Revenue and net profit not attributable to mother grew steadily in 2023. For the full year of 2023, the company achieved revenue of 13.613 billion yuan, an increase of 9.21%; achieved net profit of 1,855 billion yuan, a year-on-year increase of 32.55%; realized net profit without return to mother of 1,552 billion yuan, an increase of 5.69% over the previous year. The company's non-operating profit and loss in 2023 totaled 303 million yuan, mainly due to the one-time impact of adjustments in taxation, accounting and other laws and regulations on current profit and loss, totaling 251 million yuan.
24Q1 revenue increased 12.61% year over year, with high dividends to give back to investors. The company's 24Q1 revenue was 3.0 billion yuan, up 12.61% year on year, and net profit to mother was 284 million yuan, down 18.18% year on year, mainly due to changes in the company's income tax policy. Furthermore, the company has always paid attention to reasonable returns to shareholders, and has accumulated cash dividends of 3.23 billion yuan in the past three fiscal years. In 2023, the company paid out 0.55 yuan per share, with a total cash dividend of 988 million yuan. The dividend payment ratio was 53.26%. Based on the closing price on May 24, the dividend rate was 4.3%. The company also plans to distribute 180 million yuan in cash for the 2024 semi-year.
We believe that in an environment where overall market uncertainty is increasing, high dividends can help highlight the company's value as a defensive asset.
The publishing and distribution business is bright, and digital education is developing well. In 2023, the company achieved revenue of 3.62 billion yuan in its publishing business, an increase of 4.75% over the previous year. The company's general book market position continued to improve. Shiyang's share in the national comprehensive book retail market was 3.8%, and Shiyang's share in the national online bookstore book retail market was 4.05%, all ranking second and steadily in the first position. The distribution business achieved revenue of 11.414 billion yuan, an increase of 14.91% over the previous year. In terms of digital education, the company continues to improve the quality of products such as “Four-dimensional Reading” and “Reading System for Primary and Secondary School Students”, and has also launched two core education and teaching products, “Xiang Education Smart Cloud”, the “Big Child Psychology” mental health platform for children and adolescents, and “E-Class Good Course”. Furthermore, the company plans to strengthen new media operations in the future and improve the “self-broadcast+short videos+talent delivery” model. We believe that the company has been deeply involved in the main business of publishing and distribution for many years, and the growth rate is steady; at the same time, the company's new layout in new media and digital education will bring new impetus to the company's future growth.
Profit forecasting and valuation analysis. We used PE and PS two valuation methods for valuation: 1) referring to comparable companies, we gave the company 14-18 times dynamic PE in 2024, with a corresponding reasonable value range of 11.48-14.76 yuan/share; 2) referring to comparable companies, we gave the company 1.5-1.8 times dynamic PS in 2024, corresponding to a reasonable value range of 12.48-14.97 yuan/share. In summary, we believe that the company's corresponding reasonable value range is 12.48-14.76 yuan/share, maintaining the company's “superior to the market” rating.
Risk warning: Digital transformation falls short of expectations, and book consumption falls short of expectations.