Summary of the report:
Backed by Qingdao Publishing Group, the main book industry is growing steadily.
The company was successfully listed in Qingdao Alkali Co., Ltd. in 2015, with 18 holding subsidiaries, including Qingdao Publishing House Co., Ltd., Qingdao Xinhua Bookstore Co., Ltd., covering publishing, distribution, logistics and other formats. Set editing, printing, distribution, supply, trade in one, with a complete industrial chain of publishing enterprises. Three years after the listing, the company exceeded its performance commitment for three years, and the main business grew steadily.
The proportion of general books is high, and the growth momentum of teaching materials and teaching aids is good.
General books have great flexibility and high proportion. The company produced 7071 kinds of books in 2015, and the reprint rate of brand books exceeded 90%. In the whole year, 106 books won 132 provincial and ministerial book awards and won the national publishing fund for 10 consecutive years. From 2017 to 2017, the company's general book revenue was 1.14 billion yuan, 1.34 billion yuan and 1.49 billion yuan respectively, and the three-year gross profit margin was 28.2%, 28.6% and 27.9%, respectively. The company successfully signed the full copyright of Junichi Watanabe, and gradually formed a Japanese book and copyright cluster centered on Watanabe Books and Watanabe Literature Museum, which enhanced the company's influence in the field of Japanese literature publishing. Steady growth of teaching materials and teaching aids. Teaching materials for students and teachers, the company follows the "millions of districts and counties, tens of millions of prefectures and cities" strategy, teaching materials sales momentum is good. From 2015 to 2017, the company's revenue from teaching materials and teaching assistance was 480 million yuan, 530 million yuan and 560 million yuan respectively, accounting for 24%, 23% and 22% of the revenue respectively, and the three-year gross profit margin was 42%, 44% and 47% respectively.
Investment suggestion
We estimate that the company's net profit from 2018 to 2020 will be 365,000,000 yuan, corresponding to EPS 0.52 yuan, respectively; according to the closing price yuan on February 27, 2018, the corresponding PE for 2018-2020 will be 2018 times that of 15-14-13, and the valuation center for comparable companies in the same industry will be about 14 times in 2018. The company relies on Qingdao Publishing Group, and the main business of book publishing and distribution is growing steadily. At the same time, new business type and new media are developing rapidly and covering for the first time. We give the company a "cautious recommendation" rating.
Risk hint
The market competition aggravates the risk; the book raw material price fluctuation risk; the tax preferential policy change risk.