China Publishing (601949): Publishing National Teams to Create a High-quality Publishing Industry Chain

China Publishing (601949): Publishing “National Teams” to Create a High-quality Publishing Industry Chain

Core point of view: Outstanding resource advantages, Mayang scale ranks the first in the country for 7 consecutive years, and the major shareholders with a continuous merger background assembled and published “National Teams” (including 7 national first-level publishing houses). The actual controller is a wholly-owned publishing group of the State Council.

The professional and comprehensive publishing endowment ensures that the company ranks first in the country’s book retail market for 7 consecutive years. According to the open book data cited in the company’s annual report, the company’s market share in 2018 was 7.

52%.

Core competitiveness: Relying on scarce resources to create a long-selling book ecosystem The proportion of classic books in the book industry is constantly increasing. The company relies on the scarce resources accumulated by the publishing national team to build a long-selling book ecosystem, and the reprint rate and market share continue to increase.

According to the company’s annual report, old books accounted for about 71% of the company’s overall shipping code in 2018; according to the open-book data cited in the company’s annual report, the company’s share of the country’s book retail market in 2018 increased by 0.

62 points.

The head resources are mainly reflected in: 1) Commercial Press and Zhonghua Bookstore-excellent results in compiling reference books and ancient books. The scale effect of these two books comes from compiling biology and market recognition.The yardage share ranks first in the country.

2) People’s Music Publishing House and China National Fine Arts Publishing House-with outstanding professionalism, both of them have been selected into the national primary and secondary school textbook catalogs. In 2018, the open book monitoring company’s music and art books ranked first and seventh respectively,.
3) People’s Literature Publishing-Public books with exclusive copyrights and high market recognition, benefiting from the improvement of reading requirements of the Chinese language curriculum. In 2018, the opening book monitoring company’s literary books ranked second.

Investment suggestion: It is estimated that the company’s net profit attributable to the parent in 2019-2021 will be 6.

75/7.

44/8.

14 trillion, the corresponding EPS is 0.

37/0.

41/0.

45 yuan / share, the PE corresponding to the closing price on August 29, 2019 is 17.

70 X / 16.

04 X / 14.

66X.

Considering the absolute and relative estimates, we believe that the company’s reasonable and reasonable value is 7.

77 yuan / share, the first coverage given a “buy” rating.

Risk warning: intensified competition in the market for public edition books; changes in related policies for teaching materials; increased costs of online sales channels for books; government subsidies are less than expected; 北京夜生活网 mobile Internet impacts paper reading