Event: on the evening of April 24, 2019, the company announced its 2018 annual report: 1) revenue in 2018 was 10.36 billion yuan, down 8% from the same period last year; net profit from home was 730 million yuan, up 19% from the same period last year; net profit from non-return was 600 million yuan, up 21.6% from the same period last year; earnings per share were 0.60 yuan, up 18% from the same period last year. 2) profit distribution plan: the company intends to pay cash dividends to the company's shareholders, with a cash dividend of 1.50 yuan (including tax) for every 10 shares, totaling 180 million yuan, with a dividend payout rate of 24.9%.
Comments:
1, the main publishing and distribution performance is good, itemized income and overall deduction of non-profit growth rate of more than 20%, the growth rate is substantially ahead of the industry level. In terms of revenue, the overall revenue decreased by 8% compared with the same period last year, but it was mainly due to the restructuring of the company's business. The revenue of the main publishing and distribution business increased by 25% over the previous year, and the revenue of four publishing units exceeded 100 million yuan.
2. The teaching materials and auxiliary business benefits from the increase in the number of primary and secondary schools, price increases and the increase in market share in the province, which is expected to continue to drive the rapid growth of the main industry. The revenue of the core main teaching materials and auxiliary publishing and distribution business increased by 12.4% in 2018 compared with the same period last year. The company still has room to improve the market share of teaching assistance in Hubei province, superimposed teaching assistance follow-up is expected to increase prices and other factors, teaching materials and teaching assistance business is expected to continue to grow rapidly.
3. the ability to create best-selling books is outstanding, and at the same time, the transformation of bookstores is accelerated, and the performance is expected to continue to exceed expectations. The company's general books grew rapidly in 2018, with revenue growth of 26.7% in 2018, significantly exceeding the growth rate of 7.0% in 2017, and the share of revenue increased from 13.9% to 17.9%. According to open-book data, books owned by the Yangtze River New Century have been on the best-seller list more than 1600 times in the past decade, showing a prominent and undervalued bestseller-building ability.
4. The indicators of financial statements are healthy, the dividend payment rate is increasing, and it is more attractive to long-term value investors. The company's performance has continued to grow in the past three years and its cash flow is good. By the end of 2018, 1.174 billion (YOY+47.08%) of cash on hand, mainly due to financial recovery and cash inflows from operating activities, and less interest-bearing liabilities. The dividend payment rate has been more than 10% in the past three years, and from the statement, the company's defense value is still outstanding.
5. Profit forecast and investment suggestions. It is estimated that the return net profit of the company from 2019 to 21 is 811 million, 878 million and 966 million yuan respectively, corresponding to 10.6x, 9.8x and 8.9x P / E, respectively.
Risk hint: the growth rate of the book publishing industry is declining; new business expansion is not up to expectations.