[investment points]
The company is a leading automobile sports operation service provider in China, with a comprehensive layout of national fitness digital service. The traditional main business is event operation and service. Since 2021, he has successively "hired the former general manager of BABA Sports COO as the general manager of the company" and "participated in the star sports fitness APP company to move the world", marking the opening of the national fitness business. The company will take "Yueyue Circle" as the carrier, through the "sports points exchange incentive model" to build a digital platform for national fitness-"Sports Bank". We believe that the company's future growth mainly comes from three aspects: 1) epidemic control and gradual recovery of traditional business such as event operation in 2022; 2) fund-raising projects such as "Saika Alliance chain venues" have been put into operation; 3) new national fitness businesses such as "Sports Bank" have gradually begun to be commercialized.
Sports industry is the key support direction of the country, and the value of social economy and quality education is prominent. The status and role of the sports industry in the national economy has improved significantly. In 2015, the total scale of the national sports industry jumped from 1.71 trillion yuan to 2.95 trillion yuan in 2019, with an average annual growth rate of 14.6 percent.
During the period of the 14th five-year Plan, the development of sports in China is still in an important period of strategic opportunity. National fitness helps to reduce the burden of social (medical) insurance. Studies have shown that if you invest 1 yuan more in sports and fitness, you can reduce the investment of 7-8 yuan in medical care. In the Sports Development Plan of the 14th five-year Plan, the General Administration of Sports mentioned that "actively promote the concentration of sports resources and factors of production to high-quality enterprises, and strive to cultivate 100 sports enterprises with operating income of more than 10 billion yuan, high brand awareness, strong international competitiveness and strong industry leadership." Sports enterprises have ushered in a golden period of development.
The traditional main business is obviously affected by the epidemic in the short term, so we will increase the size of "competition + entertainment" and actively distribute the C-end market. COVID-19 's epidemic affected offline events, with both income and profit margins under pressure, returning to normal levels of 50% and 60% in 2021. Affected by the global COVID-19 epidemic, the company's international races were suspended in the last three quarters of 2020, and the domestic RV Championships did not begin until August 2020, but the race scale and audience size were greatly limited. The company's existing business is mainly focused on the B-end customer market, and the customers are mainly automobile manufacturers or enterprises that have a strong relationship with the automobile industry. In recent years, the company conforms to the trend of civilian and popular development of automobile sports in our country, through exploring to create a new category of "competitive + entertainment" motor sports events, opening kart venues and other ways to actively target the C-end customer market layout.
"Yueyun" is an important part of building a new business carrier, and sports banks integrate data with users. "Sports Bank" is the core of the company's national fitness business. Yu, the general manager of the company, is always the initiator of the concept of "sports bank" and was first put into practice in the BABA system, which is widely recognized by all sectors of the community. "Sports Bank" solves two major pain points of sports fitness APP: user growth and commercialization. In terms of user growth, the company adopts the customer acquisition model of "2G/2B" to avoid the buying model of heavy investment, and the "countryside" surrounds the city, starting from the young and the middle-aged and the elderly. In terms of commercialization, for the B side, it provides sports big data, sports events and training IP and AI physical education courses for the government, schools and other institutions; for the C side, the points exchange is essentially an e-commerce diversion business based on CPS; the future cash model such as "sports insurance" is also very much to look forward to.
[investment advice]
We focus on the future development of the company from two aspects, namely, the recovery of traditional business and the "sports bank".
The business is growing rapidly. Based on the traditional motor racing business, we estimate that the company's revenue in 2021-2023 will be 2.75 Universe 421 Universe 615 million, the net profit of homing mother will be 0.05 Placement 0.33 Plus 0.65 million, and the earnings per share in 2021-2023 will be 0.41 yuan per share, respectively, and PE will be cautious and bullish, giving it a "overweight" rating.
[risk Tip]
The recovery of traditional business is not as expected.
New business development falls short of expectations
The ban on restricted shares is lifted