New Classic (603096): The main business of fine operation is stable

Performance summary: The company announced the third quarter report of 2019, and achieved revenue in the first three quarters of 20196.

9 ‰, an annual increase of 3%, net profit attributable to mothers 2 ‰, 7% increase, non-net profit attributable to mothers1.

US $ 600 million, an annual increase of 7%, and the company’s performance was basically in line with expectations.

The company’s main book distribution business remained stable.

In the third quarter of 2019, the company’s general book distribution business achieved sales code 4.

1 ‰, an increase of 3% in ten years, as the company’s core business sector continued to maintain steady growth.

Brand effect + high employee motivation + heavy capital investment + leadership perspective, the company’s book planning capabilities are leading, and the ability to create best-selling books is built.

1) The company has a brand effect in the field of general book publishing. According to the information of the open book information, the company’s share of the company is 1 in 2017.

36%, ranking the publishing company TOP2, the company’s foreign share in 2018 is 1.

01%, publishing company TOP3, high platform value may continue to attract employees; 2) the average salary of the company’s employees has always been higher than the industry average, according to wind data, the company’s average salary in 2018 is 180,000 yuan; 3) the company’s outstanding worksThe maximum expected growth rate is 15% -17%, and the company’s prepayment for 2019H1 will reach 2.

300 million, continue to increase the copyright resources; 4) Since the company ‘s chairman Chen Mingjun founded the new classic in 2002, he has similarly introduced the “Tokugawa Family” and “Lovely Rat” and started the best-selling book journey.

The new Tmall flagship store may bring new growth to the company.

The company set up new classic and love tree official flagship stores in Tmall in 2018Q1.

At present, the Tmall flagship store is in the initial stage of operation. Until the end of October 2019, the total number of store fans is only 3.

60,000 people, and the total number of fans in Jingdong stores reached 32.

30,000 people, online channels can increase potential.

Earnings forecasts and investment advice.

The company’s EPS for 2019-2021 is expected to be 1.

94/2.

14/2.

36 yuan.

Based on: 1) China’s book retail market has maintained a steady growth rate of more than 10%; 2) The company is a leader in literature and children’s best-selling books,杭州夜网 has best-selling book planning capabilities, and continues to add copyright, expand new channels, and accelerate refined operationsTo maintain the “overweight” rating.

Risk reminders: the risk of rising raw material paper prices, the impact of new media forms, and the risk of policy tightening in the publishing industry.