Main points of investment
Event: the new classic was released in the mid-2023 report. In the first half of 2023, the company achieved operating income of 440 million yuan, down 1.37% from the same period last year; net profit from home was 88.2913 million yuan, up 7.35% from the same period last year; and net profit from non-return was 76.1138 million yuan, up 1.43% from the same period last year. Of these, the company's revenue in the second quarter was 235 million yuan, down 1.84% from the same period last year; the net profit returned to the mother was 43.2647 million yuan, up 9.20% from the same period last year; and the net profit from non-return was 36.4823 million yuan, down 0.53% from the same period last year.
High-quality resources drive steady development, and structural adjustment can reduce costs and increase efficiency. The company continues to optimize the topic selection structure, promote the diversified dissemination and transformation of content, and enhance the ability of fine operation. In the first half of 2023, the company achieved a gross profit margin of 49.75%, a year-on-year reduction of 0.20pcts, a sales expense rate of 18.05%, an increase of 2.17pcts over the same period last year, a management expense rate of 8.07%, a decrease of 0.55pcts over the same period last year, and a R & D expense rate of 1.05%, a decrease of 0.45pcts over the same period last year. 1) domestic business: the company focused on operating digital content business in the first half of the year. Digital reading services on platforms such as Wechat Reader and Himalayas achieved revenue of 11.4728 million yuan, an increase of 1.2% over the same period last year.
In the main business of book planning and distribution, in response to the less than expected recovery in book market demand, the company adjusted the rhythm of new product listing, integrated editors, marketing and marketing personnel, and launched only 62 new books in the first half of the year.
Overall, the domestic business of H1 Company was under pressure in 2023, with revenue of 384 million yuan, a decrease of 6.22% over the same period last year. 2) overseas business: in the first half of the year, the company continued to optimize and adjust the direction of topic selection and personnel structure, actively carried out international cultural exchange activities, and promoted multicultural integration. Overseas business achieved operating income of 52.9037 million yuan, an increase of 44.90% over the same period last year. The gross profit is 47.93% and the net profit is-13.3317 million yuan, which is basically the same as that of H1 in 2022.
Continue to expand writers, copyright resources, overseas business is beginning to show results. 1) the overseas publishing market continues to expand:
The company's subsidiary Group Star Publishing House (Astra Publishing House) has made a deep layout overseas, continuously increasing investment in overseas topic selection planning, copyright acquisition, team building, channel integration, etc., and overseas business is growing at a high speed. 2) the high-quality copyright reserve is rich: the company has the resources of many leading writers at home and abroad, such as Garcia M á rquez, Yu Hua, Murakami Haruki, Wang Xiaobo, Higuchi Higano and so on. Headquarters and overseas copyright database have nearly 7000 kinds of paper books, e-books, audio books and related derivative rights. And has established a close cooperative relationship with Boda, Big Apple Inc, Carmen and other large international copyright agencies, as well as international well-known publishers such as talk Society and Penguin Random, and the copyright advantage is expected to continue to expand. 3) the marketing system covers all channels: the company's marketing channels cover e-commerce platform, live e-commerce, social e-commerce, proprietary e-commerce, Xinhua Bookstore, private dealers, characteristic bookstores, etc., and will continue to improve the accurate access rate of content in the future. promote the same-frequency resonance of marketing and sales, and improve the sales conversion rate.
Profit forecast: we slightly adjust the profit forecast and expect the company's 2023-2025 net return profit to be 1.72pm 2.05pm, corresponding to the previous share price (08 / 28, 2023), PE is 18.0pm 15.1 × 12.9 times, maintaining the "overweight" rating.
Risk hints: the risk of intellectual property infringement, the risk of external policy changes, inaccurate market trend research and judgment, and new product market feedback fall short of expectations.