The business scope increases the sports content, further clarifies the double main business development strategy. According to the requirements of implementing the strategy of comprehensive utilization of water resources and promoting the development of sports culture in the annual report, the company decided to add sports in its business scope, revise the corresponding company's business scope and amend the company's articles of association. The added content includes: sports project organization service, sports project comprehensive development, sports venue service, cultural tourism activity organization and planning, tourism management service, tourism project development and so on. We believe that the company's move further defines the comprehensive utilization of water resources and the two-wheel drive development strategy of the sports and cultural industry. Maintain the company's 2016-2018 EPS forecast of 0.01max 0.03max 0.05RMB, maintain the target price of 20.3RMB, "overweight" rating.
The direction of transformation is clear, or it may become a dark horse in sports. In recent years, the company is firmly committed to the pace of transformation, through foreign investment into shares, the establishment of industrial funds, organizational reform and other ways to continue to carry out industrial layout, to promote business transformation. Recently, by sponsoring the fighting event "Boxing Star era" and other ways to extend to the cultural and sports industry, there is the possibility of deep intervention in the future, which is in line with the company's business plan to create sports and cultural IP events. In the context of the introduction of industrial capital in non-public offerings (approved documents have been obtained), the future transformation of the company may exceed market expectations.
The fight event "Boxing Star Age" sponsored by the company will fight again. The boxing star era, a fighting event sponsored by the company, will fight again in Shenzhen on July 2, 2016. We believe that the Boxing Star era's first foray into a first-tier city will effectively enhance the brand influence of the event. Although the audience of fighting sports is smaller than that of football, basketball and other sports, the users are more sticky and have higher ability to pay. As the only combat-related target in the market, the company is scarce and has a broad space for future development.
Catalyst: completion of non-public offering; landing of transformation project.
Core risks: a further decline in traditional business; the transformation is not as fast as expected.