Non-net profit after deduction in '23 increased by 16%, in line with the performance report and maintaining the “buy” rating
The company released an annual report: In '23, it achieved revenue of 13.645 billion yuan (yoy +0.36%), net profit to mother of 2,952 billion yuan (yoy +41.80%), and deducted non-net profit of 2,074 billion yuan (yoy +15.79%). The results are generally consistent with the bulletin. Non-recurring profit and loss is mainly a one-time effect of anticipated adjustments to income tax policies. The company plans to pay a cash dividend of 5.00 yuan (tax included) for every 10 shares, with a dividend rate of 4.63% corresponding to the closing price on April 22. Considering the impact of income tax policies, we adjusted 24-26 net profit to 1,775/19.45/21.25 billion yuan. Comparable company Wind agreed to have an average PE of 13X in 24 years. Considering the company's leading position and the continuous advancement of digital transformation, we gave the company 17X PE for 24 years, gave the target price of 11.9 yuan, and maintained a “buy” rating.
The main publishing and distribution business is steady, and digital technology empowers business development
In terms of publishing business, revenue for 23 was 4.525 billion yuan, down 0.01% year on year. The company continues to increase innovation in content production and continue to enhance the cultural influence of the Phoenix Edition. According to the opening statistics, the company's overall retail market share in '23 was 3.25%, continuing to be at the forefront of the industry, ranking third in the national publishing group; in terms of distribution business, revenue in '23 was 10.489 billion yuan, an increase of 0.56% over the previous year. Fenghuang Xinhua E-Commerce completed sales of 2 billion yuan, integrated the development of its own platform to achieve sales of 100 million yuan, and the Sunshine Procurement Platform innovated the government procurement business model, with annual sales exceeding 200 million yuan. The company strengthens new technology to enable traditional business transformation, build a new publishing and communication system in the digital age; try to apply artificial intelligence technology to enable publishing, develop the Phoenix Zhiling intelligent office platform, and improve office, editing, proofreading and marketing efficiency.
Overall gross margin declined, and interest income increased significantly
The company's gross profit margin in '23 was 37.59%, down 0.84pct. It was mainly affected by the decline in gross margin of the data service and software business. The two fell 3.67/14.32pct, respectively. The gross margin of the main publishing and distribution business, which accounts for relatively large revenue, maintained a slight upward trend: the gross profit margin of the publishing business was 36.86%, the same increase of 0.15pct; the gross profit margin of the distribution business was 31.04%, an increase of 0.08pct; the sales, management, R&D, and financial expenses ratio in '23 was 11.87%/12.65%/0.33%/-3.27%, respectively, -0.19pct/0.36pct/-0.09pct/-1.33pct. Affected by the increase in interest income due to the increase in large deposit books, the financial expense ratio declined, and the overall expense ratio remained stable during the rest of the period.
Accelerate AI to empower the main business, deepen cooperation with mobile, and vigorously develop research business companies will accelerate exploration of the application of AI technology in the publishing field, promote the construction of Phoenix's professional knowledge base and large models, enhance the empowering and supporting role of projects such as the Phoenix Smart Platform and Phoenix Digital People, and achieve cost reduction and efficiency; deepen cooperation with China Mobile to integrate the resource advantages of both sides to accelerate the company's digital transformation; adjust the optimization department's online marketing plan to empower a new round of development of the discipline network through the capital market; expand the research business on a large scale, and strive to build a provincial research and cultivation brand unique to Phoenix within 1-2 years Form a systematic, standardized, and large-scale research business segment.
Risk warning: The progress of digital transformation falls short of expectations, and the publishing and distribution business falls short of expectations