Event description

The company today released its annual report for 2013: in 2013, the company achieved a total operating income of 1.6710069 billion yuan, down 11.15% from the same period last year; the net profit attributed to the owner of the parent company was 308.0062 million yuan, up 11.72% from the same period last year; EPS was 0.4451, up 11.72% from the same period last year. The company announced its 2013 dividend plan, which intends to pay a cash dividend of 1.5 yuan (including tax) for every 10 shares.

Comment

The performance is in line with expectations, and the traditional business remains stable. The decline in revenue in 2013 was mainly due to the impact of new media on the company's traditional business, print advertising and distribution, as well as a decline in revenue, as well as an increase in revenue. The performance of the company's three major businesses declined slightly and remained basically stable: the advertising business decreased 17.4% year-on-year, accounting for 57.93% of revenue; the issuance business dropped 5.8%, accounting for 22.54% of revenue; and the printing business decreased 2.76%, accounting for 12.96% of revenue.

The gross profit margin and expense rate changed slightly and remained stable. The gross profit margin in 2013 was 40.16%, an increase of 9.04% over the same period last year. The rate of sales expenses was 17.35%, up 3.09% from the same period last year; the rate of management expenses was 7.28%, down 0.29%; and the financial rate was-2.79%, down 0.94%. The company saved costs in 2013 and controlled the stability of the expense rate.

Expand, integrate and upgrade traditional business, subdivide the market and promote quality.

Expand periodical business. In 2013, the company launched Yishou Weekly and other supplements on the basis of the original journals, as well as projects such as the art entrepreneur trading platform and the "Food Corps"; built a community newspaper cluster and built 12 community newspaper networks; and cooperated with Korean companies to publish high-end lifestyle magazines in line with international standards. In 2014, the company will continue to consolidate the distribution of periodicals and stock advertising, sink the community newspaper cluster to the Pearl River Delta region, increase to 30 community newspaper networks, and promote the localization of excellent publications and the industrialization of the project.

Integrate and upgrade printing business. In 2013, the company integrated the internal printing business, set up the printing division, and built a large platform for the printing industry. In 2014, the company will transform and upgrade the equipment of the printing business, and will carry out commercial packaging and printing business.

Actively deploy the company's transformation and expand new business.

Enter the logistics industry and lay out the e-commerce industry chain. In 2013, the company took advantage of the distribution advantages of Guangzhou and the Pearl River Delta to develop the "last kilometer" distribution business and cooperate with e-commerce such as Tmall and SUNING; at the same time, the company cooperated with the ocean culture chain to create a three-dimensional "home convenience" chain brand of "offline entity, online e-commerce, newspaper mall". In addition, through the establishment of subsidiary Guangdong Chamber of Commerce Media, the company has established a print media + Mobile Internet + offline O2O entrepreneur service platform. In 2014, the company will make use of the publicity advantages of its media to further promote the layout of the e-commerce industry chain, and emphasize the need to pay attention to the cold chain logistics business with great market prospects.

Merger and acquisition of Champs Elysees, expand the field of new media + outdoor big screen. After the completion of the merger and acquisition in 2014, the two sides can borrow media resources from each other to integrate the advertising business of traditional media and outdoor LED large-screen media, and build an interactive advertising marketing platform.

Make use of media resources to create a "cloud lottery" platform. In 2013, the company used its sports lottery information resources such as "Football winners" to develop Internet lottery business; in 2014, the company will take advantage of the opportunity of the World Cup and the reader stock of its newspapers to launch online "Cloud Lottery" web and mobile APP, covering mainstream sports lottery varieties.

Set up subsidiaries and establish a "cloud game" platform. In 2013, the company set up a wholly-owned subsidiary, Guangyou Information, to carry out page games, mobile game agents, distribution, operation and other business. In 2014, the subsidiary will launch two operating platforms and information websites for mobile games and page games, and strive to act as agents for 1-2 page games and mobile games and transport 30-40 products throughout the year.

Digital operation, involved in cloud media services. In 2013, the company set up subsidiaries to carry out digital analysis business for the government, social groups and commercial enterprises, and plans to cooperate with universities to open cloud media collaborative laboratories. In 2014, the company will continue to promote big data and cloud information service project and implement the establishment and operation of the cooperative laboratory.

Profit forecast and valuation

We believe that the company regards the impact of new media on print media as an opportunity for development, actively deploys and implements enterprise transformation and business development, and strives to build a comprehensive media culture group integrating advertising, distribution and new media. We expect 2014 and 0.63 for 2014 and 0.63 for 2014 and 27 and 23 times for 2015PE, respectively; taking into account the increase in equity to 725199014 shares in 2014, 2014 and 2015EPS will be diluted to 0.53 and 0.60 in 2014, and 2015PE to 28 and 25 times, respectively. We give an overweight rating.

There are risks

New business risk; investment risk; integration business risk.