Core Viewpoint - The company reported a decline in revenue for H1 2025 but achieved significant growth in net profit, indicating a shift in business strategy and operational efficiency [1][2]. Financial Performance - In H1 2025, the company achieved operating revenue of 6.335 billion yuan, a year-on-year decrease of 8.09% - The net profit attributable to shareholders was 1.017 billion yuan, an increase of 31.46% year-on-year - The net profit excluding non-recurring items was 999.5 million yuan, up 34.54% year-on-year - In Q2 2025, operating revenue was 3.461 billion yuan, down 11.10% year-on-year, while net profit attributable to shareholders was 648 million yuan, up 32.24% year-on-year [1][2]. Business Structure and Market Position - The company adjusted its business structure, reducing low-margin bulk business sales, which contributed to the revenue decline - The general book publishing segment generated revenue of 318 million yuan, a year-on-year increase of 1.78% - The company held a 5.25% market share in the national book retail market, ranking second, and a 6.07% share in the new book retail market, ranking first - The Hunan Xinhua Bookstore focused on the education service market, achieving sales of 338 million yuan in the "Four-dimensional Reading" series, a 9% increase year-on-year [2]. Cost Management - Sales expenses decreased by 9.28% year-on-year, primarily due to a reduction in labor costs - Management expenses fell by 5.94% year-on-year, also attributed to lower labor costs - R&D expenses increased by 4.35% year-on-year [2]. Digital Empowerment and Education Services - The company enhanced its digital capabilities, with "Beike Network" users reaching 8.52 million and "Xiangjiao Smart Cloud" users at 700,000 - The mobile application "A Jia Education" had 6.37 million users, with an addition of 100,000 users in the half-year - The company developed digital course resources using AIGC, enriching learning scenarios and building a digital curriculum system - The company upgraded its exam assessment products and ensured stable operation of the provincial exam platform [3]. Shareholder Returns - In 2025, the company introduced a mid-term dividend plan, proposing a cash dividend of 1.00 yuan per 10 shares (before tax), totaling 180 million yuan, reflecting a commitment to shareholder returns [3]. Investment Rating - The company maintains a "strongly recommended" investment rating, with expectations for net profit growth from 1.746 billion yuan in 2025 to 1.792 billion yuan in 2027, corresponding to PE ratios of 13.5, 13.4, and 13.2 [4].

Core Insights - The company reported a revenue of 6.335 billion yuan, a year-on-year decrease of 8.09%, while the net profit attributable to shareholders was 1.017 billion yuan, a year-on-year increase of 31.46% [1][2] - The company continues to implement a strategy of multiple dividends per year, with a proposed cash dividend of 1 yuan per 10 shares for the mid-2025 period, totaling nearly 180 million yuan [2] Business Performance - In the publishing sector, the company achieved a market share of 5.25% in the national book retail market, an increase of 0.05 percentage points year-on-year, ranking second; in the new book retail market, the share was 6.07%, ranking first [1] - The company’s educational service market initiatives, including the "Four-Dimensional Reading" series and "Primary and Secondary School Reading Action" series, generated sales of 338 million yuan, a year-on-year increase of 9% [1] Digital Education Sector - The total number of users for the "Beike Network" reached 8.52 million, while the "Xiangjiao Smart Cloud" had 700,000 users, with a total platform access of over 39 million times in the first half of the year [2] - The mobile application "A+ Education" had 6.37 million users, with an increase of 100,000 in the half-year period [2] Future Plans - The company plans to focus on cultivating new productive forces, emphasizing the integration of "culture + technology," and aims to enhance operational efficiency and governance capabilities [2] - The company intends to deepen the development of quality content and improve educational service capabilities to drive high-quality growth [2]