SPM(SH:601900) HTSC·2025-08-28 08:26Investment Rating - The report maintains a "Buy" rating for the company with a target price of RMB 18.41 [7][5]. Core Views - The company achieved total operating revenue of RMB 3.972 billion in H1 2025, a year-on-year decrease of 1.3%, while the net profit attributable to shareholders increased by 50.74% to RMB 451 million, aligning with the performance forecast [1]. - The company is expected to continue benefiting from the demographic advantages in Guangdong, leading to sustained performance improvements [1]. - The report highlights the company's effective cost control measures, particularly in paper costs, which contributed to a slight increase in gross margin to 35.01% [2]. - The publishing reform initiatives have shown significant results, with notable sales figures for new publications and a strong position in educational publishing [3]. - The company is advancing its "Digital and Intelligent South Transmission" strategy, enhancing its digital education platforms and AI applications, which are expected to drive future growth [4]. Summary by Sections Financial Performance - In H1 2025, the company reported total operating revenue of RMB 3.972 billion, with a net profit of RMB 451 million, reflecting a 50.74% increase year-on-year [1]. - The gross margin for H1 2025 was 35.01%, up by 0.79 percentage points, primarily due to effective paper cost management [2]. - The company’s net profit forecast for 2025-2027 has been slightly adjusted to RMB 11.19 billion, RMB 12.64 billion, and RMB 14.15 billion respectively [5]. Strategic Initiatives - The company has accelerated its publishing reform, achieving significant sales milestones with new titles and expanding its educational publishing footprint [3]. - The "Digital and Intelligent South Transmission" strategy has led to the deployment of digital educational resources across 19,151 schools in Guangdong, with over 15.89 million active users [4]. Valuation - The report assigns a PE ratio of 14.5X for 2025, based on the company's strong market position and growth potential, leading to a target price of RMB 18.41 [5].