Leading downstream live NationQ3 concert schedule grows, accelerating expansion of overseas markets

The global concert market is in high demand, and the world's leading concert drivers, represented by Live Nation, continue to grow. 24Q3 Live Nation concert revenue was $14.447 billion, up 4.02% year over year. Among them, the pre-sale performance of concert tickets for popular artists (such as Coldplay, Madonna, and Bad Bunny) was particularly impressive. 2024Q3's concert schedule reached 0.0128 million, a year-on-year increase of 6%, and continued growth under a high base. According to the company's announcement, LiveNation is expected to build more than 14 new stadiums in 2025 (including stadium renovation and new construction), and this move is estimated to increase the number of fans by about 8 million. Furthermore, emerging vacant markets such as Asia and Latin America may become new growth points for Live Nation. By the end of 2023, Live Nation had 373 venues (106 overseas venues), adding 35 new venues (including 6 overseas venues) compared to 338 venues (100 overseas venues) at the end of 2022. LiveNation plans to add 35 new large-scale venues in Latin America by 2029. These venues will provide 20 million fans each year, further accelerating the expansion of overseas markets.

Experiential consumerism is popular, and the concert industry is booming

Unlike traditional product consumption, music performances are scarce and highly social. 1) With the popularity of digital platforms (Spotify, YouTube, TikTok), it is easier for global consumers to use platforms to access music and artists, promote consumers to discover experiences online, and achieve offline transformation.

2) Changes in consumer behavior. According to the Mastercard Economic Research Institute, consumer spending is shifting from physical goods to experiential consumption (entertainment and travel). According to Pollstar statistics, from November 2023 to August 2024, the total revenue of the world's top 100 concert tours reached a record high of 5.7 billion US dollars, up 14.1% year over year; ticket sales increased 2.6%, and the average ticket price increased 11.2% to 126.55 US dollars. The increase in ticket prices is a strong support for the recovery in consumer demand for high-quality offline entertainment.

Investment advice:

Haoyang Co., Ltd. leads the world in technology and is a well-known European and American brand with scarce resources. Arden is tied to high-quality ODM customers. The new production capacity is expected to contribute to the increase, and long-term growth can be expected. We expect Haoyang Co., Ltd.'s 2024-2026 operating income to be 1.277, 1.482, and 1.712 billion yuan, up -2.15%, 16.05% year-on-year, and net profit to mother of 0.346, 0.435, 0.5 billion yuan, up -5.52%, 25.60%, 15.03% year-on-year, corresponding to PE valuations of 17.3x, 13.8x, 12.0x, and a target price of 60.17 yuan to maintain “buy-A” investment ratings.

Risk warning: Market demand falls short of expectations, the impact of the Red Sea incident exceeds expectations, the increase in market share falls short of expectations, raw material prices fluctuate, business development falls short of expectations, and the risk of major shareholders reducing their holdings.