Citic Press Corporation(300788) (300788)
Key points of the report:
The company has nearly 30 years of development experience, engaged in the full license business of public books, with outstanding growth and profitability. Established in 1993, the Citic Press Corporation(300788) group is a leading comprehensive cultural service provider in China. The company is positioned to provide knowledge services and cultural consumption for the public. It is mainly engaged in book publishing and distribution, bookstore retail and cultural value-added services. The operating performance of the company shows a rapid development trend before and after listing, and the operating revenue increases from 758 million in 2015 to 1.892 billion yuan in 2020, The annual compound growth was 20.07%, and the net profit attributable to the shareholders of the parent company was 282 million yuan, with an annual compound growth of 22.79%. Compared with the listed companies in the industry, Citic Press Corporation(300788) composite growth rate ranks second, with excellent growth, and profitability indicators are in the forefront of publishing listed companies.
Industry analysis: from the demand side, although diversified cultural and entertainment methods occupy national leisure time, national reading habits maintain a good development trend under the policy promotion of national reading and the rise of knowledge payment. Since 2014, the scale of China's book retail market has maintained double-digit growth, and the market scale will exceed 100 billion by 2019. Due to the impact of the epidemic in 2020, the book retail market has maintained a restorative growth trend under the normalization of epidemic prevention and control. Children's books have become the fastest-growing sub category in the field of public reading; In recent years, driven by thematic publishing, the market share of social sciences has been increasing. In terms of channels, the channel pattern with the network as the main body of retail has been formed. In the future, it will be driven by a diversified and fragmented marketing network, and the physical channels will face more urgent transformation demands.
Company highlight 1: the profound accumulation of economic and management books, children's books from catch-up to lead. The company has earlier determined the development strategy with commercial boutiques and best sellers as the core, has a leading advantage in the field of business management books, and has ranked first in the market for many consecutive years; At the same time, it extends to the diversified types of public books, and builds a comprehensive knowledge reading service system from the perspectives of ideology, culture, science, knowledge, cutting-edge and humanistic care, so as to meet the growing cultural knowledge reading needs of the whole people in the new era. In 2015, the company began to focus on children's books, from overseas copyright introduction to strengthening original topic selection and IP cultivation, and accurately positioning books in line with Chinese children's culture and knowledge system. The market share increased from 72 to the first. In the future, the company will expand a variety of product lines around children's book content, from books to content services and content derivation, so as to further open the IP value space of children's books.
Highlight 2 of the company: raise your hand system, give full play to the editorial value, and build an omni-channel and full flow marketing network. At the content level, through the implementation of the show of hands system at the editorial level, the company has formed more than 30 publisher platforms, each with focus and advantages, and relying on Citic Press Corporation(300788) resources and brand advantages to help employees give full play to their value. At present, the company is expanding the content cooperation boundary, building a sharing platform, and building a publishing industry "airbnb" that aggregates investors, publishers, content creators, professional service providers and other practitioners in the whole industry chain. In terms of channels, by strengthening the construction of online and self operated channels, we can more directly reach the market and readers. Take advantage of the rise of traffic platform to quickly respond and cut into new media marketing. In the future, with the improvement of the company's omni-channel and full flow construction and operation, it will not only bring the company a significant increase in book sales, but also a breakthrough in brand and content influence, forming a strong competitive advantage.
Highlight 3 of the company: CITIC Bookstore lightens assets and online transformation, and focuses on online sales at the same time. The asset light project of CITIC bookstore was launched, creating a landmark cultural position and broadening the boundary between Bookstore operation and brand development; The ultimate reading experience focuses on the aggregation and transformation of offline traffic. Take advantage of online "shelf" to expand sales categories and lay a profit foundation for CITIC bookstore.
Investment suggestion: the brand advantage established by the company with high-quality content can help it obtain the voice of channel cooperation, empower each other with the platform, and explore more diversified forms of content realization. In the future, it is expected to launch new products and bring increment in subdivided fields such as theme publishing, children's popular science and English graded books. On the marketing and channel side, the company can quickly respond to the change of online traffic trend, establish its own live broadcasting team, effectively drive the sales of children's books and the expansion of customer base to low-line cities, control the selection and discount in the way of independent operation, and optimize the cost investment; Offline physical stores are actively transforming and optimizing to asset light mode, theme stores and online stores, so as to further consolidate the influence of CITIC Bookstore brand while coping with market changes. Be optimistic about its content value and channel management and control ability. It is estimated that the company's EPS from 2021 to 2023 will be 1.59/1.80/2.26 yuan, corresponding to the closing price of 28.99 yuan on December 17, 2021, and PE will be 18 / 16 / 13 times, maintaining the "overweight" rating.
Risk warning: epidemic recurrence and spread risk; Book sales decline; Risk of piracy and infringement; Risk of intellectual property disputes.
