\u3000\u3000 Thinkingdom Media Group Ltd(603096) (603096)
On the industry side, in 2021, the National Book retail market was 98.68 billion yuan (an increase of 1.65% year-on-year and a decrease of 3.5% compared with the same period in 2019), and the literature market returned to positive growth
The National Book retail industry has maintained an average annual growth rate of more than 10% from 2015 to 2019. Affected by the epidemic, it now has a negative growth for the first time in 2020. In 2021, the scale of the National Book retail market was 98.68 billion yuan (an increase of 1.65% year-on-year and a decrease of 3.5% compared with the same period in 2019). The National Book retail industry is warming up, but it has not yet achieved new growth before the epidemic; In terms of classification, literary books, as one of the main branches of mass reading, achieved a year-on-year growth of 4.6% in 2021. Their famous new works and online paper books have a great pull, such as Yu Hua’s work “Wencheng” produced by Thinkingdom Media Group Ltd(603096) . In 2021, Thinkingdom Media Group Ltd(603096) Shiyang ranked first among publishing companies; In 2021, books in children’s market, as the category with the largest proportion of codeyang, increased by 1% year-on-year (slightly lower than 2% in 2020). With the development of technology, the retail sales channels of books gradually move from offline to online, from integrated traditional e-commerce to vertical e-commerce, and then to short video platform. The development of e-commerce platform also brings the fluctuation of discount rate, which affects the gross profit margin of book enterprises. With the policy guidance of the publishing industry in the 14th five year plan, it is expected to promote the benign development of its ecology.
Due to internal and external factors, the main business performance in 2018-2021 did not increase significantly
From 2018 to 2020, the company’s revenue was 930 million yuan, 930 million yuan and 880 million yuan respectively (the year-on-year growth rate was – 1.9%, – 0.08% and – 5% respectively), and the profit attributable to the parent company was 240 million yuan, 240 million yuan and 220 million yuan respectively (the year-on-year growth rate was 3.7%, – 0.2% and – 8.6% respectively); In terms of the three-year dimension, the company’s business declined. First, the high base factor (experienced take-off and squatting from 2017 to 2018, the sales of its works increased year-on-year in 2017, and the revenue declined due to the active stripping of the company’s book distribution business in 2018). Second, In 2019, the restructuring and redevelopment affected the main business, but the income of self owned copyright books increased by 8.9%, of which the income of children increased by 25.9%. Third, in 2020, there was an external epidemic, but its overseas income still increased by 35.8%. On the whole, the revenue and profit are relatively flat, but it can be seen from the splitting of the main business that the children’s and overseas income of self owned copyright maintain growth. Fourth, the centenary of the founding of the party in 2021 led to the centralized listing of themed new books, the low-cost promotion of short video e-commerce, and the phased increase of investment in the company’s overseas business, resulting in the decline of profit growth in the first three quarters.
On the progress of original copyright and overseas content in 2022
Since the listing in 2017, the company’s performance has increased greatly due to the Guiwu effect of Dongye, which has helped to improve the market value. The company’s performance was flat from 2018 to 2021, but the company still actively launched high-quality content products, such as “life in the sea”, “Wencheng” and “you fly to your mountain like a bird”. What are you looking at in 2022? Original works were successful, and were born in the WeChat zoo Bibi zoo in July 2019. The sales volume of the September 2021 book, “I can’t help but want to disturb you” official account, is gratifying. The Bibi zoo has won fans’ support under the migration of different media. Its core is to make the best content to the product driven by the ultimate, rather than flow thinking. Thinkingdom Media Group Ltd(603096) always practice being the “discoverer, creator and Guardian” of high-quality content, and its original content products are expected to accumulate a lot; At the same time, an overseas editorial creative team with global vision and senior experience will be established overseas, and the overseas input and output is expected to gradually improve by the end of 2022.
Profit forecast
It is predicted that the company’s revenue from 2021 to 2023 will be 890 million yuan, 1.06 billion yuan and 1.29 billion yuan respectively, the profit attributable to the parent company will be 165 million yuan, 227 million yuan and 283 million yuan respectively, the EPS will be 121 million yuan, 1.67 million yuan and 2.08 yuan respectively, and the current share price corresponding to PE will be 22.6, 16.4 and 13.2 times respectively. On December 1, 2021, the company will complete the repurchase of 160 million yuan (repurchase 4.07 million shares, price range 25.1 ~ 50 yuan / share, average price 39 yuan / share), Thinkingdom Media Group Ltd(603096) adhere to the “high-quality” high-quality content strategy, consolidate the main business bottom in parallel with long-term sales and best-selling, and give the “recommended” investment rating based on the company’s flexible mechanism as a high-quality private book enterprise and its ability to continuously create the breadth and depth of original high-quality content based on its mature experience in Book Planning and distribution.
Risk tips
Risk of topic selection, risk of brain drain, risk that intellectual property protection is not as expected, risk of tax policy change, risk of macroeconomic fluctuation.
