SPM(601900)2025-02-26 16:22Summary of Southern Media Conference Call Company Overview - Southern Media is involved in the publishing and distribution of educational materials, particularly textbooks and supplementary educational resources in China, with a focus on the Guangdong region and expanding into Hong Kong and Macau markets [2][3][4]. Key Points and Arguments Industry and Market Performance - In 2024, Southern Media's revenue from textbook and supplementary materials publishing saw a slight increase, driven by population growth leading to an increase in student numbers, particularly in Guangdong where over 1.1 million new residents were recorded, accounting for 20% of the national increase [3][4]. - The company is actively expanding its business in Hong Kong and Macau, with plans to officially sell Chinese history textbooks in the second quarter of 2025 after modifications based on trial feedback [4][24]. Educational Materials and Standards - Southern Media has achieved a leading position in the approval of national standard textbooks, having passed the Ministry of Education's review for 16 subjects and 96 volumes in 2024, with plans to secure approval for additional high school subjects in 2025 [6][11]. AI Technology Integration - The company is leveraging AI technology in education, incorporating self-developed models into its platforms to enhance teaching and learning functionalities. The "Yuejiao Xiangyun" platform is expected to significantly increase its sales, with AI-assisted lesson preparation projected to double its revenue in 2025 [7][16][17]. New Business Development - To counteract the decline in after-school services, Southern Media is diversifying into new areas such as teacher training and labor practice courses, while also anticipating a rebound in after-school service procurement as local financial pressures ease [5][9]. Financial Performance Expectations - For the first quarter of 2025, the company anticipates a slight increase in revenue and performance, aided by a low comparative base from the previous year and reduced fair value impacts from Dragon Edition Media [13][27]. Tax and Financial Strategy - The company has benefited from tax incentives, which are expected to positively impact its financial results in 2025, with a significant improvement in apparent profits anticipated due to a low base effect from 2024 [15][27]. Expansion and M&A Strategy - Southern Media is focusing on domestic acquisitions to consolidate resources and address competition issues, with plans to pursue further projects as market conditions improve [22]. International Outreach - The company is promoting its educational materials in Belt and Road countries and has plans to translate works by Chinese authors into various languages for international audiences [23]. Market Dynamics in Hong Kong and Macau - The market size in Hong Kong and Macau is comparable to that of a central Chinese province, with high customer spending despite a smaller population. The company is establishing joint ventures to enhance its competitive edge in these markets [24]. Feedback on New Products - The AI lesson preparation tool has received positive feedback from teachers, filling a market gap for music educators and showing strong sales potential even without school procurement [20]. Other Important Insights - The overall trend in general book sales is declining, but this has a minimal impact on the company's performance due to the small proportion of revenue derived from this segment [12]. - The company plans to maintain a stable dividend policy, with potential increases in absolute amounts based on improved operational performance in 2025 [21].