20Q1-3 revenue of 422 million decreased 51.82% year on year; net profit of 84 million yuan to the mother increased 589.39% year on year, and net profit returned to the mother of 504 million after deduction increased 33.6% year on year.
On October 30, Guoxin Culture announced its report for the third quarter of 2020. The sharp increase in Guimu's net profit was mainly due to (i) the increase in revenue of the current culture and education sector compared to the same period last year; (ii) the company carried out special work to reduce costs and increase efficiency, which achieved good results; (iii) the disposal income of the two chemical subsidiaries; and (iv) the impact of share-inclusive payments in the previous period on income tax expenses. Non-recurring profit and loss for the period was about $30 million, including profit and loss from disposal of non-current assets of $25 million. The decrease in revenue was mainly due to a reduction in the scope of mergers and acquisitions of chemical assets and a decrease in chemical operating income (in March 2020, the transfer of 100% of the shares of Changshu New Materials and 100% of the shares of New Materials Sales completed the registration of industrial and commercial changes).
The wholly-owned subsidiary Alveia's 20Q1-3 revenue of 219 million increased 5.2% year-on-year, and net profit of 83.6863 million was 83.6863 million, an increase of 144.3% over the previous year, mainly due to the influence of some income tax amounts.
On a quarterly basis, 20Q1's revenue of 85 million yuan decreased 69.39% year on year; Guimu's net profit was 18 million yuan, up 1645.15% year on year; 20Q2 revenue of 117 million yuan decreased 57.97% year on year; Guimu's net profit was 15 million yuan, up 194.01% year on year; 20Q3's revenue of 219 million yuan decreased 31.11% year on year; Guimu's net profit was 52 million yuan, up 78.19% year on year.
Invest in Beijing Huasheng Economic and Social to lay out the field of vocational education
At the same time, the company announced that it intends to use 290 million yuan in cash to acquire 27% of Beijing Huasheng Jingshi Information Technology Co., Ltd., the total shareholders' equity value of Huasheng Jingshi is 1,118 million yuan, and Guoxin Culture plans to transfer 27% of the shares of the original shareholders according to a valuation of 1.08 billion yuan. Huasheng Jingshi promised a net profit of no less than 70 million, 160 million and 270 million yuan after audit taxes in 2020-22.
Maintain profit forecasts and give buying ratings.
The company will continue to closely focus on the goals and tasks of the Education Informatization 2.0 Action Plan and the development trend of education informatization, and fully implement the “336 Strategy”. This strategic investment in the strategic development needs of Huasheng Jingshi Company is conducive to further expanding the main business of culture and education and achieving the collaborative development of existing education informatization business and vocational education. We expect the company's EPS to be 0.56 yuan, 0.68 yuan, and 0.81 yuan respectively in 20-22, and the PE will be 26x, 21x, and 18x respectively.
Risk warning: orders fell short of expectations, loss of core executives, fierce market competition, and Huasheng Jingshi's performance fell short of expectations