CCLM(SZ:000719) Huachuang Securities·2025-07-09 12:12Investment Rating - The report gives a "Strong Buy" rating for Zhongyuan Media (000719) [1] Core Views - Zhongyuan Media is a high-quality local education publishing company with strong dividend capabilities and a high safety margin, while its new business prospects are promising [1][6] - The company benefits from its unique position as the only listed cultural enterprise in Henan Province, with a complete industrial chain covering publishing, distribution, printing, and educational services [6][13] - The company has a robust business model supported by its licensing advantages and stable revenue from its core publishing and distribution operations [6][8] Financial Summary - Total revenue is projected to grow from 9,857 million in 2024 to 11,189 million in 2027, with a compound annual growth rate (CAGR) of approximately 4.3% [2] - Net profit attributable to shareholders is expected to increase from 1,030 million in 2024 to 1,397 million in 2027, with a notable growth of 22.5% in 2025 [2] - The earnings per share (EPS) is forecasted to rise from 1.01 in 2024 to 1.37 in 2027, reflecting a steady growth trajectory [2] Business Analysis - The company's revenue structure shows that publishing and distribution account for over 75% of total revenue, with distribution contributing 57% and publishing 23% in 2024 [25][31] - The company holds exclusive rights for textbook publishing and distribution in Henan, ensuring a stable demand base due to the large number of K12 students in the province [6][44] - Zhongyuan Media is actively expanding into vocational education, market-oriented supplementary materials, and AI+ education, which are expected to provide additional growth opportunities [6][8] Dividend Capability - The company has a strong willingness and ability to pay dividends, supported by its stable cash flow and low capital expenditure [6][8] - The controlling shareholder, the Henan Provincial Government, has a vested interest in maintaining high dividend payouts, further enhancing the company's safety margin [6][8] Investment Recommendation - The report anticipates steady growth in the company's core business, with potential increases in dividends providing a stronger safety margin [9] - The target price is set at 18.49 yuan, based on a relative valuation method using a 15x PE ratio for 2025 [2][9]