城市传媒(600229) - 2018 Q4 - 年度财报

Company Profile and Key Financial Indicators Overview of Key Financial Indicators The company achieved steady growth in 2018, with operating revenue reaching 2.17 billion CNY and net profit attributable to shareholders at 348 million CNY, alongside a 55.15% increase in operating cash flow Key Accounting Data for the Past Three Years | Key Accounting Data | 2018 | 2017 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY billion) | 2.17 | 1.97 | 10.19% | | Net Profit Attributable to Shareholders of Listed Company (CNY million) | 348 | 329 | 5.66% | | Net Profit Attributable to Shareholders of Listed Company After Non-recurring Gains and Losses (CNY million) | 284 | 280 | 1.65% | | Net Cash Flow from Operating Activities (CNY million) | 327 | 211 | 55.15% | | Period-End Data | 2018-End | 2017-End | YoY Change at Period-End (%) | | Net Assets Attributable to Shareholders of Listed Company (CNY billion) | 2.56 | 2.32 | 10.47% | | Total Assets (CNY billion) | 3.76 | 3.53 | 6.65% | Key Financial Indicators for the Past Three Years | Key Financial Indicators | 2018 | 2017 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (CNY/share) | 0.4957 | 0.4691 | 5.67% | | Basic EPS After Non-recurring Gains and Losses (CNY/share) | 0.4048 | 0.3982 | 1.66% | | Weighted Average Return on Net Assets (%) | 14.32% | 14.83% | decreased by 0.51 percentage points | | Weighted Average Return on Net Assets After Non-recurring Gains and Losses (%) | 11.70% | 12.59% | decreased by 0.89 percentage points | - The company's 2018 profit distribution plan is to distribute a cash dividend of 2.00 CNY (tax inclusive) per 10 shares to all shareholders, based on a total share capital of 702,096,010 shares, totaling 140 million CNY in cash dividends[5] Quarterly Financial Data The company's Q4 2018 showed the strongest performance, with operating revenue of 626 million CNY and net profit attributable to shareholders of 156 million CNY, alongside a robust 286 million CNY net cash inflow from operations 2018 Quarterly Key Financial Data (CNY million) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 489 | 556 | 499 | 626 | | Net Profit Attributable to Shareholders of Listed Company | 80 | 81 | 32 | 156 | | Net Profit Attributable to Shareholders After Non-recurring Gains and Losses | 78 | 78 | 24 | 104 | | Net Cash Flow from Operating Activities | -96 | 212 | -74 | 286 | Analysis of Non-recurring Gains and Losses In 2018, the company's non-recurring gains and losses totaled 63.82 million CNY, up 28.16%, primarily driven by government subsidies and non-current asset disposal gains 2018 Non-recurring Gains and Losses Items | Non-recurring Gains and Losses Item | 2018 Amount (CNY million) | | :--- | :--- | | Non-current Asset Disposal Gains and Losses | 20.66 | | Government Subsidies Included in Current Profit and Loss | 39.65 | | Financial Asset Related Gains and Losses | 3.04 | | Other Non-operating Income and Expenses and Other Items | 2.79 | | Minority Shareholder Equity and Income Tax Impact | -2.32 | | Total | 63.82 | Business Overview Main Business, Operating Model, and Industry Overview The company's core business is publishing and distribution, actively expanding into new media and cultural complex operations, amidst a 2018 market shift towards online book sales and supportive national policies - The company has formed a complete industry chain integrating content production and channel dissemination, with businesses covering six major segments: publishing, distribution, new media, film and television, cultural complex operations, and investment[30][31] - Industry data shows that in 2018, China's book retail market reached 89.4 billion CNY in sales value, a 11.3% year-on-year increase Online channel sales reached 57.3 billion CNY (24.7% growth), while physical store sales were 32.1 billion CNY (6.69% decline), indicating online channels are the primary growth driver for the industry[33] - Favorable national policies, including the "Deepening Reform Plan for Party and State Institutions," "Regulations on Further Supporting the Development of Cultural Enterprises," and various tax incentives, provide strong support for the healthy development of the publishing industry[34][35] Core Competencies The company's core strengths include a highly marketized book business, extensive IP assets, an integrated cultural consumption service system, strong international presence, and flexible management - The company's book business is highly marketized, with market-oriented products accounting for over two-thirds