Investment key recommendation logic: 1) The leading cultural industry in the southwest region, the only textbook distribution company in Sichuan Province, the “two-child era” brings demographic dividends, and the textbook teaching aid business has great potential to rise; 2) Responding to the call for “revitalizing Sichuan Publishing” and implementing the “Three Fine Publishing” concept, the variety of influential books has increased, and the children's book business has steadily risen; 3) Highly mature channel advantages. The three major logistics centers spread across the country, and the number of copyright exports has risen markedly; 4) The gross margin of the education informatization and equipment business is growing steadily, becoming a new highlight for future business development 1. Textbook teaching aid business: “Second child The “times” brought a demographic dividend. As the sole distributor of textbooks and teaching aids in the province, it is responsible for the distribution of textbooks for elementary schools and middle schools in Sichuan Province, and also distributes teaching aids for students enrolled in Sichuan Province and some universities, libraries and other institutions. Textbooks and teaching aids contribute more than 50% of revenue and more than 65% of gross profit. It is expected that within the next three years, the number of students enrolled in primary schools will increase markedly. The number of students enrolled in primary schools is expected to be 6.14 million in 2021. The number of middle school and high school numbers has remained stable; the increase is not significant. The total amount reached 10.27 million. Compared with the 9.42 million increase in 2017, an increase of about 9% compared to the 9.42 million in 2017, the demographic dividend will lead to a steady increase in income from textbooks and teaching aids. Implement the “Three Fine Publishing” concept and actively create a popular IP. The company vigorously develops businesses other than textbooks and teaching aids, leading general book publishing with the concept of “three fine publishing”. In 2018, the net profit of the general book publishing business exceeded 100 million yuan for the first time, doubling over 2017. The number of products with market influence has increased. The number of books with sales volume of 100,000 or more was 64 in '18, a fivefold increase over the same period in '16; the number of books that entered the national bestseller list increased to 43 in '18, an increase of 38% over the previous year. The “Mi Xiaoquan Goes to School” series, published in collaboration with children's book writer Kitcat, continued to rise in sales, ranking in the top 50 best-selling children's books in 2019. Actively transform educational information-based products into services. In terms of education informatization, the company focuses on combining students' tutoring needs with informatization, and has launched a series of information technology products with high technological content, including innovative digital products such as AR teaching aids and AR to understand the classroom toolbox in seconds. In recent years, it has gradually transitioned to education informatization services and is actively developing digital campus business. The company piloted the “Excellent Education and Excellent Education” teaching support online sales platform; vigorously implemented youth talent growth plans, piloted urban education service system upgrade projects; and actively explored and promoted research and education services and teacher training services. Profit forecasts and investment advice. It is estimated that the company's EPS in 2019-2021 will be 0.86 yuan, 0.95 yuan, and 1.03 yuan, respectively, and the corresponding PE will be 12 times, 11 times, and 10 times, respectively. The company was given 14 times PE in 2019, with a target price of 12.04 yuan to maintain the “increase in holdings” rating. Risk warning: risk of rising prices of raw materials, paper, and consumables such as ink and board; risk of new business development results or failure to meet expectations; risk of weak development of participating companies.