Summary of Guomai Culture Conference Call Company Overview - Guomai Culture focuses on integrating high-quality IP with companies that lack operational expertise, employing a reverse topic selection strategy to enhance influence, exemplified by the success of the Chinese version of "Diary of a Wimpy Kid" selling over 1 million copies and the book "Beyond the Notes" related to Lin Junjie [2][5] Core Business Insights - The company operates as an internet-plus publishing entity, concentrating on best-selling books and new sales channels like short video e-commerce, maintaining steady growth in book publishing despite offline market challenges [2][6] - Operating performance, particularly gross margin, remains relatively stable, although net profit attributable to shareholders fluctuates due to offline impacts and investment losses [2][6] AI Technology Development - Guomai Culture is advancing AI proofreading technology, utilizing a fee-based model for publishers and localized deployment for projects like military websites, enhancing production efficiency and labor liberation [2][7][8] - The company has initiated commercial monetization in AI proofreading, showcasing its capabilities through partnerships with publishers and military projects [3][7] Animation Film IP Monetization - Animation film IP monetization is a key strategic direction, with upcoming releases like "Wang Wang Mountain" and "Three Kingdoms Starry Sky" expected to significantly boost profits [2][9] - The collaboration with Light Media for "Three Kingdoms Starry Sky," which has a 30% stake and is responsible for promotion, is anticipated to yield strong box office results, potentially exceeding 2 billion [2][11][14] Market Performance and Expectations - The 2025 summer film market has shown strong performance, with films like "Wang Wang Mountain" exceeding expectations, creating a favorable environment for the upcoming National Day release of "Three Kingdoms Starry Sky" [4][13] - The film's success is projected to contribute significantly to the company's profits, with expectations of a box office performance above 2 billion, supported by a strong promotional strategy and audience continuity [4][14] Additional Insights - The reverse topic selection model enhances the accuracy and stability of the company's selections, ensuring steady revenue and profit growth [4][5] - The company is also exploring AI applications in areas like AI comics and topic selection, indicating a commitment to expanding its AI capabilities [8]

Investment Rating - The investment rating for the company is "Accumulate" with a target price of 18.79 CNY, while the current price is 15.79 CNY [2][11]. Core Views - The company's textbook and educational materials business is stable, and digital textbooks and application services are expected to become a second growth curve, indicating a positive outlook on the company's digital transformation performance [3][11]. - The company plans to distribute a cash dividend of 5.50 CNY per 10 shares, resulting in a dividend yield of 3.4% based on the closing price on June 3 [11]. - The company achieved a significant profit increase in Q1 2025, with revenue of 2.113 billion CNY, a year-on-year increase of 1.21%, and a net profit of 320 million CNY, a year-on-year increase of 110.25% [11]. Financial Summary - Revenue projections for the company are as follows: 9,365 million CNY in 2023, 9,172 million CNY in 2024 (a decrease of 2.1%), and expected growth to 10,543 million CNY by 2027 [5][12]. - Net profit (attributable to the parent company) is projected to be 1,284 million CNY in 2023, dropping to 810 million CNY in 2024 (a decrease of 36.9%), and then recovering to 1,256 million CNY by 2027 [5][12]. - The earnings per share (EPS) are expected to be 1.43 CNY in 2023, decreasing to 0.90 CNY in 2024, and then gradually increasing to 1.40 CNY by 2027 [5][12]. Business Performance - The company's textbook and educational materials publishing achieved sales of 5.36 billion CNY in 2024, a growth of 4.65%, with significant new adoptions in various regions [11]. - The general book publishing segment saw a remarkable sales increase of 51.61%, with popular titles contributing to strong performance [11]. - The company is advancing its digital transformation by integrating digital textbooks into free teaching materials and achieving significant growth in digital media initiatives [11].