Net profit from 24Q1 was 356 million yuan, down 26.3%, maintaining the “Buy” rating company's 24Q1 quarterly report: 24Q1 revenue of 3.344 billion yuan (yoy +3.31%), net profit to mother of 356 million yuan (yoy -26.26%), after deducting non-net profit of 346 million yuan (yoy -24.47%). The decline in performance was mainly due to the expiration of the income tax relief policy. We maintain the 24-26 net profit forecast of 17.75/19.45/2,125 billion yuan, and the 24-year comparable company Wind agreed to have an average PE of 13.5X. Considering the company's leading position and the continuous advancement of digital transformation, we gave the company 17X PE for 24 years, maintained a target price of 11.9 yuan, and maintained a “buy” rating.
Q1 The distribution business grew steadily, and the publishing business declined slightly.
The 24Q1 publishing business revenue was 1,007 billion yuan, down 0.65% year on year, gross margin was 39.26%, up 5.65 pct; distribution revenue was 2,698 billion yuan, up 6.43% year on year, gross margin was 27.86%, down 2.90 pct. In 24Q1, the company's overall gross profit margin was 35.89%, down 2.65pct.
The cost rate for the period showed a year-on-year downward trend
In terms of cost ratio, 24Q1 company's sales/management/ R&D/ finance rates were 11.36%/11.60%/0.18%/-3.32%, respectively, -0.58/-0.35/-0.12/-0.06pct, respectively. The overall cost rate for the period was 19.82%, or -1.11pct year on year. The company's 24Q1 comprehensive income tax rate is 26%.
Accelerate AI to empower the main business, deepen cooperation with mobile, and vigorously develop research business. According to the 23-year report, the company will accelerate exploration of the application of AI technology in the publishing field, promote the Phoenix Professional Knowledge Bank and large model construction, enhance the empowering and supporting role of projects such as the Phoenix Intelligent Platform and Phoenix Digital Man, and achieve cost reduction and efficiency; deepen cooperation with China Mobile, integrate the resource advantages of both sides to accelerate the digital transformation of subject companies; adjust the online marketing plan of the Department of Optimization to enable a new round of development through the capital market; expand the research business on a large scale, and strive to create a phoenix specialty province within 1-2 years Research brands, cultivate and form a systematic, standardized, and large-scale research business segment.
Risk warning: The publishing and distribution business falls short of expectations, and the progress of digital transformation falls short of expectations.