Core ideas:
The company disclosed its annual report in 2019 and its quarterly report in 2020. (1) the performance grew steadily in 2019, with revenue of 2.508 billion yuan, an increase of 12.73% over the same period last year; net profit of 465 million yuan, an increase of 9.56% over the same period last year; and net profit of 430 million yuan, an increase of 6.50% over the same period last year.
(2) Q1 suffered a loss in 2020, achieving revenue of 245 million yuan, down 33.10% from the same period last year; realizing net profit of-20 million yuan and deducting non-return net profit of-23 million yuan, partly because the epidemic delayed the start of school; second, because the company's revenue is confirmed to be seasonal, generally contributing only about 15% of the company's annual revenue in the first quarter, accounting for less than 5% of the profit.
Professional publishing leader, steady improvement of performance and academic influence. The company has a significant competitive advantage in the field of professional publishing. According to the 2018 journal citation report published in June 2019, a total of 61 publications have been selected by the company in SCI, and 16 journals are ranked in the Q1 area of international journals in the same field. The impact factor of National Science Review is as high as 13.222, ranking third in the global multidisciplinary comprehensive journals. At the Spring Picture Collection meeting of the National Pavilion Distributor Union in 2020, the total purchase code as of April 3 was 291 million yuan, and the company's science publishing house topped the sales list with 33.99 million yards.
Actively promote digitization and internationalization. In 2019, the company invested 50 million yuan to set up a subsidiary Zhongke Media Science and Technology to carry out technology research and development business, has built a professional technical research and development team of more than 40 people, and acquired a 100% stake in French EDP Sciences at a consideration of about 14.83 million euros.
Investment advice. We estimate that the return net profit of the company from 2020 to 2022 will be 4.980.71 / 626 million yuan, the corresponding EPS will be 0.63 and 0.72, and the PE corresponding to the closing price on April 30, 2020 will be 14.64 X 12.76 X and 11.64 X. The company is a professional publishing leader, mainly for school students, researchers and libraries. In the long run, the demand for professional books is rigid. Using the relative valuation method, we give a 20-fold valuation of PE in 2020, corresponding to a reasonable value of 12.59 yuan per share, maintaining a "buy" rating.
Risk hint. The impact of COVID-19 's epidemic situation; the promotion of digital projects is not as expected; the risk of cooperation among overseas institutions; and the intensification of competition in the teaching and auxiliary market of primary and secondary schools.