reviews
The company is mainly engaged in the publishing and distribution business, and its performance in the first three quarters increased steadily. The company is mainly engaged in the publishing, distribution and printing services of books, periodicals and electronic publications to meet the audience's cultural consumption needs and education needs. In terms of publishing business, the company's publications cover various segments such as social science, education, literature, art, etc., and has won many national publishing awards. It has rich author resources and a wide readership, and has a strong cultural influence in Heilongjiang Province. In terms of distribution business, the Xinhua Bookstore Group and its 77 subsidiaries are mainly responsible for the company's distribution business. It is one of the earliest provincial Xinhua Bookstore groups established in the country. The company's publishing houses also have their own distribution business, mainly distributing publications such as textbooks, general books, and electronic audio-visual products published by the company within and outside the province. In the first three quarters of 2023, the company achieved operating income of 1,642 million yuan, an increase of 14.62% over the previous year, and net profit of 357 million yuan, an increase of 26.26% over the previous year.
As a brand leader in Dragon Edition Books, it has the advantage of massive content resources. The company has accumulated a large amount of content resources in the fields of folk culture, early childhood enlightenment, life care, textbooks, etc., forming a unique content resource advantage. In recent years, it has created a number of long-form quality books such as “Born for You - The Biography of Liu Yongtan”, “Chinese Rice Bowl”, “Sengoku History”, and “Love Across Borders - Historical Memories of Japanese Orphans and Chinese Families”. Various books have been rated as outstanding publications in China, excellent books imported and exported every year, “50 books loved by the public”, “Book Copyright Export Award Program”, etc.
There are 18 major newspapers. “Motto” has become one of the most popular language journals among young people in the country, and has distributed more than one million copies per month.
The company's publishing business has the advantages of a complete industrial chain, and the relevant qualifications are complete. The company has a complete industrial chain of “editing, printing and distribution” of publications (books, electronic audio-visual products, periodicals and newspapers, etc.). It has qualifications such as editing and publishing of publications, printing, wholesale and retail, material trade, etc., and integrates emerging business formats such as digital publishing, creating a good pattern of coordinated development and complementarity of various media formats such as books, journals, and digital publishing.
Investment suggestions: We expect the company's operating income for 2023-2025 to be 19.83/22/24.46 billion yuan, net profit of 5.64/6.15/722 billion yuan respectively, corresponding EPS of 1.27/1.38/1.63 yuan, corresponding to PE14.91/13.66/11.64X, coverage for the first time, and a “buy” rating.
Risk warning: new technology risks, increased competition, profit forecasts and valuations falling short of expectations