The company is the only cultural listed enterprise in Henan Province, and the largest shareholder is Zhongyuan Publishing Media Investment holding Group, the largest cultural industry group in Henan Province, which holds 77% of the shares of the company, and the actual control is Henan SASAC. The company is mainly engaged in publishing, distribution, material sales and printing business. since it was incorporated into the distribution business in 2014, the scale of the company's distribution business has gradually expanded, while the scale of printing business has gradually shrunk, and the comprehensive gross profit margin has been improved. The company realized operating income and net profit of 7.89 billion yuan and 673 million yuan respectively, up 10.52% and-4.28% respectively over the same period last year, a decrease of 4.55% over the same period last year.
The company's teaching materials and auxiliary business has obvious regional advantages, with a revenue of 4.702 billion yuan in 2016, accounting for 59.59% of the total revenue. The company is the exclusive rental agent of the mainstream textbook publishers in Henan Province, such as the people's Education Publishing House and the people's Music Publishing House, and eight affiliated publishing houses have obtained the qualification for the publication of teaching assistant general disciplines or some disciplines. successfully developed a series of full-discipline, full-category, full-edition brand series of teaching aids, is the regional market leader.
Under the trend that the reform of state-owned enterprises is expected to improve continuously, the digital publishing business and large education system built by the company in the future are expected to become medium-and long-term profit growth points. 1) the company actively promotes digital reform in publishing, printing, distribution and other traditional business: in the digital reading social platform, Reader integrates the content stock and independent construction resources of various publishing houses within the company. now it has nearly 20, 000 e-books and 8000 registered users, and its mobile terminal APP "16 open" has been put into operation. The digital education products and online education services of its China Education Publishing Network have been further optimized, and 12 products have been included in the purchasing catalogue of audio-visual teaching materials. 2) the company's China Education Publishing Network focuses on digital education full-media publishing and full-screen digital content services, and strives to create a technology-leading, marketing-oriented, content-oriented digital resources operation platform. Based on this platform, we focus on expanding the four product lines of educational publishing, educational training, educational services and educational planning, and strive to become a digital communication operator facing the global Chinese market. In addition, the company's first Xinhua Shuttle Kindergarten opened smoothly in 2016, accumulating experience in marching into physical education. 3) the Digital Publishing and Education Integration platform (ADP5) Elephant Society version 1.0 was officially put into operation, the Elephant examination and Evaluation system was put into use and achieved remarkable benefits, and the compound digital teaching assistant "Senior High School Learning and guidance" issued 160 million copies. Yunshu network e-commerce, logistics express business development trend is good, online products up to more than 3 million.
The company will accelerate the upgrading of physical distribution channels to create a cultural complex. 1) the company promotes the transformation and upgrading of physical bookstores by creating cultural complex, compound bookstores, community bookstores and so on. 2) in terms of logistics express business, the company strongly builds the brand of "Xinhua Express", actively participates in the construction and operation of local e-commerce industrial parks and logistics industrial parks, and creates a fourth-level rural cultural e-commerce service station. At the same time, relying on the "Yunshu net" e-commerce platform, 17 new e-commerce operation centers and rural service station construction projects have been added in the past 16 years, and 9600 cultural service stations in hometown villages have been built to extend cultural service terminals to rural areas. effectively solve the problem of "the last kilometer" of cultural services.
Investment suggestion: the company's main publishing business will maintain steady growth. under the trend of continuous improvement in the reform of state-owned enterprises, the digital publishing business and large education system built by the company in the future are expected to become a medium-and long-term profit growth point. It is estimated that the company's net profit for 17-19 years will be 7.17 EPS 8.02 / 892 million yuan and EPS 0.70 0.78 shock 0.87 yuan respectively, corresponding to the previous share price PE 16-14-13 times, given 17 years 20 times PE, target price 14 yuan, "Buy-A" rating.
Risk tips: digital upgrading, education business development is not up to expectations, etc.