Events:
On the evening of April 21, 2020, the company released its 2019 annual report: business income reached 1.57 billion yuan in 2019, an increase of 0.04% over the same period last year; net profit from home was 288 million yuan, up 0.98% from the same period last year; and net profit from non-return was 120 million yuan, down 39.9% from the same period last year, mainly due to the increase in cost input and the company's promotion of new business, which has not yet formed economies of scale. At the same time, the company disclosed plans to acquire a 10.2% stake in Xinhua Zhiyun and the "Xinhua net Reform and Development three-year Action Plan (2020-2022)" to promote the development of media integration.
In 2019, the company's revenue and net profit were basically the same as last year, and the 2019Q4 performance was good.
In 2019, the company's operating income increased by 0.04% compared with the same period last year, and its net profit increased by 0.98% year-on-year, and the performance was basically the same as the same period last year. The non-return net profit was 120 million yuan, down 39.9% from the same period last year, mainly due to the increase in cost input and the fact that the new business has not yet formed economies of scale. In the fourth quarter of 2019, the company achieved operating income of 646 million yuan, an increase of 6.46% over the same period last year, and a net profit of 131 million yuan, an increase of 18.45% over the same period last year. In terms of revenue distribution, revenue accounted for a large proportion in the fourth quarter, and the good performance of 2019Q4 significantly boosted the full-year performance.
Gross margins of many traditional information services have declined, and digital content business has increased by 24% compared with the same period last year.
In 2019, the company's online advertising business achieved revenue of 659 million yuan, a slight increase of 1.31% over the same period last year, and a gross profit of 354 million yuan, down 6.56% from the same period last year. Gross profit of information services and mobile Internet decreased by 18.1% and 41.6% respectively compared with the same period last year. The digital content business continued to grow, with revenue of 164 million yuan in 2019, an increase of 23.8% over the same period last year, and a gross profit of 49 million yuan, an increase of 13.2% over the same period last year. The company's business is in urgent need of further innovation and integration.
Acquire 10.2% stake in Xinhua Zhiyun and formulate a three-year action plan to further promote the development of media integration
After the completion of the acquisition of Xinhua Zhiyun, the company will hold a 51% stake and continue to embrace cloud computing and big data to promote the technological innovation and development of financial media. The company formulated the "three-year Action Plan for the Reform and Development of Xinhuanet" and proposed to gradually complete the intelligent transformation with the new ecology of content as the core and advanced technologies such as 5G, big data, cloud computing, artificial intelligence and other advanced technology. expand and upgrade from traditional Internet information service providers to new Internet enabling platforms. We believe that the further acquisition of Xinhua Zhiyun shares will help to expand synergy, continue to promote the development of media integration, and help the company build a mobile, younger, younger and intelligent media.
Be optimistic about the company's new media business, integrate the media development potential of the central media platform, and maintain the "recommended" rating.
As the leader of the central media, the company actively embraces new Internet technologies, promotes the development of media integration, continues to lead the development of media integration combined with the advantages of the platform, and promotes the three-year reform plan. It is estimated that the company's net profit from 2020 to 2022 will be 306 million yuan, 345 million yuan and 393 million yuan respectively, an increase of 6.1%, 12.9% and 13.7% over the same period last year. The current share price corresponds to 42 times, 38 times and 33 times of PE respectively, maintaining the "recommended" rating.
Risk tips: increased competition in new media, technology application and financial media business progress is not as expected and other risks.
