CITIC Securities: The publication market is expected to gradually warm up in the future with the strengthening of new product research and development and channel transformation.

According to the Zhongtai Securities research report, the revenue of the publishing industry in the first half of 2025 was 65.35 billion yuan, a year-on-year decrease of 8.1%; the net profit attributable to the mother was 8.2 billion yuan, a year-on-year increase of 14.5%. Revenue was under pressure due to stricter regulation in the educational subscription and weak recovery in general book consumption. However, with the implementation of tax incentives, the industry's profit margin is showing signs of recovery. State-owned publishing groups have seen some improvement in operations; local state-owned publishing groups have experienced slight fluctuations in operations, but profit margins in the first half of 2025 have improved significantly; performance of private publishing companies has been more polarized. We believe that the publishing market is expected to gradually improve in the future, driven by strengthening of new product research and development and channel transformation. Currently, the PE ratio of leading companies in the industry for 2025 is in the range of 12-15 times, with a significant safety margin. We recommend focusing on state-owned publishing companies with prominent advantages in specific content categories, clear dividend advantages, and significant marginal improvement.