Main points of investment
On April 10, 2017, CITS jointly announced that it would participate in the establishment of an equity investment management company and subscribe for sports industry M & A funds and foreign investment. According to the announcement, the company contributed 1.5 million yuan to participate in the establishment of Hubei Hongtai Travel Equity Investment Management Co., Ltd. Other subscribers are Hubei Hongtai Industrial Investment Fund Co., Ltd., and Shanghai Multi-Channel Equity Investment Management Co., Ltd., with a subscription ratio of 30% and 40% respectively. At the same time, with Hongtai Travel Management Company as the general partner and fund manager, we initiated the establishment of Hubei Hongtai CITS Sports Industry Investment M & A Fund (Limited Partnership), with a first-phase size of RMB 250 million. Among them, CITS contributed 23.5 million yuan as a limited partner, Hubei Hongtai contributed 76.5 million yuan, and Hongtai Thailand Travel Management Company contributed 2.5 million yuan, raising 147.5 million yuan.
The fund focuses on building a cultural and sports platform. The fund will focus on optimizing the integration of the culture and sports industry chain and the strategic layout of the industry, and work with listed companies to create an upstream and downstream industrial platform in the field of culture and sports. Its establishment will improve the efficiency of the company's use of funds and the level of capital income, enhance the company's investment profitability with the help of the resource advantages of professional institutions, broaden investment channels, and promote the company's industrial integration, which is in line with the needs of safeguarding the company's development interests and the principle of maximizing the interests of shareholders.
Hubei Hongtai is backed by the Hubei Provincial SASAC. Relying on the shareholder background and financial advantages of Hubei provincial state-owned capital operation platform, Hubei Hongtai will support the development of CITS United and its sports business, and provide omni-directional financial support in the industrial life cycle to maintain and increase the value of state-owned assets. bring the maximum return on investment for investors.
Profit forecast and rating: the company always adheres to the development strategy of outdoor sports and entertainment and closely focuses on the industrial development of "sports +". The establishment of the fund will help the company build an upstream and downstream industrial platform in the field of culture and sports. At the same time, the co-sponsors of Hubei Hongtai rely on the Hubei Provincial SASAC, with background and financial advantages, and the prospect of cooperation is promising. It is estimated that from 2017 to 2019, the company's EPS will be 0.04, 0.06, 0.09 yuan, respectively, maintaining the "overweight" rating.
Risk hint: the operation of sports industry funds is not as good as expected, and the operation of investment projects is not as expected.
