Logical recommendation: the company is a vice-provincial publisher backed by Qingdao. Compared with other state-owned listed publishing companies, the company's general books account for more than 75% of revenue and its performance is more flexible. Among them, the children's plate has a base and growth, and Junichi Watanabe's works have the potential of popular style. In the aspect of teaching materials and auxiliary teaching, the level of the company's products is clear, and the teaching materials are based in Qingdao, radiating Shandong and facing the whole country.
General books: from 2016 to 2017, the revenue of general books increased by 17% and 12%, and the publication and circulation of periodicals, magazines and general books increased steadily. Focusing on high-end humanities publishing products + public reading materials + characteristic urban publishing products (food, health, chess and cards, women's fashion) + children's plate (children's books, children's periodicals), the company has advantages in subdividing the field of books. both brand power and best-selling. Signed exclusively by the famous Japanese writer Junichi Watanabe, the book "Japan + gender" has the potential of popular style. Qingdao Publishing House accounted for 0.75% of the book retail market in the first half of 2017, an increase of 0.14% over the same period last year, making it the ninth publishing house with the growth rate.
Teaching materials: clear levels, based in Qingdao, radiating Shandong, facing the whole country. Qingdao: the company has always been the main distributor and supplier of primary school teaching materials in Qingdao. At present, dozens of teaching materials have entered the local catalogue and first landed in Qingdao primary and secondary schools, and gradually entered the campus in Weihai, Rizhao and Dongying. Shandong Province: the company's "Primary School Mathematics" / Primary School Science "/ calligraphy practice Guide" has a market share of 70% and 100% in Shandong Province, providing a stable performance basis. Nationwide: the company has transformed and upgraded more than 60 kinds of books, such as the best-selling educational auxiliary products "Jiafenbao" / "training every day", and has a good sales momentum throughout the country. The marketing strategy of "tens of thousands of prefectures and cities, millions of districts and counties" helps the company to enter the national market.
New business type: create a matrix of offline cultural consumption scene, film and television extension of the book industry chain. From miniature unattended kiosks to medium-sized BC MIX bookstores to large-scale cultural Mall, the company's "urban cultural consumption service system" has been fully built and has the ability to replicate and export to other parts of Shandong and the whole country. Actively promote film and television projects + investment funds to open up the company's imagination.
Profit forecast and investment advice. It is estimated that the EPS of the company from 2018 to 2020 will be 0.52 RMB 0.58 RMB respectively. The industry's average valuation in 2019 was 12 times. Based on 1) the company's general book revenue accounts for about 75%, the business is more growing, and the overall atmosphere of the company is more market-oriented; 2) the books signed exclusively by the company, Junichi Watanabe, have the potential of popular style, which is expected to drive performance growth. Give the company 14 times PE in 2019, with a target price of 8.12 yuan, covering it for the first time and giving it a "buy" rating.
Risk hint: income tax preferential policy may not be able to extend the risk, the effectiveness of new business development or less than expected risk, raw material paper price rise risk.