SPM(SH:601900) Orient Securities·2024-09-27 00:28Investment Rating - The report assigns a "Buy" rating for the company with a target price of 14.85 CNY based on a P/E ratio of 15 times the adjusted average of comparable companies for 2024 [4]. Core Views - The company is a leading publishing and distribution enterprise in Guangdong Province, with a stable performance in its core business of educational materials and a growing focus on educational services [2][18]. - From 2019 to 2023, the company's revenue increased from 6.525 billion CNY to 9.365 billion CNY, with a CAGR of 9.45%, while net profit attributable to shareholders rose from 733 million CNY to 1.284 billion CNY, achieving a CAGR of 15.03% [2][18]. - The company is actively exploring new growth avenues in education-related sectors, including digital education and after-school services, which are expected to contribute to future revenue streams [2][18]. Summary by Sections Company Overview - The company is a state-owned enterprise controlled by the Guangdong Provincial Government, established in 2009, focusing on a complete publishing and distribution industry chain [13][14]. - It has a strong foundation in educational publishing, particularly in K12 educational materials, and has integrated its distribution channels to enhance operational efficiency [13][14]. Financial Analysis - The company has shown steady growth over the past five years, with a revenue increase from 6.525 billion CNY in 2019 to 9.365 billion CNY in 2023, and a significant net profit increase of 34.4% in 2023 compared to the previous year [18][19]. - The gross margin improved from 29.5% in 2019 to 31.8% in 2023, while the net margin increased from 11.4% to 15.4% during the same period [21][22]. Business Segments - The publishing and distribution segments are the primary revenue sources, with distribution revenue growing from 3.65 billion CNY to 7.34 billion CNY from 2019 to 2023, reflecting a CAGR of 19.1% [25]. - Educational materials, including textbooks and supplementary materials, accounted for approximately 60% of the company's revenue, with a CAGR of 15.3% from 2019 to 2023 [25][26]. New Business Initiatives - The company is advancing in digital education, launching platforms such as the "Yuejiao Xiangyun" digital textbook platform, which had over 43 million active users in 2023 [13][18]. - It is also expanding its after-school service offerings, generating approximately 200 million CNY in revenue from these services in 2023 [2][18].