requisite licenses and permits from the PRC
government authorities that are material for the business operations in China, including,
among others, the private school operation permits and license for internet information
services, or ICP license."  The disclosure here should not be qualified by materiality.  In
future filings, please make appropriate revisions to your disclosure.
5.We note that the CSRC has recently announced regulations that outline the terms under
which China-based companies can conduct offerings and/or list overseas. In future filings,
please revise your disclosure to reflect these recent events and explain how the regulations
apply to you and your ability to operate and offer securities.
Cash and Asset Flows through our Organization, page 7
6.In future filings, please amend your disclosure here and in the risk factors section to state
that, to the extent cash or assets in the business is in the PRC/Hong Kong or a PRC/Hong
Kong entity, the funds or assets may not be available to fund operations or for other use
outside of the PRC/Hong Kong due to interventions in or the imposition of restrictions

 FirstName LastNameChenggang Zhou
 Comapany NameNew Oriental Education & Technology Group Inc.
 May 5, 2023 Page 3
 FirstName LastName
Chenggang Zhou
New Oriental Education & Technology Group Inc.
May 5, 2023
Page 3
and limitations on the ability of you, your subsidiaries, or the consolidated VIEs by the
PRC government to transfer cash or assets. In this section, provide cross-references to
these other discussions and to the condensed consolidating schedule and the consolidated
financial statements.
The Holding Foreign Companies Accountable Act, page 7
7.We note your disclosure in paragraph 4 of page 5 that you are subject to complex and
evolving PRC laws and regulations as well as your disclosure here regarding your and
your auditor's compliance with the Holding Foreign Companies Accountable Act. In
future filings, please also disclose here, the location of your auditor's headquarters as well
as updates to account for the changes to the Holding Foreign Companies Accountable Act
made in the Consolidated Appropriations Act, 2023.
D. Risk Factors
Summary of Risk Factors, page 14
8.In future filings, in the summary of risk factors, specifically discuss risks arising from the
risk that the Chinese government may exert more control over offerings conducted
overseas and/or foreign investment in China-based issuers, which could result in a
material change in your operations and/or the value of your securities. Acknowledge any
risks that any actions by the Chinese government to exert more oversight and control over
offerings that are conducted overseas and/or foreign investment in China-based issuers
could significantly limit or completely hinder your ability to offer or continue to offer
securities to investors and cause the value of such securities to significantly decline or be
worthless. With respect to the summarized risk factors, include specific cross-references
to the more detailed discussion of these risks in the filing.
Risks Related to our Business
Failure to comply with governmental regulation and other legal obligations concerning privacy,
data protection and cybersecurity may..., page 25
9.In light of recent events indicating greater oversight by the Cyberspace Administration of
China (CAC) over data security, particularly for companies seeking to list on a foreign
exchange, please revise your disclosure to explain how this oversight impacts your
business and to what extent you believe that you are compliant with the regulations or
policies that have been issued by the CAC to date. In addition, we note that you do not
appear to have relied upon an opinion of counsel with respect to your conclusions that you
are compliant with the permissions and approvals of the CAC. If true, state as much and
explain why such an opinion was not obtained.

 FirstName LastNameChenggang Zhou
 Comapany NameNew Oriental Education & Technology Group Inc.
 May 5, 2023 Page 4
 FirstName LastName
Chenggang Zhou
New Oriental Education & Technology Group Inc.
May 5, 2023
Page 4
Risks Related to Doing Business in China
Our ADSs will be prohibited from trading in the United States under the Holding Foreign
Companies Accountable Act, or the HFCAA, in 2024..., page 45
10.We note your disclosure about the Holding Foreign Companies Accountable Act. In future
filings, please expand your risk factors to disclose that the Holding Foreign Companies
Accountable Act, as amended by the Consolidated Appropriations Act, 2023, decreases
the number of consecutive “non-inspection years” from three years to two years, and thus
reduces the time before your securities may be prohibited from trading or delisted. In
addition, please disclose that the Commission conclusively identified you as
a “Commission Identified Issuer” on October 21, 2022. Your revised disclosure should
explain why you were identified and provide any additional context necessary for
investors to understand the meaning and significance to your operations of this
determination. Update your disclosure to describe the potential consequences to you if the
PRC adopts positions at any time in the future that would prevent the PCAOB from
continuing to inspect or investigate completely accounting firms headquartered in
mainland China or Hong Kong.
General
11.In future filings, please refrain from implying that the contractual agreements are
equivalent to equity ownership in the businesses of the VIEs. Any references to control or
benefits that accrue to you because of the VIEs should be limited to a clear description of
the conditions you have satisfied for consolidation of the VIE under U.S. GAAP.
Additionally, your disclosure should clarify that you are the primary beneficiary of the
VIE for accounting purposes. Some non-exclusive examples include:
•On page 3, you state that you rely on the VIE contracts to "control the business
operations" of the VIE entities;
•On page 30, you reference being enabled by the VIE contracts to "have power to
direct the activities" of the VIE entities;
•On page 32, you suggest contractual agreements could be as effective as equity
ownership by stating that they "may" not be as effective as equity ownership;
•On page 81, you refer to having the "power to direct the activities" of New Oriental
China;
•On page 82, you refer to having the "power to direct the activities" of Beijing
Xuncheng; and
•On page 119, you state that you "control" the "management decisions" of the VIE
entities.

 FirstName LastNameChenggang Zhou
 Comapany NameNew Oriental Education & Technology Group Inc.
 May 5, 2023 Page 5
 FirstName LastName
Chenggang Zhou
New Oriental Education & Technology Group Inc.
May 5, 2023
Page 5
            We remind you that the company and its management are responsible for the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action or absence of
action by the staff.
            You may contact Suying Li at 202-551-3335 or Angela Lumley at 202-551-3398 if you
have questions regarding comments on the financial statements and related matters. Please
contact Nicholas Nalbantian at 202-551-7470 or Donald Field at 202-551-3680 with any other
questions.
Sincerely,
Division of Corporation Finance
Office of Trade & Services
cc:       Haiping Li