Action Education(SH:605098) GF SECURITIES·2024-02-21 16:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price of 59.5 CNY per share based on a 25x PE valuation for 2024 [2][15]. Core Insights - The company is expected to benefit from the recovery of confidence in the private economy, sustained demand from major clients, and is still in a low market penetration phase, indicating continued high growth potential. Projected net profits for 2023-2025 are 220 million, 280 million, and 360 million CNY, representing year-on-year growth of 100%, 27%, and 27% respectively [2][13]. - The company has made significant strides in its large client strategy, with expected order receipts of around 900 million CNY in 2023, and has established partnerships with notable clients such as Langjiu and Bosideng [13][14]. - The initiation of the drafting of the Private Economy Promotion Law is expected to boost entrepreneur confidence, which has previously constrained the company's valuation [13]. Financial Summary - Revenue growth is projected to rebound from a decline of 18.8% in 2022 to 52.4% in 2023, followed by 28.5% and 25.2% in 2024 and 2025 respectively [6][20]. - The company's net profit is expected to grow from 111 million CNY in 2022 to 224 million CNY in 2023, and further to 284 million CNY and 360 million CNY in 2024 and 2025 respectively, indicating a strong recovery [6][20]. - The company's EBITDA is projected to increase from 113 million CNY in 2022 to 250 million CNY in 2023, and continue to grow to 314 million CNY and 387 million CNY in 2024 and 2025 respectively [6][20].