Action Education(SH:605098) CAITONG SECURITIES·2025-08-13 10:23Investment Rating - The investment rating for the company is upgraded to "Buy" [2] Core Views - The company is a leader in the corporate management training industry, actively refining its strategy and products while nurturing new talent to enhance overall operations [7] - The company has maintained a high dividend payout ratio, proposing a cash dividend of 10.00 yuan per 10 shares, totaling 1.19 billion yuan, which accounts for 90.74% of its net profit for the first half of 2025 [7] - The company aims to open 100 branches in key cities across the country within the next 3-5 years, leveraging AI to enhance its operational efficiency and educational effectiveness [7] Financial Performance - For the first half of 2025, the company reported a revenue of 344 million yuan, a year-over-year decrease of 11.68%, and a net profit of 131 million yuan, down 3.51% year-over-year [7] - The company’s gross margin improved to 79.77% in Q2 2025, an increase of 1.16 percentage points year-over-year, attributed to a decrease in the proportion of low-margin consulting services [7] - The company’s revenue is projected to grow from 672 million yuan in 2023 to 1.27 billion yuan in 2027, with a compound annual growth rate (CAGR) of 19.5% [6][8] Profit Forecast - The forecasted net profit for 2025 is 308 million yuan, with expected growth rates of 14.6%, 18.4%, and 22.8% for the years 2025, 2026, and 2027 respectively [6][7] - The earnings per share (EPS) is projected to increase from 1.86 yuan in 2023 to 3.75 yuan in 2027 [6][8] Market Performance - The company’s stock closed at 37.20 yuan as of August 12, 2025, with a price-to-earnings (PE) ratio of 14.4 for 2025 [2][6] - The company has shown a market performance of -6%, 3%, 12%, 21%, 30%, and 39% over the last 12 months compared to the CSI 300 index [4]