Chinese Universe Publishing and Media Group Co.,Ltd. (referred to as "Chinese Media") recently stated during an investor inquiry that it plans to fill gaps in its industry chain through strategic mergers and acquisitions, particularly in areas like vocational education, in order to achieve its established development goals.
The financial report for the first quarter of 2023 released by Chinese Media indicates that the company holds over 10 billion yuan in cash and cash equivalents. Many investors have questioned how the company plans to utilize such a substantial cash reserve. Chinese Media responded by stating that the board of directors formulates an annual plan for fund utilization at the end of each year. For instance, this year, 7 billion yuan has been allocated for financial projects, primarily focused on low-risk investment products to preserve and increase asset value. In the future, the company intends to fill industry chain gaps through strategic mergers and acquisitions, especially in areas such as vocational education, to accomplish its established development objectives. The main directions for mergers and acquisitions involve expanding the product chain, extending the industry chain, and enhancing the value chain. Equity participation will be the primary means, with a focus on digital technology, content development, and platform channels. The goal is to construct an ecosystem of complementary resources, strategic overlap, and mutual empowerment with related enterprises in the ecological chain. During the performance briefing held by Chinese Media on September 7th, the company's secretary, Mao Jianbo, stated that the company would continue to focus on education industry services and strive for incremental growth in the children's book and vocational education markets.
Chinese Media's interim financial report for 2023 reveals that it is the first listed company in the industry to obtain an external AAA credit rating. The company has currently established a diversified financing structure. Up to now, the company has achieved significant progress in diversification, leveraging the transformation of old and new driving forces, with project development transitioning from isolated initiatives to a more comprehensive approach. Firstly, the company has actively pursued channel development. Its subsidiary, the 21st Century Publishing Group, has established joint ventures with Jiangxi Doubanjiang Cultural Industry Development Co., Ltd. and China Peace Publishing House with Wuhan Bella Bear Smart Technology Service Co., Ltd., fully leveraging their respective strengths to expand new media marketing channels. The subsidiary, Jiangxi Education Publishing House, has further strengthened cooperation with high-quality publishers such as Milai Children's Books and Bu Yin Culture, continuously enhancing market brand influence and establishing a preliminary online and offline marketing channel network. This has resulted in increased competitiveness in publishing, with the book "Hilarious Compositions" gradually becoming a bestseller, accumulating over 1 million copies sold. Secondly, the company has implemented a transformation strategy in full force. In the first half of the year, the company vigorously promoted the reconstruction of its well-known newspapers and periodicals, benchmarking against excellent enterprises and forming a comprehensive publicity matrix combining "online + offline" and "traditional media + new media + outdoor media." Jiangxi Morning Daily, the company's comprehensive media platform, saw a fan base increase of over 1.95 million in the first half of the year, with a year-on-year revenue growth of 142.77%, indicating a robust development trend. Thirdly, the company has made steady efforts in the capital market. In the first half of the year, its subsidiary, Jiangxi Blue Ocean International Investment, carefully laid out its primary business sector and formulated investment strategies, resulting in substantial capital gains. In May of this year, Zhiming Xingtong successfully entered the New Third Board Innovation Layer with stable performance and sound governance mechanisms.
Regarding education services, Chinese Media stated that since the implementation of the "double reduction" policy, the company has actively adapted to policy changes, understood market demand, and implemented specific measures to enhance the quality of educational contents and accurately plan in the field of quality education. For example, its subsidiary, Xinhua Cloud, cooperated with the Education Department of Jiangxi Province to provide technical support for the "Smart Homework" platform. By offering services such as homework notification, micro-course learning, data analysis, and homework grading, the platform aims to scientifically reduce students' academic burden. This application has been selected as a typical case for implementing the "double reduction" policy and has achieved full coverage within Jiangxi Province, receiving recognition from parents, schools, and education authorities, and generating significant social benefits. Chinese Media's platform, "Jiangxi Xinhua Online," is dedicated to creating a fusion of online and offline scenarios, innovating the sales model for educational and general books, gradually promoting the digital integration of various business operations and enterprise management, and establishing a province-wide "one network" for Jiangxi Xinhua. The platform has already been officially launched.
This year, the company has actively optimized and adjusted its revenue structure, reducing the scale of its trading business and improving its operational quality. In the first half of the year, it achieved a net profit attributable to shareholders of the listed company of 845 million yuan, a year-on-year increase of 10.59%. It also recorded operating income of 5.03 billion yuan and basic earnings per share of 0.62 yuan, representing a year-on-year increase of 10.71%. The weighted average return on net assets was 4.77%, an increase of 0.19 percentage points compared to the previous year. As of June 30th, the company's total assets amounted to 32.144 billion yuan, an 11.88% increase compared to the beginning of the year, with net assets attributable to shareholders of the listed company reaching 17.315 billion yuan. The company's core traditional publishing, distribution, and teaching materials businesses have maintained stable performance, highlighting their role as the "ballast stone" of the company. The decrease in year-on-year operating income in the first half of the year was mainly due to the proactive optimization of the revenue structure and further reduction of trading scale. The increase in net profit was primarily driven by growth in the publishing and distribution business and investment income. Overall, publishing and distribution costs remained stable in the first half of the year.
In recent years, Chinese Media has implemented incentive mechanisms and carried out reforms through three institutional structures: divisional, project-based, and studio-based mechanisms. These reforms have effectively motivated employees and supported the company's significant development. As of June 30th, the company has established 39 "three-institution" structures, with six new demonstration projects and two pilot projects identified in the first half of the year. Additionally, four new projects are planned to be included in the pilot project scope, further demonstrating their leading role. Some projects within the "three-institution" framework have achieved positive results in content production, distribution, new media marketing, and other areas, contributing to authorization, mechanism construction, talent development, and "dual benefits" (economic and social) aspects.
The company actively participates in and continuously optimizes public cultural services throughout Jiangxi province. Its numerous Xinhua Bookstores in cities and counties have established strong channel control and brand aggregation. The company focuses on transforming key municipal cultural complexes, implementing the "market efficiency doubling plan," and integrating various formats such as book sales, catering, and children's libraries to create an integrated cultural service platform. Through the construction of innovative and fashionable reading spaces with unique features, these complexes have become local cultural landmarks, venues for cultural exchanges, centers for citizens' spiritual lives, and hubs for the dissemination of culture in the new era. Leveraging a total area of 211,000 square meters of stores and a modern 210,000-square-meter publishing logistics port throughout Jiangxi province, the company bridges the gap in diversified cultural services.
Chinese Media strives to increase the proportion and contribution of new media and new business formats. In particular, Zhiming Xingtong continues to focus on product innovation, in-house game development, distribution agency, and investment and acquisition, while intensifying efforts in product research and development and promotion. Through mature overseas distribution channels, it explores the value of high-quality games, forming a refined industrial chain and building core competitiveness. China's first "Great China Treasure Hunt" themed restaurant in collaboration with KFC was completed in Rongchuang, Hefei, Anhui, breaking the boundaries between children's book IPs and the catering industry and achieving cross-industry integration and operation of the "Great China Treasure Hunt" IP. The "Ganpo Book Cloud" database project has completed the development of a mobile platform based on the web platform and has released and launched the "Ganpo Book Cloud" app and mini-program for trial use, enabling mobile reading functionality. The Tengwangge Jiangyou Culture Digital Experience Hall officially opened to the public on June 1, 2023, showcasing the charm of Jiangyou culture with its emphasis on digitalization.