Brief comment on performance
Xinhua Media achieved operating income of 959 million yuan in the first half of the year, an increase of 0.14% over the same period last year, and net profit of 83.86 million yuan, down 6.05% from the same period last year.
Business analysis
The main business operates smoothly: in the company's main business, advertising revenue, which accounts for the largest proportion of revenue, decreased by 5.12% compared with the same period last year, which is related to the weak advertising growth in the real estate industry; the revenue from book distribution increased by 0.59% compared with the same period last year; the company's main business maintained stable operation, and the comprehensive gross profit margin decreased by 3.5 percentage points compared with the same period last year. Sales and management expenses increased slightly compared with last year, and the overall level remained stable. In the past two years, the company has actively tried new business type in digital publishing and cultural mall construction, seeking business transformation. due to cost input, the relevant project company will still experience losses at the initial stage of its establishment.
Adjust the business structure and coordinate the company's overall resource advantages: this year, the company has made greater efforts to adjust its internal business, including the integration of Shanghai Liberation Education business resources, the introduction of strategic investors to jointly cooperate in the Cheng Cheng project, and the extension to the upper and lower reaches of the real estate industry. to create a real estate integrated marketing service provider, as well as the restructuring of Yang Hang Media, and so on. The purpose of business model adjustment is to further combine the media resources that can be horizontally integrated with the upstream and downstream industrial chains to form multiple business sectors such as channel, real estate, education, life, cultural finance, and so on. At the same time, it also lays the industrial foundation for the cultural Mall format after the completion of Chengcheng cultural project-defining department stores with media, defining target customer groups, and defining the business model of the industry. Although the substantial adjustment of the main business structure can not produce immediate economic benefits in the short term, we believe that this slightly advanced industrial layout will help the company get rid of the current predicament of the development of print media in first-tier cities. enter a broader market space.
Profit adjustment and investment suggestions
We have lowered the company's profit forecast for 2011-2013 to 0.194 yuan, 0.213 yuan and 0.246 yuan respectively. Corresponding to the current stock price PE valuation is 34, 31, 27 times, which is in the average level of domestic media listed companies. In the short term, the company's business focus is still on the adjustment of the main business structure and the continuous layout of new business on the basis of maintaining stable operation; the company's long-term value finally needs to wait for the initial results of the series layout and the Chengdu culture project with innovative business model to be put into operation and begin to show its differentiated profitability. Give a "hold" rating.
