As a leading mass publishing company, the company actively applies AI technology to maintain an “gain” rating. We expect the company's EPS for 2024-2026 to be 0.84/1.01/1.11 yuan respectively, a decrease from the previous forecast (1.37/1.52 /none), mainly due to major changes in the published book consumption environment and tax policy adjustments for some state-owned enterprises. The target price was 33.61 yuan (previous value of 54.72 yuan), maintaining the “gain” rating compared to 40xPE in 2024.
On April 29, CITIC Publishing released its 2024 quarterly report, showing a year-on-year improvement in operating and pre-tax caliber. The company's 2024Q1 revenue was 402 million yuan, down 5.79% year on year, and net profit to mother was 38 million yuan, down 9.89% year on year. The tax impact on net profit attributable to mother was quite obvious. Judging from operating profit and total profit before tax, the two increased 27.9% and 23.7% year on year, respectively, with significant improvements.
The company's market share continues to rise and continues to lead the way. According to the opening report data, the company's share of Shiyang's overall book market in 2023 was 3.25%, a further increase of 0.22 percent over the same period last year, and the leading position is stable. The company ranked first in the market for books on management, psychological self-help, and biography. Children's and natural science books jumped to second place in the market, and the ranking of literature and art increased dramatically.
Actively use AI to transform production and products, and related investments continue to advance. In 2023, the company launched the “AIGC Digital Intelligence Publishing Platform” to support book publishing, and jointly released the “CITIC Academy AI Reading Assistant” plug-in with Baidu. Currently, the company continues to build an “AI tool integration platform”, which has now been applied in the fields of editing, marketing, and content production. The goal is to integrate various AI core tools to achieve significant improvements in efficiency.
Risk warning: Industry demand is insufficient, digital transformation falls short of expectations, and AI applications fall short of expectations.