Company Overview: A regional exhibition enterprise under the Shanghai State-owned Assets Administration Commission, the entire industry chain layout. ① Main business:
In 2020, the assets were restructured into the Exhibition Group, and the main business changed from foreign trade to exhibition. In the first half of 2023, the company's exhibition organization/ exhibition support/ exhibition hall operation/ event service/ other business revenue accounted for 55.8%/13.8%/9.4%/6.6%/14.5% respectively, accounting for more than 85% of the total exhibition business. ② Historical revenue and profit volume:
Listed companies achieved revenue/net profit of 773/115 million yuan in 2022, the core subsidiary Exhibition Group 2023H1 achieved revenue/net profit to mother of 57/ 80 million yuan, and revenue/net profit to mother of 1,76/140 million yuan in 2019.
Competitive advantage: The layout of the entire industry chain, leading industry perspective; backed by the Shanghai State-owned Assets Administration Commission, with excellent stock resources.
① Full industry chain layout: The company's exhibition business involves upstream venue management, from midstream exhibition organization, event planning and advertising construction, to downstream exhibition transportation, etc., covering all kinds of exhibition service projects. The business links are mutually empowering, and the cost structure is superior to that of a single link; in addition, we believe that the operation of the pavilion helps the company lead the market to perceive industry segments, and provides a forward-looking perspective on mergers and acquisitions, industry selection and promotion. ② Relying on Shanghai's economic development and location advantages: The company is an exhibition enterprise under the Shanghai State-owned Assets Administration Commission and has the right to operate the Shanghai World Expo Exhibition Hall. The World Expo Exhibition Hall has a capacity of 80,000 square meters, ranking third in Shanghai, after the Shanghai National Convention and Exhibition Center and the New International Expo Center. It hosts the Shanghai Marathon series of brand events, including the Shanghai International Marathon, the Shanghai Open, and the Shanghai Yacht Open. Among them, the Shanghai International Marathon was rated platinum by the IAAF in 2020, the first platinum event in China.
Current highlights: Combining endogenous and external extensions, expanding the stock exhibition area, and new events+mergers and acquisitions bringing incremental company highlights. ① Regional expansion of existing exhibitions: In 2023, the company accelerated the “Exhibition China” strategy, focusing on national strategic development regions such as the Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area, and breaking through regional barriers in the exhibition industry. In the first half of 2023, the company successfully hosted the Beijing International Printing Exhibition, the Chengdu Industrial Fair, the Tianjin World Intelligence Conference Intelligent Technology Exhibition, Guangdong Robotics and Intelligent Equipment Exhibition, and the South China Industrial Fair. ② New event: It is expected that the first Shanghai Open Sailing Tournament in the spring of 2024 will be held on the Huangpu River. In addition to “getting on the horse” and “getting on the boat,” Shanghai's “city card” will be added. ③ Mergers and acquisitions: In 2022, it acquired 67% of the shares of Dongguan Huizhixie Exhibition Co., Ltd., and formed a collaboration with the company's stock business; on September 26, 2023, Huizhan Fund plans to acquire 40.7% of Shanghai Tabus Exhibition Co., Ltd.'s shares and enter the booming pet circuit.
Profit forecast: The company's operating income is expected to be 1,568/17.84/2.008 billion yuan in 2023-2025; net profit attributable to owners of the parent company will reach 2.81/3.05/337 million yuan, giving Lan Sheng Co., Ltd. 20x PE in 2024, corresponding to a reasonable market value of 6.1 billion yuan and a target price of 11.55 yuan. For the first time, coverage gives it a “superior to the market” rating.
Risk warning. The macroeconomic downturn exceeded expectations; the willingness of enterprises to expand weakened; offsite expansion fell short of expectations; the dividend ratio of financial assets held changed