Events:

From January to September 2022, the company achieved operating income of 337 million yuan, a decrease of 26.05% over the same period last year, a net profit of 39.0027 million yuan, a decrease of 30.3% over the same period last year, and basic earnings per share of 0.04 yuan, a decrease of 20.0% over the same period last year.

Comments:

The overall performance improved month-on-month, and the growth level of revenue, net profit and home net profit of the transitional new economy business improved during the reporting period. this is mainly due to the comprehensive impact that Bolui Experimental School and Jiurui University in Jiudu District are no longer included in the scope of merger since September 1, 2021. Overall, 22 years is the later stage of the transition of the company's business from traditional media to digital creative business. the overall pattern of the future business has been basically established. It is expected that the overall performance of the company will continue to improve in the fourth quarter of this year, and the results of business transformation will gradually appear.

In terms of three fees, the company's sales expenses increased in the third quarter compared with the previous quarter, while administrative expenses and financial expenses improved, and remained stable as a whole. In addition, the company's gross profit margin and net profit margin in the third quarter are also improving.

Profit Forecast and Investment rating

We believe that the company's current strategy of "intelligent education, digital cultural creation and modern media" is continuing to advance. The digital new economy business represented by Chengdu Wen Exchange launched the launch of digital publishing products on October 26th, which has certain development potential. To sum up, we continue to give the company an investment rating of "overweight". It is estimated that the company's EPS will be 0.08,0.10 and 0.14 yuan per share respectively from 2022 to 2024.

Risk hint

Business development is not up to expectations, the advertising and game industries remain in the doldrums, the bad debt rate of small loan business has increased significantly, external mergers and acquisitions and project landing are uncertain in the later stage, and the impact of the epidemic.