Guosheng: Initiating coverage of ABLE DIGITAL (02687) with a "Buy" rating as market penetration steadily improves.

Guosheng released a research report stating that ABLE DIGITAL (02687), as a leading knowledge digitalization solution provider in China, builds core barriers based on products such as knowledge graphs and intelligent agents, continuously optimizes its product structure, and steadily increases its market penetration. Revenue is expected to reach 1.33 billion, 1.8 billion, and 2.42 billion yuan respectively from 2026 to 2028, with year-on-year growth rates of +36.8%, +35.7%, and +34.5%; net profit attributable to the parent company is expected to be 200 million, 280 million, and 420 million yuan respectively, with year-on-year growth rates of +51.9%, +43.9%, and +48.1%. This is the first coverage, and a "Buy" rating is given. Guosheng's main points are as follows: Overview: Deeply cultivating the digitalization field of higher education, building comprehensive service capabilities Shanghai ABLE DIGITAL, established in 2008, is a provider of teaching digitalization solutions for higher education institutions in China and has continuously laid out around digital educational content, digital teaching environment services, and products. After years of industry accumulation, the company has formed a higher education digital business system with a wide coverage of disciplines, rich application scenarios, and a complete service chain. By 2025, the number of clients served by the company is expected to reach 1,797, generating a revenue of 970 million yuan, a year-on-year increase of 14.3%, with a net profit attributable to the parent company of 130 million yuan, a year-on-year increase of 23.9%. Industry: Policy-driven development, AI empowering industry transformation The country has successively introduced relevant policies to continuously promote the digital transformation in the education sector, accelerating the deep integration of digital technology with education and teaching, providing policy support for industry development. The rapid development of artificial intelligence technology has brought new opportunities to the education industry. Technologies such as large AI models, knowledge graphs, and intelligent agents are gradually applied in scenarios such as teaching content production, learning assistance, teaching evaluation, and educational management, promoting continuous upgrades in education service models and teaching processes. Higher education, characterized by rich data resources and diverse application scenarios, is an important area for the implementation of artificial intelligence technology, and the integration of educational digitalization and intelligence is expected to further open up long-term growth space for the industry. Advantages: Constructing multidimensional barriers through products, data, and client ecosystems 1) Knowledge graphs and intelligent agents accelerate implementation; product structure optimization. The company has deepened its focus on the digitalization of higher education, forming a diverse product system covering digital courses, virtual simulations, knowledge graphs, intelligent agents, and AI cloud LMS. Among these, revenue from the knowledge graph business is projected to be +68.5% year-on-year in 2025, accounting for 570 million yuan or 59.2%; the intelligent agent business is expected to deliver over 500 projects in 2025, serving as a key driver for optimizing the product structure. 2) Accumulating scarce educational data to solidify the foundation for AI applications. Thanks to years of service experience in higher education, the company supports vertical AI model training and implementation with high-quality teaching outcome data and structured knowledge assets. The self-developed AI model "Damingbai" will commence limited testing on March 29, 2026. Additionally, the company collaborates deeply with Alibaba, ByteDance, and Baidu to further enhance product intelligence and accelerate the integration of artificial intelligence technology with educational application scenarios. 3) Focusing on top universities to build a national service network and profound industry insights. The company has long-term services for quality universities and possesses a deep understanding of teaching digitalization. As of June 30, 2025, ABLE DIGITAL has established 251 customer service and support centers in 95 cities. Leveraging its nationwide service network, the company can accurately match client needs and facilitate rapid product iteration. 4) Expanding application boundaries to create growth space. The company, relying on quality data assets and intelligent technology capabilities, collaborates with industry leaders such as Siemens and BYD Company Limited to broaden its business boundaries.