Performance summary:
On August 25, the company released its mid-2023 results, with revenue up 8.23% year-on-year to 6.77 billion yuan and net profit up 16.53% to 970 million yuan.
Core points:
First, focus 1: the steady growth of the company's main business. In the first half of 2023, the company's revenue increased by 8.23% to 6.77 billion yuan compared with the same period last year, and its net profit increased by 16.53% to 970 million yuan. Combined with the first-quarter results, Q2's single-quarter revenue was 4.1 billion yuan, an increase of 6.5% over the same period last year, and its mother's net profit was 623 million yuan, an increase of 10.7% over the same period last year. In terms of profit in the first half of the year, the company's gross profit margin fell 2.4 percentage points compared with the same period last year, or was partly affected by the adjustment of transportation costs to changes in operating costs under the new revenue criteria; the total rate of sales, management and R & D expenses totaled 26.6%, a decrease of 2.3 percentage points compared with the same period last year, which was basically offset by the decline in gross profit margin.
Second, point 2: excellent book publishing quality, 23H1 comprehensive book retail share of the leader. According to open-book monitoring data, the company's share of the national comprehensive book retail market in the first half of 2023 was 3.52%, up 0.4% from the same period last year, ranking second in the country. According to the market segment, composition, popular science, family education, psychological self-help, art synthesis, music and academic and cultural sectors are the strong direction of the company, ranking among the best in the country. During the same period, three kinds of books, including Jiashan, published by the company, were selected on the monthly list of "good Books in China". Eleven books have been on the monthly best-selling list of open-book retail for 32 times, of which LIZHI INC of Changan topped the monthly best-selling fiction list in March and April.
Third, point 3: continue to promote digital education and further improve the depth and breadth of services. The company continues to make efforts in the education service market, and further build an education service system covering the whole province. By the end of the reporting period, Tianyin digital education products have entered 25 provinces, 174 prefecture-level cities, 646 districts and counties, and more than 10,000 schools with various products and services. Central South Xunzhi strives to carry out education quality monitoring and examination services, taking test papers, teaching aids and other paper media as the flow entrance, focusing on building examination paper marking system, examination and evaluation system and other products. By the end of the reporting period, the number of registered users of Xunzhi mobile applications in South China exceeded 5.6 million, an increase of 350000 over the same period last year.
Profit Forecast: we forecast that the company's operating income in 2025 will be RMB 1,4715.8 billion, and its net profit will be RMB 1.68 billion, which will be covered for the first time and will be given a "recommended" rating.
Risk hints: the demand for teaching materials is declining; the demand for bookstores is weak; and the promotion of digital education is not as expected.