Central South Media (601098): Stable growth of various businesses and profitability in line with expectations

Central South Media (601098): Stable growth of various businesses and profitability in line with expectations

Core point of view: The company disclosed the 2019 Interim Report: 2019H1 revenues will increase by 4 as well.

90% to 43.

6.5 billion; net profit attributable to mother increased by 5.

20% to 6.

690,000 yuan, the non-net profit attributable to the mother increased by 8.

19% to 6.

4.8 billion.

1) The main business of publishing and publishing has grown steadily by 9% -11%. The company has absorbed the impact of the policy of teaching and improvement through active sales strategies.

H1 publishing business achieved revenue in 201911.

64 ppm, an increase of 10 in ten years.

99%, corresponding to a gross profit margin of 36.

25%, an increase of 3 over the same period last year.

25pp, mainly due to the improvement in the gross profit margin of the textbook teaching auxiliary publishing business.

Issuance business realized revenue 33.

09 million yuan, an increase of 8 in ten years.

21%, corresponding to a gross profit margin of 32.

86%, basically the same as last year.

2) Popular book market: Mayang’s market share and number of best-selling books lead the country in the first half of 2019. General book publishing business achieved revenue2.

13 ppm, an increase of 10 in ten years.

98%.

The company occupies revenue in the country’s book retail market.

At 81%, the number of best-selling books published nationwide is leading. From January to July 2019, a total of 17 books have entered the monthly best-seller list of open-book retail channels, and an average of 7 books have been added to the list each month.

3) The digital education business module is making steady progress. The “Smart Education Ecology” tree with core applications based on the ECO Cloud Open Platform, AiClass Cloud Classroom, AiSchool Smart Campus, AiCloud Education Cloud, School Neighborhood App, and ECR Resource Cloud Platform as core applications is complete.Format layout.

Shell Network focuses on the smart campus product line and smart learning product line. The smart campus is oriented towards the 2B end and the smart learning is 杭州桑拿网 oriented towards the 2C end.

Zhongnan Xunzhi mainly provides education quality monitoring and examination services, and its products mainly include examination scoring systems and examination evaluation systems.

Investment suggestion: The company’s net profit attributable to mother is expected to be 13 in 2019-2021.

32/14.

16/15.

40,000 yuan, the corresponding EPS is 0.

74 yuan / share, 0.

79 yuan / share, 0.

84 yuan / share, PE corresponding to the closing price on August 28, 2019 are 16 respectively.

92X, 15.

92 X, 14.

99X.

Based on the absolute estimation method, we consider the company’s reasonable value to be 14.

03 yuan / share, maintaining the “overweight” rating.

Risk reminders: Decrease in the number of births; changes in regulatory policies in the education industry; slower growth in 杭州夜网论坛 the book industry; less-than-expected development of the company’s innovative business; changes in paper prices.

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