Xinhua Winshare(SH:601811) Southwest Securities·2024-09-09 10:30Investment Rating - The report maintains a "Buy" rating for Xinhua Wenhui (601811) with a target price of 18.75 CNY over the next six months [1][7]. Core Views - The company's performance in H1 2024 met expectations, with revenue of 5.79 billion CNY, a year-on-year increase of 6.6%, and a net profit attributable to shareholders of 720 million CNY, a decrease of 6.1% year-on-year [1]. - The company is focusing on key publishing projects and promoting high-quality development, with significant revenue contributions from educational materials and general book publishing [1]. - The company is enhancing its educational services and digital transformation, with a notable increase in the number of schools and students served by its digital platform [1]. - The company is expanding its reading services through a combination of online and offline channels, enhancing its competitiveness in the national book e-commerce sector [1]. Summary by Sections Financial Performance - In H1 2024, the company achieved revenue of 5.79 billion CNY, up 6.6% year-on-year, and a net profit of 720 million CNY, down 6.1% year-on-year [1]. - The company plans to distribute a cash dividend of 1.9 CNY per 10 shares, totaling 230 million CNY (including tax) [1]. Business Segments - The educational materials and general book publishing segments generated revenues of 2.26 billion CNY and 2.65 billion CNY, respectively, with year-on-year growth of 6.5% and 4.7% [1]. - The company is leveraging local resources and developing key publishing projects, including thematic books and AIGC audiobook production [1]. Digital Transformation - The digital service platform "Wenxuan Youxue" covers 6,036 schools and serves 4.745 million students, driving growth in educational information services [1]. - The company is enhancing its reading service network through a combination of large bookstores, small bookstores, and online reading services, while also expanding its e-commerce operations [1]. Profit Forecast and Investment Suggestion - The forecasted net profits for 2024, 2025, and 2026 are 1.54 billion CNY, 1.71 billion CNY, and 1.89 billion CNY, respectively, with corresponding PE ratios of 12x, 11x, and 10x [1][6]. - The company is expected to benefit from tax incentives under the Western Development Strategy, maintaining a stable and high dividend payout ratio [1][7].