Performance summary: century Tianhong released three quarterly reports in 2023. According to the report, in the first three quarters of 2023, the company achieved operating income of 370 million yuan, an increase of 23.4 percent over the same period last year, a net profit of 31.39 million yuan, an increase of 14.4 percent, and a non-return net profit of 29.6 million yuan, an increase of 23.4 percent over the same period last year. In the third quarter alone, the income was 220 million yuan, an increase of 22.8% over the same period last year, and the net profit of returning home was 23.86 million yuan, an increase of 19.7% over the same period last year.
Active layout of AI education, AI product research and development steadily. Combined with artificial intelligence technology, the company considers the ultimate form and development path of "AI+ education", arranges a variety of AI education products, and has achieved initial results on the user side. 1) Q3, the company Xiaohong 3.0 new upgrade release, the new industry-leading AI composition correction function, as well as teaching plan generation function upgrade, has covered 9 disciplines in senior high school, to achieve complete synchronization with teaching materials; at the same time, Mini Program version added 6 major application scenarios to meet the daily teaching and office needs. 2) the company's investment in Pishen composition continues to make a breakthrough in the field of AI composition correction. as of the end of Q2, the registered student users of Pishen composition APP exceeded 16 million, and the number of monthly active users was 1.8 million. 3) in the first half of the year, the company established Beijing Haoyang Zhihong Technology Co., Ltd., which provides teachers and students with a digital school-based comprehensive plan of "technology platform + content resources + teaching and research service".
Adhere to the content research and development is the first priority, through the "service + product" model, to promote sustained performance growth.
Content research and development is the first priority of the company in 2023, through high-quality teaching and research services to achieve strong attraction to the school, continue to provide partners with teaching and research service support and guarantee, achieve strong services, drive the new driving force of the market, and achieve win-win cooperation among schools, partners and Century Tianhong. Q3, the company makes every effort to create a new edition of "College entrance examination Blue Book", "College entrance examination General Review Optimization Design (second round of books)", "High School synchronous Learning Plan Optimization Design", new theme edition "selected articles" and other books on the market; at the same time, strengthen the new curriculum standards, new teaching materials, new college entrance examination in-depth innovation research, speed up the upgrading of product value-added resources.
Put this matter into practice and strengthen the depth of teaching and research. In the first three quarters of 2023, the company organized 500 teaching and research service activities across the country, covering 23 provinces; at the same time, it organized more than 300 expert teachers to build a professional teaching and research expert team to dig into the needs of the teaching front line and do more in-depth teaching and research.
Profit forecast and investment advice: it is estimated that the EPS of the company in 23-25 is 0.13 yuan / 0.15 yuan / 0.16 yuan respectively, and the corresponding PE is 86-72-67. As the leader of private publishing, the steady promotion of education AI is expected to further open up the room for growth, with a net profit of 18.6% in the next three years, maintaining a "hold" rating.
Risk hints: the double reduction policy brings the risk of uncertain demand for education; the risk that the R & D and sales progress of education AI system is not as expected; the risk of deterioration of market competition.