The company disclosed its third quarterly report for 2023: (1) 23Q1-Q3 achieved revenue of 657 million yuan, down 6.63% from the same period last year; net profit from home was 130 million yuan, up 2.32% from the same period last year; and net profit from non-return was 115 million yuan, down 1.40% from the same period last year. (2) 23Q3 achieved revenue of 217 million yuan, down 15.77% from the same period last year; net profit from home was 41 million yuan, down 7.00% from the same period last year; and net profit from non-return was 39 million yuan, down 6.51% from the same period last year.

Paper book sales are under pressure, and digital content and copyright operations are growing rapidly. (1) the revenue of the 23Q1-Q3 paper book business was 602 million yuan, a decrease of 6.82% compared with the same period last year, and the gross profit margin was 48.16%. Compared with the same period last year, the revenue of the 23Q3 paper book business decreased by 0.06 pct, decreased by 13.25%, and the gross profit margin was 47.24%, which was higher than that of the same period last year. 1.51pct. (2) the revenue of the 23Q1-Q3 digital content business reached 33 million yuan, an increase of 30.02% over the same period last year, with a gross profit margin of 67.06%, an increase of 2.91 pctten 23Q3 digital content business revenue of 11 million yuan and a gross profit margin of 60.81% over the same period last year. (3) the revenue of 23Q1-Q3 copyright operation business was 14 million yuan, an increase of 37.54% over the same period last year, and the gross profit margin was 55.36%, which decreased by 0.91 pct, 23Q3, with revenue of 7 million yuan and gross profit margin of 54.03% over the same period last year.

Profit forecasts and investment advice. We estimate that the revenue of the company from 2023 to 2025 will be 873 million yuan, 924 million yuan, and the net profit of returning to the mother will be 154 million yuan, 185 million yuan, 286 million yuan. The overall weak sales of domestic paper books led to a decline in revenue in the first three quarters of this year, but Neo-Classics accelerated the development of digital content and copyright operations, and overseas businesses gradually reduced their losses. in the long run, the company has a leading long-selling book operation capacity and copyright resource value. With reference to the valuation level of similar listed companies, we give the company a valuation of 22 times PE in 2024, corresponding to a reasonable value of 25.09 yuan per share, maintaining a "buy" rating.

Risk hint. Weak book consumption; decline in book sales at the company's head; AI technology application is not as expected; online discounts have intensified; overseas business losses; industry regulatory policy changes.