SPM(601900)2025-05-06 15:27Summary of Southern Media's Conference Call Company Overview - Company: Southern Media - Industry: Education Publishing and AI in Education Key Financial Performance - Q1 2024 Revenue: 21.13 billion CNY, net profit of 3.2 billion CNY, a year-on-year increase of 110%, and non-recurring net profit of 3.606 billion CNY, up 81.5%, marking a three-year high [2][5] - 2024 Total Revenue: 91.7 billion CNY, with a scale profit of 8.1 billion CNY and non-recurring net profit of 9.4 billion CNY, showing slight revenue decline due to macroeconomic impacts on general books and paper media [3][4] - 2024 Textbook and Auxiliary Income: 84.6 billion CNY, a 1.9% increase year-on-year [2][6] Core Business Insights - Textbook Sales: The Guangdong education version textbooks passed the Ministry of Education's review and are being sold nationwide, with market share in Guangdong continuing to rise [2][6] - General Book Sales: Achieved a sales volume of 42.5 billion CNY, a 51% increase, but revenue growth was impacted by short video platforms and e-commerce discounts [2][6] - Cost Reduction Measures: Significant cost reductions were achieved, including a decrease in paper costs by over 10 million CNY and a reduction of 174 employees [5] AI and Digital Transformation - AI in Education: Launched AI lesson preparation and assistance features on the Yuexiu Xiangyun platform, currently in internal testing with positive feedback [2][7] - Digital Business Growth: Digital business revenue is expected to grow by 35% year-on-year in 2024, driven by the success of various digital products [2][13] Dividend Policy - 2024 Dividend: 0.55 CNY per share, totaling 4.92 billion CNY, with a dividend payout ratio of 60.85% [2][9] - Share Buyback: Plans to repurchase approximately 14 million shares to enhance earnings per share and net assets per share [2][9] Market Position and Competitive Advantage - Yuejiao Star's Digital Textbooks: Offers a comprehensive range of digital textbooks and free access to compulsory education students through government funding, leveraging user data for targeted marketing [2][10][11] - Market Competitiveness: Strong market position due to a wide range of digital textbooks and the ability to understand student needs through data analytics [11][12] Future Outlook - Population Trends: Guangdong's population growth and net inflow of people are expected to peak student numbers around 2028-2029, providing a favorable environment for business growth [4][17] - Response to Declining School-Age Population: The company is diversifying into AI education, customer service, and Hong Kong-Macau textbooks to find new profit growth points [4][17] Tax Policy Impact - Tax Changes: The effective corporate income tax rate was 25% in 2024, with new policies providing tax exemptions in 2025, which will positively impact profits [14][15] Conclusion - Southern Media is positioned for growth through strategic investments in AI and digital education, while maintaining a strong financial performance and a commitment to shareholder returns through dividends and share buybacks. The company is adapting to demographic changes and market challenges by diversifying its offerings and leveraging technology.