Performance summary: Xinhua Wenxuan released the third quarter report of 2022. In the first three quarters of 2022, the company achieved revenue of 7.33 billion yuan, an increase of 3.9% over the same period last year; net profit of 770 million yuan, an increase of 9.2% over the same period last year; deducting 750 million yuan of non-net profit, an increase of 3.2% over the same period last year; Q3 income of 2.35 billion in 2022, down 1.9% from the same period last year; net profit of 54.604 million yuan, down 47.8% from the same period last year; and 110 million yuan of non-net profit, down 1.9% from the same period last year.
The publishing business has obvious advantages, and the teaching and auxiliary publishing of teaching materials has developed steadily. In the first three quarters of 2022, the company's publishing revenue was 2.28 billion yuan, with a gross profit margin of 36.4%. Among them, teaching materials achieve sales code 2.73 billion, income 1.53 billion yuan, gross profit margin is still at a high level of 43.7%; general books achieve sales code 2.05 billion, income 500 million yuan, gross profit margin is 22.4%. Through intensive cultivation and coordinated development of various links, the company ensured the supply of teaching materials for primary and secondary schools in the autumn of 2022 and completed the political task of "book arrival before class" for 44 consecutive years. In the first half of the year, the company also published a series of books on key themes such as "I love China all my life: the Story of Isabel Crook" and "Golden Regiment", which continuously improve the quality of publishing books.
The issuing capacity has been continuously improved, and educational services have reached a new level. In the first three quarters of 2022, the company's issuing business income was 6.44 billion yuan, with a gross profit margin of 27.8%. The educational service business accounts for the leading part of the company's distribution business, and the income of 2022Q1-Q3 is 4.01 billion yuan, of which 3.8 billion yuan is the income of teaching materials and auxiliary distribution. As of 2022H1, the company has continuously optimized and upgraded the online service platform of "excellent Learning and excellent Education", covering 6319 schools and serving 4.52 million students; business orders for labor and practical education reached 7.7 million yuan, serving more than 30,000 students; and teacher training business orders reached 16.37 million yuan, serving more than 90,000 teachers.
Internet e-commerce is developing rapidly to build a complete logistics network. 2022Q1-Q3, fertilization refines the improvement of category operation level, the impact of technological innovation on commodity organizations and logistics organizations, Internet sales business performance is eye-catching, achieving sales code of 3.6 billion, revenue of 1.84 billion yuan. In the future, the group will continue to consolidate its dominant position in book e-commerce, build a complete logistics network, and consolidate the development advantages of the enterprise.
Profit forecast and investment advice. It is estimated that the net profit from 2022 to 2024 will be 1.41 billion yuan, 1.55 billion yuan and 1.72 billion yuan, corresponding to 10 times, 9 times and 8 times PE respectively. Considering the continuous optimization of the company's online platform and the steady development of the education service business, as the company pays close attention to the Internet sales model, optimize the store business layout and maintain the "buy" rating, it is recommended to pay attention to it.
Risk hints: 1) the increasing risk of cross-border competition among emerging Internet enterprises; 2) the risk of advanced technology constantly reshaping the business form and management model of traditional publishing.