Thinkingdom Media (SH:603096) Zheng Quan Zhi Xing·2025-08-08 22:38Core Viewpoint - New Classics (603096) reported a significant decline in revenue and net profit for the first half of 2025, reflecting challenges in the Chinese book retail market, particularly in non-essential categories [1][8]. Financial Performance - Total revenue for the first half of 2025 was 315 million yuan, a decrease of 30.54% year-on-year [1]. - Net profit attributable to shareholders was 46.88 million yuan, down 48.5% compared to the previous year [1]. - Gross margin improved slightly to 49.43%, an increase of 2.7% year-on-year, while net margin fell to 15.07%, a decrease of 26.12% [1]. - Total expenses (selling, administrative, and financial) rose significantly, accounting for 31.4% of total revenue, an increase of 30.86% year-on-year [1]. Cash Flow and Assets - Cash and cash equivalents decreased by 41.96% to 195 million yuan, attributed to reduced cash receipts from sales and cash dividends [3]. - Operating cash flow per share was -0.77 yuan, a drastic decline of 1837.29% year-on-year [1][10]. - Accounts receivable decreased by 16.57% to 127 million yuan [1]. Liabilities and Expenses - Financial expenses saw a notable increase of 119.3%, primarily due to increased interest income from bank deposits [9]. - Employee compensation liabilities decreased by 52% due to the payment of year-end bonuses [4]. - Tax liabilities increased by 71.08%, reflecting a rise in corporate income tax payable [5]. Market Context - The overall Chinese book retail market faced pressure, leading to a notable decline in sales for the company [8]. - The company's return on invested capital (ROIC) was 6.24%, indicating average capital returns, with a historical median ROIC of 14.62% since its listing [18]. Investment Insights - The company relies heavily on marketing-driven performance, necessitating a deeper analysis of the underlying drivers [20]. - The accounts receivable situation is concerning, with accounts receivable equating to 100.13% of profits [21].