Core Viewpoint - The company is experiencing short-term pressure on its business performance, but it maintains a sufficient order backlog and is actively pursuing strategic expansion through AI and a new school plan [3][4][6]. Financial Performance - In H1 2025, the company achieved revenue of 340 million yuan, a year-on-year decrease of 11.7%, and a net profit attributable to shareholders of 130 million yuan, down 3.5% year-on-year [3]. - In Q2 2025, the company reported revenue of 210 million yuan, a decline of 14.2% year-on-year, and a net profit of 100 million yuan, down 8.1% year-on-year [3]. - The company's cash received from sales and services in H1 2025 was 338 million yuan, a decrease of 25.13% year-on-year, likely due to reduced payment willingness from some enterprises [4]. Business Segments - Revenue from management training, consulting, and book sales in H1 2025 was 285 million, 54 million, and 4 million yuan, respectively, showing year-on-year changes of -8.88%, -25.56%, and +33.43% [4]. - The company continues to implement a large client strategy, focusing on industry and regional leaders, with a contract liability balance of 1.059 billion yuan as of H1 2025, an increase of 5.83% compared to H1 2024 [4]. Profitability and Dividends - The gross profit margin for H1 2025 was 77.49%, an increase of 1.35 percentage points year-on-year, primarily due to a decrease in the proportion of low-margin consulting revenue [5]. - The net profit margin for H1 2025 reached 38.28%, up 2.95 percentage points year-on-year, supported by changes in the fair value of financial assets and increased investment income [5]. - The company plans to distribute a cash dividend of 119 million yuan for H1 2025, representing 90.74% of the net profit attributable to shareholders [5]. Strategic Initiatives - The company is advancing its "Effective Education + AI" strategy, with significant improvements in employee retention and sales performance attributed to AI systems [6]. - The "Hundred School Plan" aims to establish 100 branches in key cities over the next 3-5 years, with successful replication of management and a core team already in place [6].

Core Viewpoint - Action Education reported a decline in revenue for the first half of 2025, but showed improvement in profitability metrics such as gross margin and net margin [2][8]. Financial Overview - Total revenue for the period was 344 million yuan, a year-on-year decrease of 11.68% - Net profit attributable to shareholders was 131 million yuan, down 3.51% year-on-year - Non-recurring net profit was 120 million yuan, a decline of 11.61% year-on-year - In Q2, total revenue was 213 million yuan, a decrease of 14.22% year-on-year - Q2 net profit attributable to shareholders was 103 million yuan, down 8.06% year-on-year - Q2 non-recurring net profit was approximately 97.31 million yuan, a decline of 12.1% year-on-year - Gross margin improved to 77.49%, an increase of 1.77% year-on-year - Net margin increased to 38.28%, up 8.35% year-on-year [2][9]. Cash Flow Situation - Operating cash flow per share was 0.57 yuan, a significant decrease of 61.28% compared to the same period last year - Cash and cash equivalents amounted to 1.349 billion yuan, an increase of 3.44% year-on-year [4]. Accounts Receivable and Debt - Accounts receivable stood at 294,300 yuan, a year-on-year increase of 238.05% - Interest-bearing debt was 14.0367 million yuan, up 12.83% year-on-year [5]. Main Business Composition - Revenue from management training was 285 million yuan, accounting for 82.99% of total revenue with a gross margin of 84.33% - Revenue from management consulting was approximately 54.44 million yuan, making up 15.83% of total revenue with a gross margin of 46.55% [6]. Development Outlook - The company is transitioning from "Effective Education" to "Effective Education + AI," aiming to build an intelligent management ecosystem - A comprehensive AI initiative for core business processes has been launched, along with a "Hundred Schools Plan" to establish 100 branches in key cities over the next 3-5 years - The goal is to empower 10,000 enterprises to become AI organizations and train 1 million AI managers within three years [7]. Summary - Overall, while Action Education faced revenue decline in the first half of 2025, it managed to improve its profitability metrics. However, the significant drop in operating cash flow raises concerns about future cash management [8].

Investment Rating - The report maintains a "Buy" rating for the company, indicating a favorable outlook for investment returns over the next 6-12 months [5]. Core Insights - The company experienced a decline in revenue and net profit in the first half of 2025, with revenue at 340 million yuan, down 11.7% year-on-year, and net profit at 130 million yuan, down 3.5% year-on-year [1]. - Despite short-term business pressures, the company has a solid order backlog, with contract liabilities amounting to 1.059 billion yuan, reflecting a 5.83% increase compared to the same period last year [1]. - The company is actively pursuing an AI-driven strategic transformation, which has shown significant results in improving employee retention and marketing efficiency [3]. Summary by Sections Financial Performance - In H1 2025, the company's gross margin was 77.49%, an increase of 1.35 percentage points year-on-year, primarily due to a decrease in the proportion of low-margin consulting revenue [2]. - The net profit margin for H1 2025 reached 38.28%, up 2.95 percentage points year-on-year, aided by changes in the fair value of financial assets and increased investment income [2]. - The company plans to distribute a cash dividend of 119 million yuan, representing 90.74% of net profit attributable to shareholders [2]. Strategic Initiatives - The company is advancing its "Effective Education + AI" strategy, with plans to open 100 branches in key cities over the next 3-5 years, showing strong market expansion potential [3]. - AI implementation has led to a 16% increase in employee retention and a 46% growth in sales performance in H1 2025 [3]. Profit Forecast and Valuation - The profit forecasts for 2025-2027 have been adjusted to 294 million yuan, 334 million yuan, and 371 million yuan, respectively, reflecting a slight downward revision [3]. - The estimated EPS for 2025-2027 is projected to be 2.46 yuan, 2.80 yuan, and 3.11 yuan, with corresponding P/E ratios of 15x, 13x, and 12x [3].