Investment Rating - The report assigns a "Buy" rating for Xinhua Wenhui (0811.HK) with a target price of HKD 12.26, based on a current price of HKD 9.07 [1][3]. Core Views - The company is positioned as a leading publisher in the southwestern region of China, with a strong focus on educational materials and a stable dividend policy [10][27]. - The K12 student population in Sichuan province is expected to remain resilient in the short term, despite a decline in birth rates since 2020, due to the lag effect in enrollment numbers [2][21]. - The company has maintained a robust dividend payout ratio of over 30%, providing a dividend yield of approximately 5% based on current stock prices [2][3]. Summary by Sections Company Overview - Xinhua Wenhui is the only enterprise in Sichuan province with the qualification to distribute K12 textbooks, actively exploring diversified services in reading and education [10][11]. - The company operates 15 wholly-owned publishing units, covering various publishing categories including books, periodicals, and digital media [11][27]. K12 Student Population and Market Recovery - The K12 student population in Sichuan is projected to remain stable for 2024-2025, with expected enrollment numbers reflecting past birth rates [2][21]. - The retail book market is gradually recovering, with online sales channels contributing significantly to growth [24][26]. Publishing Leadership and Dividend Stability - The company is a regional leader in publishing, with extensive cooperative resources and a diversified publishing strategy [27]. - The company has consistently maintained a dividend payout ratio above 30%, with a stable dividend policy that rewards shareholders [2][3]. Earnings Forecast and Valuation - Earnings per share (EPS) are projected to be CNY 1.41, CNY 1.53, and CNY 1.65 for 2024, 2025, and 2026, respectively, with corresponding price-to-earnings (PE) ratios of 5.9, 5.4, and 5.0 [3][4]. - The company is expected to benefit from favorable tax policies and the ongoing development of educational information technology, enhancing its growth prospects [3][4].
新华文轩：教材教辅仍有韧性，高分红率回馈股东