Event: in the first half of 2023, the company achieved operating income of 440 million yuan, down 1.37% from the same period last year, and its net profit was 88 million yuan, an increase of 7.35% over the same period last year.
The domestic book business is still in the recovery stage. Domestically, in the first half of 23, the revenue of the company's book planning and distribution business decreased by 5.61% to 370 million yuan compared with the same period last year, the gross profit margin decreased to 49.61%, and the revenue from digital content business increased by 1.2% to 11 million yuan. The decline in revenue from book planning and distribution business was mainly due to the limited recovery of the industry boom, which affected the company's book sales. According to the operating data announced by the company, the company's paper book sales fell 1.58 per cent to 861 million yuan in the first half of 23 years compared with the same period last year.
Reorganize the business structure and consolidate the market leading position. The company reorganized all category book business teams, and the pace of new book launch slowed down from the previous year, with 62 new books launched in the first half of 2023 (compared with 102 in the same period last year), including 45 popular books and 17 children's books. The company focuses on the development of high-quality content books, and Yuigo Higano's new books "White Bird and bat", social science books "Salt Town" and "starting at the limit" have repeatedly entered JD.com 's new book bestseller list, with the company's meticulous operation in various channels, it is expected to develop into classic best-selling books and consolidate the company's competitive advantage in the literary and social sciences category.
Achieve high-quality growth in overseas business. In the first half of 2023, the company continued to promote the resource integration of overseas acquisition subsidiaries, the copyright reserve further increased, and the income of overseas business reached 53 million yuan, an increase of 44.90% over the same period last year. While the company further optimized the direction of content selection and the personnel structure of overseas business team, the strategy of reducing cost and increasing efficiency began to realize the results. After excluding depreciation and amortization, the overseas business lost 11 million yuan in the first half of the year. It was 19% lower than the same period last year.
Profit forecast and investment suggestions: the company has a rich reserve of high-quality copyright, and its advantages in literature, children's and humanities and social sciences categories are expected to be consolidated after reorganizing its business structure. Overseas business development will further increase the company's revenue. The company's annual return net profit in 2023-24-25 is expected to be 1.79pm 212pm 243 million, an increase of 31%, 18% and 15% over the same period last year. Maintain a "buy" rating.
Risk Tip: book business sales growth is not as expected, overseas business development is not as expected.