The net profit of 23H1 was 88 million yuan, an increase of 7.35%.

The company released semi-annual report that 23H1 realized revenue of 440 million yuan (yoy-1.37%), net profit of 88 million yuan (yoy+7.35%) and non-net profit of 76 million yuan (yoy+1.43%). Among them, Q2 realized revenue of 235 million yuan (yoy-1.84%,qoq+14.6%) and net profit of 43 million yuan (yoy+9.2%,qoq-4%). We expect the company's 23-25 net profit to return to the mother of RMB 2.82 billion, and the average PE of the comparable company's Wind for 23 years is 16.6X. Considering that the pace of the company's 23H2 new product launch is expected to recover and the overseas business is showing a better situation, we give the company 21X PE for 23 years, corresponding to the target price of RMB 23.52 (the previous value is 26 yuan), and maintain the "buy" rating.

The decline in book planning and distribution revenue is mainly due to the impact of short-term new product launch rhythm. H2 is expected to return to normal 23H1 book planning and distribution business revenue of 370 million yuan, down 5.61%. According to the open-book data, the size of 23H1 China's book retail market also fell by 2.41%. The performance of the company is slightly weaker than that of the industry, mainly because the company has carried out internal product line carding and re-planning in the face of slow recovery of book market demand, and the pace of new product listing has slowed down during the reporting period, and we expect it to return to normal in the second half of the year. 23H1's comprehensive gross profit margin is 49.75%, with a decrease of 0.2pct; the sales expense rate is 18.1%, with an increase in 2.2pct, mainly due to the fact that after 22H2's acquisition of overseas publishing house DAW, the new labor costs are included in the sales expenses and the related fees paid to the overseas book agent distribution team are increased; the management expense rate is 8.1%, which is reduced by 0.5pct, mainly due to the fine management of the company.

High growth in overseas business revenue; actively explore channels fine operation 23H1 company continues to promote the integration and efficiency development of overseas business, overseas business revenue of 53 million yuan, an increase of 44.9%. In terms of overseas business, based on the market performance and copyright storage of each product line, the company has further optimized and adjusted the direction of topic selection and personnel structure, while achieving revenue growth, reducing costs and improving efficiency has shown initial results. Excluding depreciation and amortization expenses arising from the acquisition of copyright assets, 23H1's overseas business lost 11 million yuan, 19% less than in the same period in 22 years. In terms of channel operation, the company promotes the dissemination and sales transformation of high-quality content through differentiated marketing resources and product strategies based on content, combined with platform and channel characteristics. The new version of Yu Hua's work "the Seventh Day" is promoted based on Douyin and has become a hot topic at the phenomenal level. The feminist work "begins at the limit" has sparked a heated discussion on social platforms and reached the top of Weibo Corp's hot search list. The company is rich in high-quality copyright reserves, actively expand overseas business, maintain "buy" rating companies with rich high-quality copyright reserves, and have strong competitiveness in literature, children's and non-fiction books. in addition, the company is actively expanding overseas business. it is expected to become a new profit growth point in the long term. Considering that the pace of 23H2 new product launch is expected to recover and overseas business is expected to show a better situation, we adjust the 23-25 net profit forecast for homecoming to RMB 1.82 million (the previous value is RMB 1.69 pm), corresponding to EPS1.12/1.28/1.5 yuan (the previous value is RMB 1.06 PE), and give the company a 23-year 21X PE, corresponding to the target price of RMB 23.52, maintaining the "buy" rating.

Risk hint: book sales fall short of expectations and overseas business falls short of expectations.