Performance data: In the first half of the year, the company achieved operating income of 988 million yuan, a year-on-year decrease of 7.7%; net profit of 89.25 million yuan, a year-on-year decrease of 11%, and basic earnings per share of 0.10 yuan. Performance analysis: (1) The decline in the company's performance stemmed from the decline in the newspaper distribution and advertising business in the first half of the year. Although the advertising business in the automobile, personal goods, home appliance stores, household appliances and other industries increased significantly in the first half of the year, the decline in advertising investment in the real estate industry, the largest customer of newspaper advertising, and fierce competition in the Shanghai print media market, newspaper distribution and advertising business revenue fell 12% and gross margin fell 1% in the first half of the year, which in turn led to a 19% year-on-year decline in the company's operating profit. Dependent on investment income and subsidy revenue, the company's performance declined by 11%; (2) the company's other performance declined by 11%; (2) the company's other The source of big profit is book distribution. After the adjustment and optimization of book distribution outlets in the previous two years, the company currently has nearly 200 direct-run outlets of different types, large, medium, and small, medium, etc. in Shanghai, such as a large bookstore and a small and medium-sized Xinhua bookstore. This year, the Songjiang Mediterranean Store, Pudong Securities Building Store, Minhang Longming Road Store, etc. have increased the business area by more than 1,800 square meters. Meanwhile, in the first half of the year, the company obtained total distribution rights for secondary vocational schools throughout the city. The company's book distribution business increased 7% year-on-year in the first half of the year, and the book distribution business developed in a positive trend. Prospects for the second half of the year: (1) The expansion of outlets in the book distribution business will still be carried out according to the strategy of “going big to small”, and 2009 was the low point of the company's book distribution business. Due to the low base effect, we expect the book distribution business to slowly break out of the trough in 2010 and will grow steadily; (2) the declining trend in the newspaper advertising business will continue in the first half of the year. Strong media such as the “Morning News” represented by the company have already occupied the main share of Shanghai newspaper advertisements, making it difficult to expand market share effectively, yet our largest customer in the advertising industry, the real estate industry advertising investment has decreased. meter Revenue from the newspaper advertising business fell 10% for the full year of 2010; (3) the new media business is being explored and operated. In April of this year, the company formed a joint venture with Jiefang Newspaper Group and Shanghai Edio to officially enter the field of mobile handheld reading terminal operations, launched its own brand “Yimo” e-reader, and also focused on building an online digital content distribution platform - “Xinhua e-Store”. Since it is still in the early stages of operation, it has contributed little to the company's performance. (4) The general environment that triggered changes in the company's fundamentals was the integration of the Shanghai newspaper market, but the progress of integration depends on policy promotion and the progress of the reform of the cultural industry system in Shanghai, where there is great uncertainty. Profit forecast and investment rating: We expect the company's net profit to drop slightly by 15% in 2010, diluted earnings per share to be 0.19 yuan, dynamic PE 46 times, and the valuation is 31 times higher than the industry valuation of print media, but considering that the company is undergoing transformation, we maintain a “recommended” investment rating. Risk warning: Newspaper advertising business and book distribution business are impacted by new media.