一般图书：码洋规模降幅持续收窄，公司市占率提升。根据开卷研究的数据，2024年前三季度中国图书零售市场码洋规模仍为负增长，同比下降0.68%，但得益于618电商大促带动和9月新一学年开启，整体图书零售市场码洋降幅较上半年进一步缩小。2024上半年公司实洋占有率同比提升0.11pct，动销品种实洋品种率同比提升0.06pct，新书市场实洋占有率同比提升1%，公司在一般图书市场的影响力持续提升。Key points of investment:
Textbook teaching aids: The number of students enrolled will continue to grow over the next three years, and the company's product development capabilities are strong.
Based on the birth population, it is estimated that the number of students enrolled in primary and secondary schools in Shandong Province will remain at a high level in the next three years, and demand for textbooks will steadily increase, which will continue to drive the company's textbook teaching aid business in the next few years. Shandong Publishing is the sole distributor of free textbooks in Shandong Province and teaching aids reviewed and recommended by the Provincial Department of Education. According to the “2024 Compulsory Education National Curriculum Teaching Book Catalogue”, Shandong Publishing has a total of 14 textbooks selected for the National Curriculum Catalogue. The company has significant advantages in issuing licenses and textbook teaching aid products.
General books: The decline in the size of MaYang continues to narrow, and the company's market share has increased. According to data from the opening study, the size of China's book retail market remained negative in the first three quarters of 2024, down 0.68% year on year, but thanks to the 618 e-commerce promotion and the opening of the new school year in September, the overall decline in the book retail market was further reduced compared to the first half of the year. In the first half of 2024, the company's share of Shiyang increased by 0.11 pct year on year, the variety ratio of the commercial product Shieyang increased by 0.06 pct year on year, and Shiyang's share in the new book market increased by 1% year on year, and the company's influence in the general book market continued to increase.
Innovative business: Cultural tourism research business is developing rapidly. The company's Xinhua Cultural Tourism Group has 4 subsidiaries, which are responsible for operating research trips for primary and secondary school students, research and practical education activities & camp operations, cultural creative design, and high-end customized tourism & cultural tourism for the elderly. The cultural tourism industry chain is gradually improving. In addition, “Xinhua Love Book Club” created by the company has become a leading research brand in the province. It launched more than 6,000 times in 2023, served 0.7 million people, and generated revenue of 0.314 billion yuan, an increase of more than 4 times over the previous year. Cultural tourism research is expected to become a new engine for the company's profit growth.
Dividends are growing year by year, and dividend rates rank among the highest in the industry. According to the company's announcement, the net cash flow from the company's operating activities in 2023 was 2.422 billion yuan, an increase of 12.89% over the previous year; monetary capital and transactional financial assets totaled 8.786 billion yuan. Abundant cash flow and book capital are a solid backing for the company to maintain a strong dividend distribution capacity. In terms of dividends, Shandong Publishing distributed a cash dividend of 0.56 yuan (tax included) per share in 2023, with a total distribution of 1.169 billion yuan. The dividend amount increased by 0.355 billion yuan; the cash dividend rate was 49.19%, an increase of 0.76 pct over the previous year, and the dividend amount and dividend ratio reached record highs. In terms of dividend rate, based on the closing market value on October 28, 2024, the company's dividend ratio was 4.84%, an increase of 0.35 pct over the previous year, ranking 3rd among 18 local state-owned enterprise publishing groups.
Investment advice: Maintain the company's “buy” rating. The company is a leader in cultural publishing in Shandong Province. The core distribution and publishing business is growing steadily, and the innovative business is expected to gradually contribute to the increase in performance.
Furthermore, the company's cash dividends have continued to grow year by year, and the dividend ratio ranks among the highest in the industry. We expect EPS to be 0.80\ 0.87 yuan in 2024-2025, and the corresponding PE will be 14.21\ 12.97 times, respectively.
Risk warning: risk of weak consumption in the book market; risk of student population growth falling short of expectations; risk of innovative business performance not meeting expectations.