The net profit of 23H1 was 971 million yuan, an increase of about 17%.
The company released semi-annual report, 23H1 revenue of 6.77 billion yuan (yoy+8.23%), return to the mother net profit of 971 million yuan (yoy+16.53%), deducted non-net profit of 931 million yuan (yoy+6.1%). Among them, Q2 realized revenue of 4.106 billion yuan (yoy+6.52%,qoq+54.14%) and net profit of 623 million yuan (yoy+10.7%,qoq+79.45%). We maintain a 23-25 year net profit of 16.34 billion yuan for the return of the company's parent, and 1.934 billion yuan for the comparable company's Wind for 23 years. The average PE is 12x. Considering the company's leading effect, we give the company 16X for 23 years, corresponding to the target price of 14.56 yuan (original value: 15.47 yuan) and maintain the "buy" rating.
Publishing and distribution business maintains steady growth
The revenue of 23H1 publishing business was 1.6 billion yuan, an increase of 9.9%, and maintained steady growth. According to Beijing Open Book, the company's real foreign market share in the national comprehensive book retail market is 3.52%, compared with the same period last year + 0.4pct, ranking second in the country; 23H1 distribution business revenue of 5.824 billion yuan, an increase of 13.1%. Xinhua Bookstore in Hunan Province continued to make efforts in the education service market, further building an education service system covering the whole province, achieving revenue of 4.918 billion yuan, an increase of 13.01%, and a net profit of 652 million yuan, an increase of 12.41%. To promote the campus reading project, the sales revenue of the series of "four-dimensional reading" products is 242 million yuan. Efforts will be made to do a good job in the distribution of current and political books, with a sales income of 366 million yuan. The platform of "Zhiqu New after-class" has accelerated the upgrading and upgrading, and the market of secondary vocational and higher education has been opened up vigorously. Strive to build a "red classroom" research brand.
As a result of subject adjustment, 1H gross profit margin was reduced by 2.4pct to 41.4%. During the period, the expense rate slightly reduced 23H1 gross profit margin by 41.4% and decreased by 2.4pct compared with the same period last year, mainly due to the adjustment of transportation costs related to compliance obligations to operating costs in accordance with the new income criteria. The sales / management / R & D / financial expense rate is 14.3%, 11.7%, 0.7%, 0.5%, respectively, compared with the same period last year. The decline in the sales expense rate is due to the adjustment of transportation expenses related to performance to operating costs, and the decline in R & D expense rate is due to the gradual completion of R & D projects. The expense rate during 1H23 is 26.1%, which is slightly lower than that of-1.86pct.
Actively improve the business matrix and steadily advance the digital industrial cluster
The company actively integrates its digital education resources, and Tianyin digital education products serve more than 10, 000 schools; Shell Network is actively transformed and upgraded, focusing on building a Hunan education wisdom cloud platform; Central South Xunzhi focuses on education quality monitoring and examination services, and the number of registered users of 23H1 mobile applications exceeds 5.6 million. The digital industrial cluster planned by the company has progressed steadily, and most of the towers in the north and south of the Malanshan Park project have been capped during the reporting period. After the completion of the project, it is proposed to gather new business type, the company's new industries such as short video, financial media, digital publishing and digital education, to help the company's digital transformation.
Risk hint: the publishing and distribution business is not as expected, and the development of digital business is not as expected.