of total revenue, and its return on net assets has consistently been double-digit for years, ranking among the industry leaders[37][38] - The company possesses rich copyright resources in high-end humanities, education, lifestyle, and children's categories, serving as valuable assets for IP development and operation Qingdao Publishing's educational products hold a high market share in Shandong Province, and its lifestyle books are nationally leading in market share[39] - Through "Qingdao Urban Media Plaza," various themed bookstores, "Shared Smart Book Kiosks," and a new media matrix, the company has built a multi-layered urban cultural consumption service system[40] - The company actively promotes its "going global" strategy, with copyright export regions and languages expanding annually, ranking 13th among national publishers in terms of overseas collection volume[41] Management Discussion and Analysis Operating Performance Review In 2018, the company's operating revenue reached 2.17 billion CNY and net profit attributable to shareholders was 348 million CNY, driven by growth in core publishing and distribution, alongside strategic advancements in new media and cultural investments - The publishing segment focused on high-quality copyrights, with revenue reaching 928 million CNY, a 10.48% year-on-year increase High-quality and best-selling products were launched across various sub-segments including social sciences, education, children's, and lifestyle[47][48][49] - The distribution segment continued to strengthen channel development, with revenue reaching 1.77 billion CNY, a 9.60% year-on-year increase Physical bookstores underwent transformation and upgrading, online distribution sales exceeded 300 million CNY, and community marketing effectiveness improved[50][51] - New media business expanded well, with VR and digital reading product revenues doubling, and film and television projects progressing orderly Concurrently, leveraging Qingdao Urban Media Plaza, the company built an "urban cultural consumption service system" comprising themed bookstores and shared smart book kiosks[52][53][54] - The company indirectly invested 40 million USD in Ximalaya Inc.'s Series E financing, aiming to generate investment returns and accelerate the development of its full-media industry chain[55] Financial Position Analysis The company's main business revenue grew by 9.71% with a slight gross margin increase to 39.09%, while other business revenue surged 242.43%, and operating cash flow rose 55.15%, maintaining a stable asset-liability structure Main Business by Sector | Sector | Operating Revenue (CNY billion) | Revenue YoY | Gross Margin (%) | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | | Publishing | 0.928 | +10.48% | 47.17% | +0.62 pp | | Distribution | 1.770 | +9.60% | 20.73% | +0.32 pp | | Other | 0.071 | +242.43% | 41.72% | -6.73 pp | Main Business by Product | Product | Operating Revenue (CNY billion) | Revenue YoY | Gross Margin (%) | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | | Textbooks, Teaching Aids | 0.643 | +14.94% | 45.56% | -1.72 pp | | General Books | 1.619 | +8.47% | 29.07% | +1.16 pp | Major Cash Flow Statement Item Changes | Item | Current Period Amount (CNY billion) | Prior Period Amount (CNY billion) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.327 | 0.211 | 55.15% | Increased cash received from sales of goods/services | | Net Cash Flow from Investing Activities | -0.157 | -0.320 | Not Applicable | Decrease in external investments YoY | | Net Cash Flow from Financing Activities | 0.058 | -0.150 | Not Applicable | Increase in borrowings | Major Balance Sheet Item Changes | Item | Period-End Balance (CNY billion) | Period-Beginning Balance (CNY billion) | Change Rate (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Prepayments | 0.085 | 0.055 | 53.75% | Increase in prepaid investments | | Other Receivables | 0.060 | 0.036 | 66.50% | Increase in receivables for land compensation, subsidies, etc | | Other Current Assets | 0.036 | 0.088 | -59.16% | Maturity and recovery of wealth management products | | Long-term Borrowings | 0.174 | 0.000 | Not Applicable | Increase in bank loans | Future Development Outlook and Risks The company anticipates growth from supportive policies and digital publishing, aiming to strengthen its core business and expand through new ecosystems, while managing risks from policy changes, depreciation, raw material costs, and market competition - Industry Trends: National policy support is increasing, the book market is expected to achieve "volume