Main points of investment:
Event: the company announces its 2017 semi-annual report.
During the transition period of sports, revenue and profit will be affected. During the reporting period, the company realized total operating income of 996 million yuan, a decrease of 23.36% over the same period last year; net profit attributable to shareholders of listed companies was 15 million yuan, down 37.18% from the same period last year; and diluted earnings per share decreased by 58.36% compared with the same period last year. Of this total, sports operation revenue was 28 million yuan, up 1002.69% from the same period last year; real estate sales revenue was 23 million yuan, down 92.05% from the same period last year; energy and trade sales revenue was 909 million yuan, down 7.21% from the same period last year; and real estate rental income was 35 million yuan, up 31.90% from the same period last year.
The debt structure is stable and the net interest rate is still low. At the end of the reporting period, the company's gross profit margin was 6.27%, down 8.12 percentage points from the same period last year; the net profit margin was 1.46%, down 2.16 percentage points from the same period last year. The company's asset-liability ratio excluding pre-sale accounts was 38.41%, down 0.17 percentage points from the same period last year, and the net debt ratio was 27.32%, an increase of 1.57 percentage points over the same period last year.
Focusing on "space + content", the layout of sports is becoming more and more mature. In the first half of the year, three characteristic towns of Tonglu International Football Town, Xiaoshan "Luzheng Puyang" Town and Chengdu Gexianyun Leisure Town were signed. and three major complex projects: Chongqing Panlong Sports Park, Jiaxing Xiuhu City Sports Service complex, Hangzhou Xianlin Port City Sports complex. The company has operated two sports complexes, three are under construction, and 14 fitness clubs have been operated or contracted. In addition, the company actively operates existing events IP and obtains high-quality IP, including 2017CBSA Pengzhou American 9-ball International Open, National Family Fitness Challenge, Lishui half Marathon and so on.
Investment advice: do not rating temporarily. Based on the existing share capital, the company is expected to earn 0.02 yuan per share in 2017 and 0.03 yuan in 2018. The company's closing price on August 25, 2017 is 6.79 yuan per share, corresponding to 339.50 times PE in 2017 and 226.33 times PE in 2018. The company's personnel, capital and business are in place, and the strategic layout is becoming more and more clear. Closely around the three major IP (football, basketball, ice and snow) + sports towns, the layout of the industrial chain upstream and downstream, to achieve the landing of sports IP. We are optimistic about the company's medium-and long-term development trend and the company's leading position in the sports industry. In view of the fact that the company is in the early stage of transformation, the profit of the sports industry is still thin, so it will not be rated for the time being.
Risk hint: there is uncertainty in team acquisitions; sports towns are not as good as expected.