Half-yearly reported that net profit increased by 90%, and the internal reform achieved remarkable results. In the first half of 2016, the company achieved revenue of 832 million yuan, an increase of 10.11% over the same period last year, net profit of 50.4986 million yuan, up 90.27%, and non-net profit of 103.91817 million yuan, an increase of 159.42% over the same period last year. The company benefited from the completion of the formation of the new internal management, and the original main business was reformed and upgraded. On the basis of the increase in revenue over the same period last year, receivables decreased by 11.05%, sales management expenses decreased by 4.11%, and the company's profitability improved significantly.
Internal reform to promote development, based on teaching materials to assist the development of large education. The company deepens the reform and innovation of the education industry, sets up a large educational publishing reform leading group, co-ordinates teaching materials, teaching aids and other educational publishing related work, improves the production and management of teaching materials, and cooperates with the links of "collection, printing and distribution". The production cycle is greatly ahead of schedule, innovating the teaching material management system, and allocating the rental textbook management rights of Renyin Society, people's Beauty Society and China Library Society to many publishing units of the company. Maximize the dividend brought by the textbook reform.
The traditional publishing and distribution business will be upgraded, and digital products will expand online channels. The large publishing industry has implemented the guidelines of high-quality products and creating famous brands, and the company has selected more than 30 experts and industry authorities to form a topic selection advisory committee, forming a "think tank" for publishing topics. The sales of the large-scale "scholarly Liaoning" series of books in the Book City increased by 81% from January to June, and the sales volume in June increased by 207% compared with the same period last year. The large distribution industry is mainly based on traditional offline channels, with synchronous layout to online and offline channels, speeding up the transformation of digital publishing, while expanding e-commerce sales channels. Children's Society and Spring Wind Society have achieved remarkable results.
Increase the operation of external capital and speed up the "second venture" of diversified operation. On May 11, 2016, the company set up Hongbo Fund with Liaoning Hongbo Investment and other companies, with an initial size of 500 million yuan, with the company contributing 200 million yuan, focusing on the cultural industry, new media and other emerging industries. During the reporting period, the company participated in the establishment of Rongsheng property insurance, with an investment of 140 million yuan, accounting for 14% of the total share capital, plus the previously completed investment projects of Zhongtian Securities and Tieling Village Bank. The financial industry investment covers "banking, securities, insurance", and the layout of "culture + finance" has been initially completed. In addition, the company's first children's experience project, "Big ear Wizarding Empire", which integrates education, high-tech experience and leisure and entertainment, has been settled in the trade-intensive middle street area of Shenyang and officially put into operation. it has taken a solid first step towards the pan-entertainment industry.
Profit forecast. It is estimated that the EPS of the company from 2016 to 2018 is 0.17,0.19 and 0.21 yuan respectively. Referring to the same industry, Southern Media, China Media Holdings and Reader Media unanimously expected PE to be 31 times, 42 times and 51 times respectively in 2016. In view of the small market capitalization of the company, the recent transformation measures have been implemented one by one, and the reform and transformation is strong, we value the company 62 times in 2016, corresponding to the target price of 10.54 yuan. Give an overweight rating.
Risk hint. Market systemic risks, the layout of the pan-entertainment industry is not up to expectations.