Shandong Publishing&Media(601019) 东吴证券·2024-11-01 22:38Investment Rating - The report maintains a "Buy" rating for Shandong Publishing (601019) [1][4] Core Views - Shandong Publishing's Q3 2024 performance faced short-term pressure, with revenue declining 9% YoY to RMB 2.6 billion and net profit attributable to shareholders dropping 40% YoY to RMB 220 million [2] - The company's study-tourism business is steadily progressing, with strategic cooperation agreements signed to develop high-quality cultural tourism products [3] - Despite near-term challenges, the report remains positive on the company's long-term prospects due to Shandong's large population driving sustained demand for books and the company's progress in study-tourism [4] Financial Performance Revenue and Profit - 2024 Q3 revenue decreased 9% YoY to RMB 2.6 billion, with gross profit also down 9% to RMB 800 million [2] - For the first nine months of 2024, revenue increased 6% YoY to RMB 8.5 billion, while net profit attributable to shareholders decreased 23% YoY to RMB 970 million [2] - 2024-2026 revenue forecasts are RMB 12.946 billion, RMB 14.264 billion, and RMB 15.054 billion respectively [1] Profit Margins - Q3 2024 gross margin remained stable at 32% YoY, while net margin attributable to shareholders decreased 4 percentage points to 8% [2] - For the first nine months of 2024, gross margin decreased 0.5 percentage points to 36%, and net margin attributable to shareholders decreased 4 percentage points to 11% [2] Business Segments Publishing Business - Publishing business revenue grew 0.3% YoY to RMB 2.6 billion in the first nine months of 2024, with gross margin increasing 1.5 percentage points to 28% [3] Distribution Business - Distribution business revenue increased 4% YoY to RMB 6 billion in the first nine months of 2024, with gross margin decreasing 0.9 percentage points to 32% [3] Strategic Developments - Shandong Xinhua Cultural Tourism Development Group signed a strategic cooperation agreement with Anhui Times Education to develop study-tourism products and routes [3] - The cooperation will focus on student study tours, high-end customized tourism, elderly health tourism, and cultural creative product development [3] Valuation and Forecasts - 2024-2026 EPS forecasts are RMB 0.73, RMB 0.83, and RMB 0.87 respectively [1] - Current P/E ratios for 2024-2026 are 14.68x, 12.87x, and 12.21x respectively [1] - 2024-2026 net profit attributable to shareholders forecasts are RMB 1.517 billion, RMB 1.730 billion, and RMB 1.824 billion respectively [9] Financial Position - As of 2023, the company had total assets of RMB 22.854 billion and total liabilities of RMB 7.991 billion [9] - The company's debt-to-asset ratio was 34.97% in 2023, expected to decrease to 30.96% by 2026 [10]