and price increases" driven by "national reading" initiatives, and digital publishing is developing rapidly with a compound annual growth rate as high as 31.3%[82][83][84] - Company Strategy: Fully embarking on a "second entrepreneurship," aiming to become a leading modern cultural enterprise and reform pioneer in China with strong influence, leadership, and competitiveness[86] - 2019 Operating Plan: - Focus on Core Business: Concentrate on publishing major themes and enhance the core competitiveness of education, children's, and lifestyle segments - Build New Ecosystems: Promote "content+" for innovative publishing, "finance+" to drive industry integration, consolidate online sales, and strengthen cross-industry cooperation[89][91] - Key Risks: - Risk of changes in fiscal and tax preferential policies - High fixed depreciation and amortization expenses from the Urban Media Plaza project - Risk of fluctuations in raw material prices such as paper - Risk of intensified market competition - Management risks arising from rapid expansion of new businesses[92][93][94][95][96] Significant Matters Profit Distribution Plan The company's 2018 profit distribution plan proposes a cash dividend of 2.00 CNY per 10 shares, totaling 140 million CNY, representing 40.35% of net profit attributable to shareholders, demonstrating a consistent commitment to shareholder returns Ordinary Share Dividend Distribution Plans for the Past Three Years | Dividend Year | Dividend Per 10 Shares (CNY) (Tax Incl.) | Total Cash Dividend (CNY million) | Ratio to Net Profit Attributable to Parent Company (%) | | :--- | :--- | :--- | :--- | | 2018 | 2.00 | 140.42 | 40.35% | | 2017 | 1.50 | 105.31 | 31.97% | | 2016 | 1.20 | 84.25 | 30.96% | - The company's cash dividend policy is stable, with its articles of association stipulating that the annual cash dividend should generally not be less than 10% of the distributable profit for the year[99] Fulfillment of Commitments The company and its controlling shareholder fulfilled major asset restructuring commitments, with adjustments made to the timeline for property title transfers due to government planning changes - The restricted shares held by the controlling shareholder, Qingdao Publishing Group Co., Ltd., from the restructuring matured after 36 months on September 1, 2018, and were listed for trading, completing the commitment[103][132] - Due to urban redevelopment and government planning adjustments, the company modified the fulfillment period for title transfer commitments of certain defective assets, which was approved by the board of directors and shareholders' meeting[105] Other Significant Matters The company invested 40 million USD in Ximalaya Inc.'s Series E financing through a limited partnership, an investment approved by relevant authorities - The company indirectly invested no more than 40 million USD in Ximalaya Inc.'s Series E financing through a partnership it established, representing approximately 1.27% of the equity interest in the fund's investment target[119] Share Changes and Shareholder Information Share Capital Structure Changes The company's total share capital remained at 702,096,010 shares, but its structure changed significantly as 272,323,931 restricted shares from the 2015 restructuring became fully tradable in September 2018 Share Change Situation | Share Type | Quantity Before This Change (shares) | Increase/Decrease in This Change (shares) | Quantity After This Change (shares) | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 272,323,931 | -272,323,931 | 0 | | II. Unrestricted Tradable Shares | 429,772,079 | +272,323,931 | 702,096,010 | | III. Total Ordinary Shares | 702,096,010 | 0 | 702,096,010 | - The share change was due to the listing and trading of restricted shares issued for asset acquisition and supporting funds during the 2015 major asset restructuring, involving shareholders Qingdao Publishing Group Co., Ltd. and Qingdao Publishing Real Estate Co., Ltd[131] Shareholder Information As of 2018-end, the company had 42,152 shareholders, with Qingdao Publishing Group Co., Ltd. as the controlling shareholder (53.30%) and Qingdao Municipal Bureau of Finance as the actual controller, and state-owned entities dominating the top ten Top Ten Shareholders' Holdings as of the End of the Reporting Period | Shareholder Name | Shares Held at Period-End | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Qingdao Publishing Group Co., Ltd. | 374,191,691 | 53.30 | State-owned Legal Person | | Qingdao Publishing Real Estate Co., Ltd. | 35,034,590 | 4.99 | State-owned Legal Person | | Qin Shurong | 10,805,800 | 1.54 | Unknown | | Qingdao Industrial Development Investment Co., Ltd. | 7,688,605 | 1.10 | State-owned Legal Person | | Morgan Stanley China A Share Fund | 7,136,143 | 1.02 | Unknown | | Luo Yupin | 7,000,000 | 1.00 | Unknown | | Qingdao Guoxin Development (Group) Co., Ltd. | 6,797,174 | 0.97 | State-owned Legal Person | - The company's controlling shareholder is Qingdao Publishing Group Co., Ltd., and the actual controller is Qingdao Municipal Bureau of Finance[135][137] Directors, Supervisors, Senior Management, and Employees Changes and Remuneration of Directors, Supervisors, and Senior Management Significant changes occurred in the company's board and management, including a new chairman in March 2019, with total pre-tax remuneration for all directors, supervisors, and senior management reaching 5.23 million CNY in 2018 - In March 2019, the company's board of directors completed its re-election, with Mr. Wang Weida appointed as the Chairman of the Ninth Board of Directors, and former Chairman Mr. Meng Mingfei retiring from his position[144][148] Remuneration of Selected Senior Executives in 2018 (CNY million) | Name | Position | Total Pre-tax Remuneration | | :--- | :--- | :--- | | Yang Yanliang | Director, General Manager | 0.8366 | | Li Kai | Director, Deputy General Manager, Chief Economist | 0.8788 | | Zhang Huaxin | Deputy General Manager | 0.8917 | | Ma Qi | Deputy General Manager, Board Secretary | 0.5406 | | Su Caixia | Financial Controller | 0.5533 | | Total | / | 5.2317 | Employee Information As of the reporting period, the company and its major subsidiaries employed 1,766 people, with business employees comprising 70.8% and over 57% holding bachelor's degrees or higher, indicating a high-quality workforce Employee Professional Composition | Professional Category | Number of People | Proportion | | :--- | :--- | :--- | | Management Staff (Mid-level and above) | 79 | 4.47% | | Administrative and Logistics Staff | 436 | 24.69% | | Business Staff | 1,251 | 70.84% | | Total | 1,766 | 100.00% | Employee Educational Background | Educational Level | Number of People | Proportion | | :--- | :--- | :--- | | Master's Degree and Above | 169 | 9.57% | | Bachelor's Degree | 841 | 47.62% | | Junior College and Below | 756 | 42.81% | | Total | 1,766 | 100.00% | Financial Report Audit Report Shandong Hexin Certified Public Accountants issued a standard unqualified audit opinion on the company's 2018 financial statements, with key audit matters identified as revenue recognition and allowance for doubtful accounts - The auditing firm issued a standard unqualified audit opinion[175][176] - Key audit matters include: - Revenue Recognition: Due to revenue being a key performance indicator, there is an inherent risk of management manipulating the timing of revenue recognition - Allowance for Doubtful Accounts: The book value of accounts receivable is high, and the provision for doubtful accounts involves significant accounting estimates and judgments[178][181] Core Financial Statement Data As of 2018-end, the company reported total assets of 3.76 billion CNY, equity attributable to parent company owners of 2.56 billion CNY, and an asset-liability ratio of 31.80%, with 2018 operating revenue at 2.17 billion CNY and net profit attributable to parent company owners at 348 million CNY Consolidated Balance Sheet Key Data (CNY billion) | Item | 2018-12-31 | 2017-12-31 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.101 | 0.876 | | Notes and Accounts Receivable | 0.316 | 0.290 | | Inventories | 0.402 | 0.388 | | Total Assets | 3.764 | 3.529 | | Notes and Accounts Payable | 0.696 | 0.890 | | Total Liabilities | 1.197 | 1.208 | | Equity Attributable to Parent Company Owners | 2.560 | 2.317 | | Total Liabilities and Owners' Equity | 3.764 | 3.529 | Consolidated Income Statement Key Data (CNY billion) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Operating Revenue | 2.170 | 1.969 | | Operating Cost | 1.322 | 1.206 | | Selling Expenses | 0.296 | 0.247 | | Administrative Expenses | 0.245 | 0.214 | | Total Profit | 0.352 | 0.335 | | Net Profit | 0.348 | 0.332 | | Net Profit Attributable to Parent Company Shareholders | 0.348 | 0.329 | Consolidated Cash Flow Statement Key Data (CNY billion) | Item | 2018 | 2017 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 0.327 | 0.211 | | Net Cash Flow from Investing Activities | -0.157 | -0.320 | | Net Cash Flow from Financing Activities | 0.058 | -0.150 | | Net Increase in Cash and Cash Equivalents | 0.229 | -0.258 |