Shandong Publishing&Media(601019) 海通国际·2024-11-25 08:50Investment Rating - The report assigns an "Outperform" rating to Shandong Publishing with a target price of 13.16 RMB per share, based on an 18x PE valuation for 2024 [4][72] Core Views - Shandong Publishing is a leading integrated cultural industry enterprise in Shandong, with a comprehensive business model covering publishing, printing, distribution, and supply, along with emerging sectors like digital publishing and study tourism [2][35] - The company's textbook and supplementary materials business remains stable, benefiting from the growing student population in Shandong and the essential nature of educational materials [3][9] - Shandong Publishing is actively expanding its innovative businesses, including study tourism and digital transformation, which are expected to contribute significantly to future growth [3][12][62] - The company has a strong track record of high dividend payouts, with dividend ratios increasing from 47.65% in 2021 to 49.19% in 2023, and is expected to maintain stable dividend payments [4][64] Business Segments Textbook and Supplementary Materials - The textbook business is a core revenue driver, with revenue growing from 5.54 billion RMB in 2020 to 6.88 billion RMB in 2023, achieving a compound growth rate of 7.49% [3][9] - Self-compiled textbook revenue grew at a compound rate of 11.91%, while rental textbook revenue grew at 9.13% from 2020 to 2023 [3] - The company has a strong brand advantage in Shandong, with a well-established textbook system and a growing student population, particularly in higher grades [3][9][46] General Book Publishing - The company published 15,841 books and 141 audio-visual products in 2023, with a reprint rate of 78.5% [3] - General book publishing revenue has been volatile, with a compound growth rate of -4.25% from 2020 to 2023, but the company is focusing on producing high-quality books and expanding sales channels, including short videos [3][10][61] Innovative Businesses - Study tourism revenue grew over 60% year-on-year in the first half of 2024, driven by the development of branded study courses and the expansion of the tourism industry chain [3][12][62] - The company is accelerating its digital transformation, including smart campus projects, after-school services, and digital innovation initiatives [3][12][63] Financial Performance and Forecast - Revenue is expected to grow from 12.85 billion RMB in 2024 to 14.66 billion RMB in 2026, with a compound growth rate of 6.0% [4][72] - Net profit attributable to shareholders is projected to be 1.53 billion RMB in 2024, 1.61 billion RMB in 2025, and 1.70 billion RMB in 2026, with growth rates of -35.8%, 5.6%, and 5.4%, respectively [4][72] - The company's dividend payout ratio has increased steadily, from 47.65% in 2021 to 49.19% in 2023, and is expected to remain stable [4][64] Strategic Initiatives - The company acquired Shandong Laoganbu Zhijia Magazine Co Ltd for 72.68 million RMB in 2023 to avoid competition with its parent group and strengthen its publishing business [4][69] - Shandong Publishing is actively expanding its digital and innovative businesses, including study tourism, smart education, and digital publishing, to drive future growth [3][12][62][63]