Core view: Publishing endowments are of high quality, building a “professional+education+public” publishing layout. The actual controller of the company is Guoke Holdings, which is 100% owned by the Chinese Academy of Sciences, and uses the resources of the Chinese Academy of Sciences as the cornerstone to build a comprehensive technology publishing layout: 1) Academic monography/journals, which rank first in the national library accessories market (Rentian Bookstore statistics); 2) Textbook supplements. Longmen Book Bureau's multiple teaching aids are the leading products of simultaneous teaching aids for primary and secondary schools (Dangdang Bestselling Data); 3) Popular Science Books The magazine has the highest share in the popular science book retail market in the country (open volume statistics data). Leading journals build barriers, forming a moat for scientific research talents. The company owns nearly 1/3 of the country's SCI Q1 regional journals. The influence factors of leading journals continue to increase (company annual report data). The company continues to publish its research results along the creative path of researchers, forming a moat of author resources. According to “The Publisher” statistics, Science Press's overall H index ranked first in the country, and ranked first in the H index for 28 second-level subjects including mathematics, botany, and chemistry. Relying on the advantages of the racetrack to accelerate internationalization and digitalization, the company has set up subsidiaries in Japan and the US, plans to acquire French publishing agency EDP Sciences, establishes trade cooperation with hundreds of publishing companies, societies, associations, and booksellers around the world, and has more than 800 long-term customers located in domestic universities and research institutions. The company plans to lay out knowledge service business in the direction of specialized subject knowledge bases, digital education cloud services, and healthcare big data. Investment suggestions: We expect that in 2019-2021, the company's revenue will be 24.90/27.72/3,076 billion yuan, net profit of 484/5.41/600 million yuan, the corresponding EPS will be 0.61/0.68/0.76 yuan/share, and the PE corresponding to the closing price on July 1, 2019 will be 21.56X/19.28X/17.38X. Taking into account the absolute valuation and relative valuation, we believe that the reasonable value of the company is 14.92 yuan/share, covering the “buy” rating for the first time. Risk warning: risk of cooperation with overseas institutions; risk of fluctuations in paper prices; impact of mobile reading; intensification of competition in the primary and secondary school teaching aid market; progress in knowledge service business development falls short of expectations.