23H1's revenue and net profit are solid. The company released a semi-annual report that 23H1 achieved revenue of 873 million yuan, an increase of 2.92% over the same period last year, a net profit of 91 million yuan, an increase of 1.35% over the same period last year, and a net profit of 89 million yuan, an increase of 1.03% over the same period last year. Of this total, Q2 realized revenue of 450 million yuan, an increase of 2.2 percent over the same period last year, an increase of 4.49 percent over the previous month, and a net profit of 49 million yuan, an increase of 0.32 percent over the same period last year and 16.13 percent higher than the same period last year.
23H1's overall gross profit margin was 35.36%, a year-on-year reduction of 1.49pct.
Outperform the general trend of the industry, mass publishing has a solid leading position. According to the company's semi-annual report, citing the open-book report, the book retail market fell 2.41% in the first half of 2023 compared with the same period in 2022, and the decline continued to narrow compared with the first quarter. 23H1's market share in the overall book market is 3.47%, an increase of 0.48 pct over the same period last year, firmly ranking first among publishers. The market share of books on management, children, psychological self-help and biography all ranked first. The operating indicators of book publishing improved comprehensively over the same period last year, with the number of movable sales up 7.3 per cent year-on-year, the number of inventory turnover increased by 0.41, and the number of TOP500 bestsellers in the 10 major segments covered by the company totaling 311, up 4.4 per cent from the same period last year.
Innovative distribution business model and strategy, live e-commerce can be expected in the future. In the period of downward flow of traditional book sales channels and immature emerging channels, the company promotes the overall transformation and upgrading of the marketing and sales system driven by data and technology and with traffic operation as the starting point; adopt the strategy of further subdividing channels and expanding vertical channels, constantly expand the three-dimensional channel sales system, and strive to expand the sales channels of animation, children and government and enterprise customers. Continue to increase the investment and iteration of content e-commerce, the company's official live broadcast field average GMV increased by 329% compared with the same period last year, continuing to lead the book industry.
Focus on industrial upgrading to build a "knowledge service wisdom platform", and build a "parallel bookstore" based on the professional ability of the supply chain.
The company focuses on the needs of industrial transformation and upgrading, innovates, selects and integrates high-quality content and educational resources, and revolves around the needs of public users, entrepreneurs, corporate executives, the government and other different customer groups. Build online and offline knowledge service integration solutions such as digital reading, government-enterprise learning, forums and other online and offline knowledge services. The average number of monthly active users of Citic College increased by 42.65% over the same period last year. The passenger flow of Citic Bookstore rebounded significantly compared with the same period last year. In the first half of the year, with the deep integration of content planning, activity planning and spatial planning, we will explore a new mode of cultural space operation, continuously temper the professional ability of cultural consumption supply chain, promote the construction of "parallel bookstores" and expand the new media e-commerce matrix.
Profit forecast and valuation analysis. We expect the company to achieve an income of 2.197 billion yuan, 2.505 billion yuan and 2.858 billion yuan in 2023-2025, and a net profit of 255 million yuan, 305 million yuan and 350 million yuan. With reference to comparable companies, we give the company 2.5-3 times dynamic PS in 2023, corresponding to a reasonable value range of 28.89-34.67 yuan per share, which is better than the market rating.
Risk hint. Book sales fell short of expectations, and new channels such as short videos affected the company's profitability.