WANXIN MEDIA(601801) 华创证券·2024-08-20 23:40Investment Rating - The report assigns a "Recommend" rating to Wanxin Media (601801) for the first time, with a target price of 8.04 yuan, representing a potential upside of 19% from the current price of 6.76 yuan [1][3][6] Core Views - Wanxin Media is the leading state-owned publishing group in Anhui Province, with a stable competitive position in the local education market due to its exclusive textbook distribution license [1][13] - The company has a solid foundation in its core education business, with stable demand for textbooks and supplementary materials, and is actively exploring new growth opportunities in areas such as smart education, AI+, study tours, and gaming [1][5][6] - Wanxin Media has a strong cash position, with 10.9 billion yuan in cash and cash equivalents as of Q1 2024, and has been increasing its dividend payout ratio, which reached 68.9% of net profit in 2023 [1][25] Business Segments Education Business - The education business, including textbook distribution and educational equipment, accounted for 16% of revenue in 2023, with stable growth expected due to the relatively rigid demand for educational materials [1][13] - The company has successfully implemented 54 smart classroom demonstration projects, covering over 2,000 schools nationwide, and has developed educational platforms such as "Beautiful Science" [1][37] AI+ Education - Wanxin Media has launched AI-powered educational products, including the Zhu Zi educational robot and the Wanxin Learning Machine developed in collaboration with Huawei, leveraging AI technology to enhance the learning experience [1][38] Gaming Business - The company's self-developed gaming platform, Cube Game, has released 444 games and has over 2 million registered users as of the end of 2023, with notable titles such as the "Chinese Paladin" series and "Sekiro: Shadows Die Twice" [1][40] Supply Chain and Logistics - The supply chain and logistics business accounted for 34% of revenue in 2023, with the company actively expanding into areas such as cold chain logistics and smart warehousing [1][45] Financial Performance - Revenue in 2023 was 11.24 billion yuan, a decrease of 3.8% year-over-year, primarily due to the company's strategic adjustment to reduce low-margin businesses [21] - Net profit attributable to shareholders in 2023 was 936 million yuan, an increase of 32.2% year-over-year, with a CAGR of 14% from 2019 to 2023 [23] - The company's gross margin improved to 27.48% in Q1 2024, up from 18.05% in 2018, driven by the reduction of low-margin businesses [22] Valuation and Forecast - The report forecasts net profit attributable to shareholders of 878 million yuan, 948 million yuan, and 1.053 billion yuan for 2024, 2025, and 2026, respectively, representing year-over-year growth rates of -6.2%, 8%, and 11% [6][50] - The target price of 8.04 yuan is based on an 18x PE multiple for 2024, compared to the industry average of 14x, reflecting the company's faster growth in its core business and the rapid development of new businesses [6][50]