[matters]
On July 15, Earth Media released its 2017 half-year results KuaiBao. According to the announcement, the company's total operating income in the first half of 2017 was 3.807 billion yuan, an increase of 13.68 percent over the same period last year; net profit attributed to shareholders of listed companies was 323 million yuan, up 2.07 percent from the same period last year; and basic earnings per share was 0.32 yuan per share, an increase of 3.23 percent over the same period last year.
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, with the province's Xinhua Bookstore complete distribution and sales channels. The company realized operating income and net profit of 7.89 billion yuan and 673 million yuan respectively, an increase of 10.52% and-4.28% respectively 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, as the regional market leader.
The development of digital business promotes the establishment of an integrated e-commerce platform and accelerates the construction of a digital printing industry park.
In the company's digital business, there are nearly 20000 e-books on the Zhongyuo platform, the mobile APP "16 on" has been put into operation, and the platform has 8000 registered users. 12 kinds of products of China Education Publishing Network have entered the purchasing catalogue of audio-visual teaching materials. Elephant Society ADP5 Digital Publishing and Learning platform 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 "Learning and guidance in Senior High School" was distributed to 160 million copies.
At the same time, the company accelerates the development of Yunshu e-commerce and logistics express business, and strives to create an integrated e-commerce platform characterized by knowledge services. On May 20, 2017, the board of directors decided to approve the "Publishing and Distribution Base Project", "material Trade Base Project" and "Digital Printing Base Project" in the plan of "Central Plains Digital Printing Industry Park" financed by three wholly-owned subsidiaries, to realize the effective integration of the resources of publishing, printing, distribution and material supply within the company. Promote the company's industry to achieve digital, intensive, leapfrog development.
[opinion]
In order to improve the scale of operating equipment, create a comprehensive modern printing industry park, and realize the effective integration of the company's internal publishing, printing, distribution and material supply resources, Xinhua material Group, a wholly owned subsidiary of Dadi Media, plans to purchase 40 mu of land in the automobile industry gathering area of Zhongmou County, Henan Province, to undertake the "material Trade Base Project" in the Central Plains Digital Printing Industry Park planned by the company. The project is expected to have a construction area of about 25000 square meters, with a total cost of about 19.2885 million yuan, which is to be solved by Xinhua Materials Group. At the same time, Xinhua Printing Group, a wholly owned subsidiary of the company, plans to purchase 93 mu of land in Zhongmou County, Zhengzhou City, Henan Province, for the construction of the "Digital Printing Base Project" in the company's overall planning "Central Plains Digital Printing Industry Park". The total construction area of the project is about 114800 yuan, and the related investment cost in the early stage is about 58.7642 million yuan, which is to be solved by Xinhua Printing Group.
In addition, in order to introduce advanced warehousing management concepts and technical equipment, and build a digital, automated, information-based and intelligent modern book logistics system, Henan Xinhua Bookstore Distribution Group, a wholly owned subsidiary of the company, plans to purchase 187.05 mu of land in Zhongmou County, Zhengzhou City, Henan Province, for the construction of the "publication and Distribution Base Project" in the "Central Plains Digital Printing Industry Park" planned by the company. It is mainly used for teaching and auxiliary distribution of teaching materials, business integration of publishing houses in the group and the development of third-party logistics business, forming a modern comprehensive "big logistics" platform with "hardware upgrade, cost management" as the core and professional technology as the support.
Earth Media is also involved in urban cultural real estate, and the company plans to invest 270 million yuan in the logistics distribution and cultural complex operation center project, which is expected to be completed by the end of 2017. The company promotes the transformation and upgrading of physical bookstores by creating cultural complex, compound bookstores, community bookstores and so on.
We estimate that the net profit of returning to the mother in 2017 is 8.48 billion yuan, EPS is 0.72, corresponding to PPUBE is 17.5. we are optimistic that the digital publishing industry park and cultural complex created by the company in the context of state-owned enterprise reform and consumption upgrading are expected to become a medium-and long-term profit growth point. At the same time, the company is also actively trying to expand M & A transformation to accelerate the integration of the industrial chain. For the first time, we have given Earth Media (000719) an "overweight" rating.
[risk Tip]
The growth of the company's traditional publishing and printing business is slow, and the gross profit is low; the construction progress of the company's digital printing industry park and cultural complex is not as expected.