The restructuring was completed and focused on the main exhibition business, with outstanding resource endowments from a state-owned background. In October 2020, Lansheng Co., Ltd. completed asset restructuring and joined the Convention and Exhibition Group to focus on the main exhibition business. The controlling shareholder of the company is Shanghai Lansheng Group, which directly holds 41.14% of the shares. The indirect controlling shareholder is Donghao Lansheng Group, which directly + and indirectly controls 62.78% of Lansheng's shares. The actual controller is the Shanghai State-owned Assets Administration Commission. Shareholder resources help the company obtain exhibition resources and business collaboration.
The entire exhibition business industry chain is laid out, and the core exhibition brand market competitiveness is strong. The business of Lansheng Co., Ltd. covers the four major sectors of exhibition organization, exhibition hall operation, event activities and exhibition support services. It has resources for the entire exhibition industry chain, such as exhibitions, pavilions, contests, meetings, advertising, construction, and transportation. The company hosts nearly 30 exhibitions a year, totaling nearly 1 million square meters of exhibition scale, including 4 UFI certified international exhibitions, and 3 subsidiaries are UFI members. The company has the right to operate the World Expo Exhibition Hall, the third largest exhibition hall in Shanghai, hosts the “Platinum Mark” event, the Shanghai Marathon and related series of brand events, and has a high level of influence and popularity in the industry.
Strong recovery after the epidemic, cultivating independent exhibition brands to achieve endogenous growth. Since March 2023, the company's trade fair, exhibition, competition and pavilion businesses have fully recovered. With “Exhibition China” and “Digital Exhibition” as the two major development strategies, the company has continuously strengthened the market competitiveness of existing exhibition brands and achieved remote replication of mature brands. The company cultivates independent exhibition brands with artificial intelligence, intelligent manufacturing, sports events, and health care as the main directions. At the same time, it also focuses on mergers and acquisitions opportunities for high-quality external exhibition brands, realizes endogenous development and two-wheel drive of extended mergers and acquisitions, further optimizes the industrial chain layout, expands the business model, and continuously enhances the core competitiveness of the exhibition business. The company's monetary capital plus financial assets exceeded 4 billion yuan, providing sufficient financial protection for extended mergers and acquisitions.
Investment suggestions: The company's overall revenue is expected to reach 1,629 million yuan/1,925 million yuan/2.192 billion yuan respectively in 2023-2025, and achieve net profit of 300 million yuan, 303 million yuan and 354 million yuan, with year-on-year growth rates of 162%, 1% and 16.8%. Among them, in 2023, Wentai Factory received 56.17 million yuan in non-current asset disposal profit and loss due to relocation funds and disposal of real estate by subsidiaries, and Huaduo Fund's investment distribution received investment income of 32.36 million yuan, bringing a high performance base. The 2022-2024 EPS is expected to be 0.57 yuan/share, 0.57 yuan/share, and 0.67 yuan/share, respectively, and the 2022-2024 PE will be 20X, 20X, and 17X, respectively. We are optimistic about the continued and stable development of the company's exhibition business and expectations in terms of extended mergers and acquisitions, and gave it a “buy” rating.
Risk warning: There is a risk that macroeconomic growth will slow down and business demand will be affected; there is a risk that the epidemic will be repeated and the offline exhibition event business will be limited; there is a risk that market competition will increase and the influence of brand exhibitions will decline; there is a risk that extended mergers and acquisitions will fall short of expectations; there is a risk that the independent exhibition IP cultivation cycle will be too long, etc.