\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 052 Guomai Culture & Media Co.Ltd(301052) )
The company issued its annual report for 2021. In 2021, the company realized an operating revenue of 461 million yuan, an increase of 29.83% year-on-year; The net profit attributable to the parent company was 567274 million yuan, a year-on-year increase of 38.73%; The net profit attributable to the parent company after deduction was 525458 million yuan, an increase of 37.87% year-on-year; The basic earnings per share is 0.95 yuan.
Key investment points:
The operation of the company is obviously better than that of the industry as a whole. According to the open book data, in 2021, the sales volume of China’s book retail market was 98.68 billion yuan, an increase of 1.65% compared with 2020. The overall market recovered smoothly, but there was still a decline of about 3.51% compared with 2019.
Relying on the interactive drive of “publishing + Internet”, the company achieved significant growth in operating revenue and net profit in 2021, and the level of operating revenue and net profit was significantly better than that in 2019. The recovery of the company was better than that of the industry as a whole. Among them, the supply of high-quality books achieved a revenue of 370 million yuan through the “best-selling and best-selling” distribution channel, with a year-on-year increase of 22.77%. Through self operated Internet content matrix and marketing, the direct sales revenue of Internet 2C was 670913 million yuan, with a year-on-year increase of 95.29%.
Continue to cultivate Internet channels and create an original “CBC” sales model. At present, the company operates more than 70 Internet product accounts in the whole network. It continues to attract fans and connect users by pushing Internet content such as graphics, text, audio and video. At present, the total number of fans covered has reached 63 million, an increase of 50% compared with the end of 2020. Among them, the number of new media platform accounts with more than 100000 fans has increased from 32 to 52 at the end of 2020.
Through the company’s own internet account matrix, the company accurately pushes the content and product information with high fit to the fan group to realize 2C sales, arouses the topic and heat, and spills the initial flow to large e-commerce platforms and consignment channels to realize 2B sales. For the book products returned from the consignment platform, the 2C sales of unsalable products are realized again in the form of self operated internet account or external talent to bring goods, so as to prevent book direct sales and inventory falling price, It solves the pain point of return and unsalable in the book industry.
Based on the company’s Internet product account matrix and CBC sales model, the company’s Internet 2C sales revenue increased significantly in 2021, the proportion of revenue increased from 9.67% in 2020 to 14.55%, and the Internet advertising revenue increased by 40%. As the gross profit margin of Internet 2C sales and Internet advertising business is higher than that of publishing and distribution business, the increase in the proportion of revenue can drive the improvement of the overall gross profit margin of the company to a certain extent.
Public edition books and copyright books are launched in two lines. The company’s “Guomai classic” series product line is committed to creating high-quality public edition books, such as Madman’s Diary: collection of Lu Xun’s classic novels, collection of Lu Xun’s miscellaneous essays, reading is a portable refuge, the four training for all and Siddhartha, with sales growth of more than 100%. In the field of copyright books, the company has sold 8 million copies of Yi Zhongtian’s Chinese history series, and 2.5 million copies of Mr. Toad’s going to see a psychologist, ranking first in the sales of non fiction books in 2021; In addition, many high-volume book products have been launched in the fields of psychological self-help and social sciences. In 2021, in the ranking of private book companies of mass publishing, the company ranked seventh in the share of codeyang in the book retail market, rising by 1.
The 14th five year plan for copyright work and the development plan for the publishing industry during the 14th Five Year Plan period provide policy guidance for the healthy development of the industry. The development plan of the publishing industry during the 14th Five Year Plan period focuses on building China into a publishing power in 2035, focusing on cultivating publishing and distribution enterprises with prominent main business, strong comprehensive strength and prominent brand value, strengthening the supervision and management of publication prices, promoting the legislation of book prices, and stopping the “price war” of online and offline publication sales; The 14th five year plan for copyright work emphasizes the need to improve the copyright legal system and administrative protection system, and significantly improve the level of copyright protection. In the long run, the implementation of the top-level policy plan will help the book publishing and distribution industry maintain a stable profit margin level and prevent malicious price war and losses caused by pirated books to book publishing and distribution companies.
Investment rating and profit forecast: the company’s main business is outstanding. It has the advantages of author resources, book IP, book planning ability and Wuxi Online Offline Communication Information Technology Co.Ltd(300959) whole system marketing channels. The original “CBC” sales model helps the company maintain a rapid performance recovery speed in the post epidemic era. In the long run, the layout of the company on the Internet media platform is expected to continue to promote the company’s book sales and improve profitability.
The box office of the company’s participation in the film “Four Seas” did not meet the expectations, which may have a certain negative impact on the investment income in 2022. At the same time, the amortization of the expenses of the restricted stock incentive plan issued by the company may also have an impact on the short-term profits, but on the whole, it does not change the competitive advantage of the company’s core book business. It is estimated that the company’s EPS from 2022 to 2024 will be 0.95 yuan / 1.32 yuan / 1.71 yuan. According to the closing price of 37.20 yuan on March 30, 2022, the corresponding PE will be 39.26 times / 28.27 times / 21.77 times, maintaining the company’s “overweight” investment rating.
Risk warning: covid-19 epidemic recurrence and variation risk; Planned book sales and price changes are less than expected; Changes in preferential tax policies; Infringement of copyright; Prepayment risk
