On August 10, New Classic released its half-yearly 2023 report that the company's operating income in the first half of 2023 was 440 million yuan, down 1.37% from the same period last year; its net profit was 88 million yuan, up 7.35% from the same period last year; and its non-net profit was 76 million yuan, up 1.43% from the same period last year. The company's 2023Q2 realized operating income of 235 million yuan, down 1.84% from the same period last year; net profit from home was 43 million yuan, up 9.19% from the same period last year; and non-net profit from home was 36 million yuan, down 0.53% from the same period last year.
Adhere to the thinking of long-term development, high-quality content drives the steady development of the main business. Affected by the book market, the company achieved operating income of 440 million yuan in the first half of 2023, down 1.37% from the same period last year. After deducting non-return, the net profit was 76 million yuan, an increase of 1.43% over the same period last year. The company adheres to the long-term development idea driven by high-quality content, in the face of the less than expected recovery in book market demand in the first half of the year, adjusts the rhythm of new products on the market, and launches 62 new books in the first half of 2023, including 45 popular books and 17 children's books.
Gross profit margin declined slightly, and increased business investment led to an increase in marketing costs. In the first half of 2023, the company's gross profit margin fell slightly to 49.61%, including print book / digital content / copyright operation gross profit margin year-on-year-0.96/+6.72/+1.10pct. In the first half of 2023, the company's sales expenses increased by 12.1% to 79 million yuan compared with the same period last year, and the sales expense rate was + 2.17pct compared with the same period last year, mainly because the company continued to build an omni-channel marketing and sales system to promote accurate access to content. The company's R & D expenses decreased by 31.16% compared with the same period last year, mainly due to the company's adjustment of its own IP projects and the reduction of R & D personnel investment.
Build an international publishing platform, and further expand the reserve of copyright resources and the types of licenses. The company takes Neo-Classic America as the main body, actively promotes overseas business and builds an international publishing platform. In the first half of 2023, the company's overseas business achieved revenue of 53 million yuan, an increase of 44.90% over the same period last year. Excluding depreciation and amortization expenses arising from the acquisition of copyright assets, the overseas business lost 11 million yuan, 19% less than the same period. At the same time, the company has established close cooperation with large international copyright agencies such as Boda and Carmen, as well as international well-known publishing organizations such as talking Society and Penguin Random.
Establish omni-channel sales system and explore diversified marketing methods. The company has omni-channel sales capabilities, including e-commerce platform, live e-commerce, Xinhua bookstore, characteristic bookstore, etc., starting from the product content, combined with the characteristics of the channel to formulate a refined marketing strategy to improve the accurate access of content and sales conversion rate. The content team will continue to explore diversified marketing methods based on content, combined with platform and channel characteristics, and promote the dissemination and sales transformation of high-quality content through differentiated marketing resources and product strategies.
Upgrade the relevant IP image, explore IP authorization and diversified development. The company's IP creation team continues to upgrade the IP image of "bibi Zoo" and "minimal History" and carry out long content creation, which aims to expand the depth and influence of content and actively explore the possibility of IP licensing and diversified development.
Maintain a highly recommended investment rating. Maintain the "highly recommended" investment rating. Taking into account the company's rich reserves of high-quality copyright resources, the active promotion of overseas business is expected to become a new profit growth point, we expect 2023 Universe 2024 Universe to achieve a net profit of 1.70 pounds in 2025, respectively. It corresponds to a valuation of 12.7 times 17.8 pounds, and maintains the "highly recommended" investment rating.
Risk hints: the risk of intellectual property infringement, the risk of external policy changes, and the risk that overseas business falls short of expectations.