SPM(601900) 中泰证券·2024-03-24 16:00Investment Rating - Buy rating (first coverage) with a market price of 17.59 RMB [2] Core Views - The company is actively expanding its education business, leveraging its content and channel advantages to develop smart education products and after-school services, which are expected to drive future growth [6] - The publishing and distribution business remains stable, with steady growth in textbook and general book sales, supported by the company's reform efforts in education publishing and mass publishing [12] - The company is well-positioned to benefit from the stable competitive landscape in the book publishing industry and the increasing demand for educational services, particularly in the Guangdong region [12] Industry Analysis - The book publishing industry is stable, with steady growth in textbook and general book sales driven by both volume and price increases [5] - AI and other emerging technologies are expected to enhance the education sector, with smart education products likely to accelerate their market penetration [5] - After-school services are in high demand, and the company is well-positioned to capitalize on this trend through its content and channel advantages [6] Company Overview - The company is a leading publisher and distributor in Guangdong, with a comprehensive media business structure that includes traditional publishing, digital publishing, smart education, and after-school education [20] - The company's main revenue sources are publishing and distribution, which accounted for 83.2% of total revenue in 2022 [23] - The company has a strong presence in the textbook and general book markets, with steady growth in both segments over the past four years [24] Financial Performance - The company's revenue grew from 7,598 million RMB in 2021 to 9,647 million RMB in 2023E, with a projected growth rate of 7% in 2023E [2] - Net profit increased from 808 million RMB in 2021 to 1,254 million RMB in 2023E, with a projected growth rate of 33% in 2023E [2] - The company's EPS is expected to grow from 0.90 RMB in 2021 to 1.40 RMB in 2023E [2] Growth Drivers - The company is leveraging AI and other technologies to develop smart education products, such as the "Yuejiao Xunfei E Listening" and "Yuejiao-Aisitong" AI education products, which are expected to drive growth in the education sector [6] - The company is expanding its after-school services, offering customized value-added services and leveraging its strong content and channel advantages to tap into the growing demand for after-school education [6] - The company's textbook and general book businesses are expected to benefit from the stable competitive landscape in the publishing industry and the increasing demand for educational materials [12] Valuation and Forecast - The company's revenue is expected to grow to 96.47 billion RMB in 2023, 108.95 billion RMB in 2024, and 122.15 billion RMB in 2025, with year-over-year growth rates of 6.54%, 12.94%, and 12.11%, respectively [36] - Net profit is expected to reach 1.254 billion RMB in 2023, 1.019 billion RMB in 2024, and 1.127 billion RMB in 2025, with year-over-year growth rates of 32.96%, -18.73%, and 10.54%, respectively [36] - The company's PE ratio is projected to be 12.6x in 2023, 15.5x in 2024, and 14.0x in 2025 [36] Risks - Policy risks related to cultural regulation and changes in preferential policies for state-owned media enterprises [37] - Increased competition from short video and live streaming platforms offering discounted books [37] - Risks associated with outdated information and data used in the research report [37]