After years of industrial transformation and layout, the company has further extended to the cultural and sports industry by sponsoring the fighting event "Boxing Star Age" and is expected to build IP events in the future.
Main points of investment:
Maintain the target price of 20.3 yuan, "increase" rating. 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. As the traditional business was lower than expected, the EPS in 2016-2018 was adjusted to 0.01yuan (- 0.02yuan) / 0.03yuan (- 0.03yuan) / 0.05yuan. According to the company's lake value and the upward flexibility of the valuation of the culture and sports industry, the target price was maintained at 20.3yuan, and the "overweight" rating was maintained.
After the completion of the non-public offering, the intensity of the transformation may exceed market expectations. The market believes that the transformation business of the company's layout in recent years is relatively scattered, and it has not contributed to the company's performance, so there is great uncertainty about whether the transformation can be successful. We believe that through the continuous layout of emerging industries in recent years, the company has formed a more profound understanding and understanding of it, in the context of the introduction of industrial capital in non-public offerings, the company's future transformation may exceed market expectations.
The whole title fight event "Boxing Star Age" grabs scarce resources. The company recently named the fighting event "Boxing Star Age", which is further extended to the cultural and sports industry. The market believes that the fighting movement is relatively minority, the market space is limited, and the company is currently only a title sponsor, the level of cooperation is relatively shallow. We believe that the company's annual report business plan clearly creates sports and cultural IP events, and participates in the investment and operation management of sports and cultural projects. We judge that the company does not rule out the possibility of deep involvement in the future. 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. The financial data and valuation levels of foreign mature fighting brands and domestic leading brands fully confirm this feature.
Catalyst: approval for non-public offering; landing of transformation projects.
Core risks: a further decline in traditional business; the transformation is not as fast as expected.