In the first half of 2023, the company achieved operating income of 873 million yuan, +2.92% year-on-year; net profit of 0.91 million yuan, +1.35% year-on-year, and basic earnings per share of 0.48 yuan. Net profit to parent was 49 million yuan in the second quarter, up 16.13% from the first quarter.
Performance has continued to grow, and there has been a steady increase in all segments. In the first half of 2023, the company achieved operating income of 873 million yuan, an increase of 2.92% over the previous year; net profit attributable to shareholders of listed companies was 91 million yuan, an increase of 1.35% over the previous year. The increase in revenue is related to the strength of the segment: in January-June of this year, the company's managed book market share was 14.19%, up 0.43 percentage points from the previous year, and continued to lead the market; the children's real-world market share was 4.32%, up 1.02 percentage points from the same period last year, rising to first place; psychological self-help and biographical real-world market share ranked first; the literary and art categories ranked first; the ranking of literature and art categories increased dramatically: with “China QiTan”, “Three Thousand Miles of Changan”, and “The Deep Sea”, etc., and actively planned multiple bestsellers. Product business . In addition, the company's expenses were managed properly, and the sales/management/finance expense ratios were -2.89/-0.60/+0.21 pct, respectively. The company achieved revenue of 446 million yuan in the second quarter, up 4.49% from the first quarter; net profit attributable to shareholders of listed companies was 49 million yuan in the second quarter, up 16.13% from the first quarter.
Outperform the general trend of the industry and lead the industry in operational efficiency. According to statistics from the opening report, the book retail market fell 2.41% in the first half of 2023 compared to the same period in 2022, and the decline continued to narrow compared to the first quarter. According to data from the opening report, in January-June of this year, the company's share in the overall book market was 3.47%, up 0.48 percentage points from the same period last year, ranking first among publishing institutions; the efficiency of Shiyang varieties was 5.03, up 0.44 from the same period last year, ranking first in the industry. The operating indicators of book publishing have improved across the board compared to the same period last year. The number of sales categories increased by 7.3% year-on-year, the number of inventory turnover increased by 0.41, and the total number of times the TOP 500 bestsellers in the 10 major segments covered by the company were on the list 311 times, an increase of 4.4% over the previous year. In addition, the company continues to increase investment and iteration in content e-commerce, and the average GMV of the company's official live broadcast room increased by 329% year-on-year, continuing to lead the book industry.
Actively embrace the changes brought about by AI technology. 1) The company is promoting the reengineering of the “AIGC Digital Publishing” process. A product production and promotion system co-built by artificial intelligence has been basically set up, the AIGC digital publishing integrated tool platform has been opened for trial use by internal editorial teams, and the first batch of AI-assisted publishing books has been prepared for launch. 2) The company has established a unified “intelligent digital system” based on the AIGC application layer, facing the future “hyperchannel”, cross-integrating strategies, organizations, technology and users, building a super content platform and knowledge service system integrating digital platforms, reader interaction and social embedding, and gradually forming the company's second growth curve.
Maintain a “Highly Recommended” investment rating. We predict that the book retail market is expected to recover further in the future. As one of the leading companies in the industry, the company has remarkable advantages in operating efficiency and in some segments (management, children, etc.). It is estimated that net profit of 231/2.68/287 million yuan will be achieved in 2023/2024/2025, respectively, corresponding to 24.8/21.3/19.9 times PE, maintaining the “highly recommended” investment rating.
Risk warning: Preferential tax policies and risks, risk of intellectual property infringement, risk of fluctuations in raw material prices.