Core views:
The company released its 2022 mid-year report results: 22H1 achieved revenue of 1,091 million yuan, a decrease of 6.72% over the previous year; Guimu's net profit was 158 million yuan, a decrease of 27.68% over the previous year; after deducting net profit of non-Gumo's net profit of 152 million yuan, a decrease of 29.75% over the previous year. 22Q2 achieved revenue of 721 million yuan, a decrease of 9.58% over the previous year; net profit of Gimu was 139 million yuan, a decrease of 28.61% over the previous year; after deducting net profit of Fugimo was 133 million yuan, a decrease of 31.00% over the previous year.
The pandemic+double reduction policy affects short-term performance. 22H1's main book business achieved revenue of 500 million yuan, a year-on-year decrease of 15.60%, and gross margin decreased by 3.71 pct compared to the same period last year. The decline in performance was mainly due to the impact of the epidemic and the impact of the “double reduction” policy on Longmen Bookstore's teaching and support business. Longmen Bookstore is adjusting its business strategy, transforming and expanding its textbook business, and creating new growth points.
Internal and external linkages enhance academic influence. During the reporting period, the company actively implemented the spirit of documents such as “Opinions on Deepening Reform and Cultivating World-Class Science and Technology Journals”, and the academic influence of its journals reached a new high. The SCI impact factor of the “National Science Review” published by the company increased again from 17.275 to 23.178, and the “Science Bulletin” increased to 20.577. Twenty-seven types of journals published by the company's overseas branch, EDP Sciences in France, were included in SCI. 20 journals from the company's joint venture with Elsevier received influence factors, an average increase of 26%, and 79 journals included on the SciEngine platform developed independently by the company.
Profit forecasts and investment recommendations. We expect the company's revenue for 2022-2024 to be 2,689/28.52/2,996 million yuan, net profit of 489/526/559 million yuan, and the PE corresponding to the closing price on August 26, 2022 is 12.47 X/11.59 X/10.91 X. As the leading professional publishing company in China, China Science Chuan continues to enhance its academic influence through internal and external linkages. Short-term performance has been impacted by both the pandemic and the double reduction policy. In the long run, the company's demand is relatively stable and has deep academic value and economic value. We maintain the company's PE valuation 15 times that of 2022, the corresponding reasonable value of the company is 9.27 yuan/share, and maintain the “buy” rating.
Risk warning. Impact of the epidemic; digital projects falling short of expectations; risk of cooperation between overseas institutions; changes in industry regulatory policies.