Overview of events
According to the annual report released by the company in 2019, the company achieved revenue of 8.842 billion yuan in 2019, an increase of 8.01% over the same period last year, a net profit of 1.139 billion yuan, an increase of 22.19% over the same period last year, and a deduction of 1.052 billion yuan in non-net profit, an increase of 21.23% over the same period last year. The company's gross profit margin was 38.25%, an increase of 0.73 pct over 2018, and a net profit margin of 12.72%, an increase of 1.4pct over 2018. The increase in the company's operating results is mainly due to the increase in gross profit brought about by the increase in sales of the company's business such as book publishing, reading services and educational services, as well as the year-on-year increase in investment income and fair value change income recognized in the capital business this year. In 2019, the company will pay a cash dividend of 3 yuan (including tax) to all shareholders for every 10 shares.
The main business of publishing and distribution has grown steadily, and its profitability has increased steadily.
In 2019, the company's book publishing and distribution business income was 10.075 billion yuan. The company adheres to the concept of "Sanjing publishing" and pursues the high-quality development of publishing and distribution business. According to the open-book data, in 2019, the market share of the group ranked seventh in the country, up 6 places from the same period last year, ranking first in terms of growth; the publishing efficiency ranked first in the country with 2.16. The company builds multi-format scenarios and improves its multi-channel and multi-brand sales model. In 2019, Wenxuan's flagship store won the first place in the most popular JD.com book store TOP10 in 2019.
Improve the layout of physical bookstores and create urban cultural space.
The company has established cultural MALL, large and medium-sized bookstores, professional bookstores, community bookstores, Shangchao bookstores, intelligent bookstores and many other forms of business. In 2019, a total of 13 stores were opened and upgraded, covering an area of more than 12000 square meters. In Sichuan Province, there are more than 170 directly operated stores with a total area of more than 140000 square meters and more than 200 intelligent bookstores.
The new "Kids WinShare Wenxuan Children's Bookstore" Global Center Store, which opened in 2019, provides a modern reading service of "age-graded reading service + children's parent-child social experience", which enhances the brand influence of professional bookstores.
Promote the layout of supply chain services, Internet business performance is eye-catching.
The company has formed a "double network" collaborative logistics service capability of warehousing network and transportation network. In 2019, the total code of the company's own logistics circulation books reached 24.1 billion yuan, an increase of 10.55% over the same period last year. At the same time, we will further strengthen the operation and management of third-party logistics and provide integrated logistics services for key customers to expand warehousing and distribution. In 2019, the revenue of third-party logistics reached 241 million yuan, an increase of 36.16% over the same period last year. Thanks to the company's establishment of a procurement and supply system adapted to different channels to enhance the bargaining power of product supply and the active expansion of emerging online channels such as Pinduoduo, the company's Internet sales business achieved revenue of 1.468 billion yuan in 2019, an increase of 15.91% over the same period last year.
Investment suggestion
We estimate that the company's revenue from 2020 to 2022 will be 9.065 billion yuan, 10.114 billion yuan and 11.365 billion yuan respectively, an increase of 2.52%, 11.57% and 12.37% respectively, and the net profit of returning mother will be 1.147 billion yuan, 1.565 billion yuan and 1.973 billion yuan respectively, an increase of 0.7%, 36.4% and 26.1%. The corresponding EPS is 0.93,1.27 and 1.60 yuan respectively. The corresponding PE is 11.77X\ 8.63X\ 6.84X respectively. Consider the company as the assistant leader of teaching materials in Sichuan Province, covering it for the first time and giving it a rating of "increasing its holdings".
Risk hint
The industry discount rate further increases the risk, the sales of new works fall short of the expected risk, and the growth rate of the book industry continues to slow down.