In this article, we introduce Xinhua Winshare Publishing and Media (新华文轩出版传媒)(HKEX: 0811), a publishing company owned by the Sichuan provincial government which monopolizes the supply of textbooks in Sichuan province but also publishes and distributes other forms of books and media.
Key Characteristics
Steadily growing revenue and profit with relatively stable profit margins
Relatively stable ROE with consistent and growing EPS and dividend payout
Limited business growth potential subject to the risk of a declining population
May be suitable for investors seeking a relatively stable dividend income from a company with sound fundamentals
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Corporate History
The predecessor of Xinhua Winshare can be traced to Xinhua Bookstore (新华书店), a bookstore founded in 1937 by the Chinese Communist Party (CCP) in the Party's headquarter city of Yan'an (延安). Xinhua Bookstore subsequently became the first and only nation-wide bookstore chain following the founding of the People's Republic of China in 1949. After China's opening-up and reform period during the late 1970s to 1980s, Xinhua Bookstore was restructured and broken down from a centrally-controlled business to a number of smaller provincial-level businesses operated by local state-owned companies.
Sichuan Xinhua Bookstore (四川新华书店) was established in 2000 and renamed Sichuan Xinhua Publishing Group (四川新华出版集团) in 2003. Sichuan Xinhua Winshare Chains (新华文轩连锁) was established as a subsidiary of the Group in 2005 and subsequently went public on the Hong Kong Stock Exchange (HKEX: 0811) in 2007. In 2010, Sichuan Xinhua Winshare Chains acquired 15 publishing companies owned by Sichuan Publishing Group (四川出版集团), a state-owned publishing company, and was renamed Xinhua Winshare Publishing and Media (新华文轩出版传媒). Xinhua Winshare went public on the Shanghai Stock Exchange (SHA: 601811) in 2016.
Business Summary
Xinhua Winshare's primary businesses include: the publication and distribution of textbooks, the provision of other education-related products and services to primary and secondary schools, the publication of newspapers, journals, and digital media products, the provision of printing services and supply of printing materials, and the retailing, distribution, and online sales of publications.
The company is the sole supplier of primary and secondary school textbooks in Sichuan province.
Financial Highlights