Phillip Securities has recently issued a research report on ABLE DIGITAL (02687.HK), focusing on its strategic positioning and growth potential within China's higher education AI-native application sector.
The report identifies the company as a leader in this field. Since launching its core brand "Smart Tree" in 2013, it was a pioneer in entering the university MOOC and credit course sharing market, establishing a nationwide digital educational content network. The company's self-developed large language model, "Damingbai," which received regulatory filing from the Cyberspace Administration of China in 2015, signifies its transformation from a content service provider into an AI-native educational technology platform.
The analysis highlights that by utilizing its proprietary "Damingbai" model and knowledge graph as core engines, the company has amassed structured knowledge data and "expert reasoning chain" assets across 12 major academic disciplines and 92 specialties. This creates a vertical barrier difficult for general-purpose large models to replicate, forming a self-reinforcing virtuous cycle of "data-model-scenario." This enables the large-scale monetization of high-margin educational content, driving a significant improvement in profitability. It is projected to boost the overall gross margin by 3.55 percentage points to 65.5% in 2025, with net profit attributable to shareholders surging 24% year-on-year to 130 million RMB. The net profit margin is expected to increase by 1 percentage point to 13.4%.
Furthermore, the report notes that the penetration rate of digitization in China's higher education remains relatively low, indicating substantial room for growth. The company is deeply aligned with the national "Education Power" strategy. Leveraging its coverage of 79.4% of "Double First-Class" universities, it is poised to continuously benefit from the increased mandatory investment in AI infrastructure by universities. This supports the strategic upgrade of its business from content digitization to an AI-driven platform model. In June, the company's decision to repurchase up to 10% of its shares signals management's confidence in its future prospects.
Based on Phillip Securities' valuation analysis, the suggested buy reference price is 145.50 HKD, with a target price of 175.00 HKD and a stop-loss price of 130.00 HKD.