New Classics (603096) Interim Review: Adjusting the Structure and Re-developing the New Works and Brightening the Sword
Investment Highlights: In the first half of 2019, we will continue to focus on the revenue growth of major companies6.
The net profit growth rate of 6% deducted from non-return to motherhood was 13%, and the company’s revenue in Q2 2019 increased by 7.
6% attributable net profit increased by 16.
The 33% recovery trend is obvious. The company’s operating income in the first half of 20194.
7.4 billion, an increase of 6 every year.
64%, net profit attributable to mother 1.
19 ‰, an increase of 8 per year.
96%, net profit after deduction to mother 1.
1 ppm, an increase of 13 per year.
01%, net operating cash flow is 0.
45 ppm, an annual increase of 126%, but in a single quarter, the company’s revenue increased by 7 in the second quarter of 2019.
At 6%, the profit attributable to mothers increased by 16.
33%, a clear recovery trend.
Owned copyright literature and children ‘s gross profit margin 50% +, revenues have maintained double growth in the first half of 2019; sales expenses have increased with the scale of own copyrighted books, the company’s operating cash flow has returned to positive, and prepaid supplements have been increased to highlight subsequent book sales confidence 2019In the first half of the year, the company’s own copyright book planning and distribution income.
72 ppm, an increase of 9 per year.
15%, of which, literature and children’s income were 2 respectively.
55 ppm / 0.
8.3 billion, an increase of 4 every year.
79% / 21.
69% (In the first half of 2019, the opening and closing books showed literature, and the growth rate of children’s yards was -2.
65% / 15.
59%). In the first half of 2019, the company’s literature and children’s revenue growth rate exceeded the growth rate of the open-book literature industry. Among them, we believe that the new book “Life and Sea” helped its revenue outperform the industry growth rate.
At the same time, the company’s prepayments for the first half of 20192.
2.6 billion yuan, compared with the same period last year.
The 86 ppm increase was 23%, and the gradual increase in prepayment highlighted the company’s confidence in the follow-up book sales segment.
Restructuring and re-development, new works shine again. From 2015 to 2018, in order to further integrate the company’s high-quality resources, the company continued to enhance the competitive advantages of the content creative core business and enhance profitability. The company adjusted its development strategy accordingly and further increased its investment in content creative business.Reduced spending on book distribution business, and revenue in the first half of 2019 has stabilized.
At the same time as the existing old books have a long history, the company gradually increased prepayment at the end of 2018, which highlights the company’s confidence in the sales of subsequent books.
The hot sales of “Life in the Sea” in the second quarter of 2019 also highlights the company’s content mining capabilities and the ability to create “selling and long-selling” boutique books.
Earnings forecast and investment rating: Maintain buy rating. We are optimistic that the company has successfully launched multi-selling works in the literature and children’s fields other than books. The company’s starting point is to create a long life cycle of products (long 武汉夜网论坛 life cycle products are conducive to the development of potentially stable cash flows)The competitive advantage lies in the “high-quality” strategy, and as a high-quality private book enterprise, the mechanism is flexible; the ability to continue to dig high-quality content is verified again.
In 2019, the company will further focus on the main business, and we expect the company to return to its mother’s net profit in 2019-2021.
81 ppm / 3.
45 ‰ / 4.
30 ppm, corresponding to the latest PE is 27 times / 22 times / 18 times respectively. In April 2019, Mai’s new work “Sea of Life” was released in 60 days, and 600,000 copies were released to boost the second quarter results.Li Yinhe’s “Li Yinhe Says Love” in July, Chang Fei’s new book “The Jiangnan Trilogy”, and “What kind of life do you want to live” selected in Japanese elementary school textbooks bring potential growth momentum to follow-up, 2019 Interim ReportIt shows that the prepayment continues to increase for a long time, highlighting the company’s confidence in the subsequent book sales, and Long Boot maintains the company’s buy rating.
Risk reminders: the risk of selecting topics for book publishing and distribution; the risk of changes in national budget policies and subsidy policies; the risk of new media competition; the risk of non-renewability of copyright contracts; the management risks of rapid business expansion; the waste of raw materials and price risks;Risk of economic fluctuations