CNS(SH:601098) Guohai Securities·2024-09-11 06:54Investment Rating - The report assigns a "Buy" rating for the company, Zhongnan Media (601098), marking its first coverage [4][9]. Core Views - The publishing business shows steady growth, with a proposed mid-year dividend of 180 million yuan for 2024 [4]. - The company's revenue for H1 2024 reached 6.893 billion yuan, a year-on-year increase of 1.81%, while gross profit was 3.073 billion yuan, up 9.63% year-on-year, resulting in a gross margin of 44.59%, an increase of 3.18 percentage points [5]. - The report highlights that the company's net profit attributable to shareholders for H1 2024 was 774 million yuan, down 20.28% year-on-year, primarily due to the impact of corporate income tax [5][6]. Summary by Sections Financial Performance - In H1 2024, the company achieved a total revenue of 6.893 billion yuan, with a gross profit of 3.073 billion yuan and a gross margin of 44.59% [5]. - The second quarter of 2024 saw a revenue of 3.893 billion yuan, a quarter-on-quarter increase of 29.77% [5]. - The net profit for H1 2024 was 774 million yuan, with a significant drop in net profit attributable to shareholders in Q2 2024, which was 490 million yuan, down 21.45% year-on-year [5][6]. Business Segments - The publishing segment generated 1.708 billion yuan in revenue for H1 2024, a year-on-year increase of 6.99% [5]. - The distribution segment reported revenue of 5.870 billion yuan, with the Hunan Xinhua Bookstore contributing 4.922 billion yuan [5]. Cash Position and Dividends - The company had a strong cash position with 12.755 billion yuan in cash and cash equivalents as of H1 2024, an increase of 30.29% year-on-year [6]. - The company has maintained a stable dividend policy, with a proposed cash dividend of 180 million yuan for 2024 [6]. Earnings Forecast - The report forecasts revenues of 14.677 billion yuan, 15.815 billion yuan, and 17.113 billion yuan for 2024, 2025, and 2026 respectively, with net profits expected to be 1.429 billion yuan, 1.513 billion yuan, and 1.627 billion yuan for the same years [7][8].