Zhongnan Media (601098) 2019 Interim Review: Steady Results in the First Half of the Year, Publishing and Issuing Business Gradually Achieve Growth

Zhongnan Media (601098) 2019 Interim Review: Steady Results in the First Half of the Year, Publishing and Issuing Business Gradually Achieve Growth

The company released its 2019 Interim Report on August 28, reporting that the two companies achieved operating income43.

65 ppm, a ten-year increase4.

90%; net profit attributable to shareholders of listed companies6.

69 ppm, a five-year increase of 5.


Event Comment Q2 performance exceeded the flat month-on-month improvement, and net operating 杭州桑拿网 cash flow turned positive.

1) The company achieved operating income of 25 in the second quarter of 2019.

250,000 yuan, 0 compared with the same period last year.

06%, QOQ37.

25%, realizing net profit attributable to mother 3.

710,000 yuan, -0 year on year.

54% in the second quarter.


2) In the total report, the company’s comprehensive gross profit margin remained stable at 42.

60% year-on-year.

05%, sales, management, R & D and financial expense ratios are 13 respectively.

59%, 11.

66%, 0.

6%, -1

34% year-on-year.

57%, -0.

69%, -0.

03%, -0.


3) Benefiting from the reported performance, the company’s sales receipts are better, and the company’s net cash flow from operating activities is 2.

87 megabytes, one year period turned positive; as of the end of the reporting period, the book value of the company’s accounts receivable was 17.

3.9 billion, an increase of 36 from the beginning of the period.

18%, the increase mainly comes from the government-purchased deferred payment of education subsidies for poor students, and the aging is concentrated within one year.

Revenue from distribution and publishing business returned to growth and diversification was strengthened.

1) Report on a series of companies’ issuance business to realize income33.

09 million yuan, 8 year-on-year.

21%, gross margin 32.

86%, -0.


The textbook teaching supplementary distribution actively participates in high school and privately-run distribution gaps, and achieves sales recovery through various methods such as online subscription; other distribution companies such as New Textbook Company and Jiahui Company expand the teaching supplementary and disciplines while consolidating the main business of Hunan version textbooks.Training, promotion textbooks and other products and services; general books focused on current affairs books, and “National Cadre Study Training Textbooks” were issued13.

80,000 sets, nearly 68 million yards; develops new customers such as Hunan Women’s College College and Secondary School and Provincial Children’s Library with respect to bulk and cultural products, and wins government procurement projects in finance, traffic police, urban construction and other fields.

2) Report on a series of companies’ publishing business11.

640,000 yuan, 10 compared to the same period last year.
99%, gross margin 36.
25% year-on-year.


Among them, the general book publishing business sells code Yang 4.

7.6 billion yen11.

28% (unaudited), the new book “Children” became a non-fictional best-selling TOP1, and “Always get used to one person” has entered the top of multiple sales channels, and several themes have been selected for national key publications and publishing funds.
The company published Ma Yang in the composition, science, comprehensive arts, literature, psychological self-help and other markets in the top three, the total Ma Yang market accounted for the total.

81%, ranked first in the square.

In addition, in terms of digital reading and publishing, a variety of audio content reading materials and a series of audio courses were launched. The Children’s Agency actively planned the “National Defense Education AR Animation Book Series” to expand the company’s publishing categories and rich product forms.

Continue to promote digital education, and financial sector performance is solid.

1) The report aims at the company’s promotion of digital education business, taking Tianwen Digital Media education products as the core, increasing the coverage of more than 200 schools in 10 counties and districts, and promoting its strategy with urban areas such as Beijing Dongcheng District, Shanghai Minhang District, Changsha, Putian, etc.Cooperation; Shell Network added 1.07 million users and newly developed content6.

60,000 articles, introduced 1.

80,000; Zhongnan Xunzhi expands Shaoyang, Huaihua, Zhangjiajie and markets outside the province.

2) Report financial company to realize net profit1.

39 billion, a year-on-year increase of 3.

22%, successfully obtained the securities investment business qualification; Perfus Fund newly added Kefu medical investment projects, etc.

Investment suggestion: The company’s main business is ups and downs, and the publishing and distribution business returns to growth. The combined company’s performance is a stable moat.

The company’s 2019-2021EPS is expected to be 0.



82, corresponding to the closing price of 12 on August 27.

The 42 yuan PE is 17/16/15, maintaining the overweight level.

Risk reminders: risks of policy changes; intellectual property rights being violated by piracy; increased competition leading to rising copyright prices.

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