Rating: BUY* (Initiation)
Target price: RMB13.00
Share price (18 Aug): RMB11.21
Market Cap (RMBm): 10,756.1
Up/downside: 16.0%
We initiate coverage with a BUY call and a target price of RMB13. As the only Chinese listed company with full coverage of the sports supply chain, CSI owns rich resources along with a wide-spectrum ecosystem. With its asset restructure completed, the lottery business has become a new growth driver, allowing the company to maximize policy advantages. We expect CSI to milk the industry potential for its own sustainable growth.
Backed by General Administration of Sport; full coverage of sports supply chain
China Sports Industry (CSI) was the first listed company to focus on sports and its business covers the entire sports supply chain. The main lines are events, sports communication, education and training, sports lottery, an offline sports platform, an online digital technology platform, and brand operation, capital operation, standard certification, research and consulting, as well as sports real estate. 2020 revenue: real estate accounted for about 38%, its lottery segment about 38%, and event management and operations about 9%.
Industry growth and optimization: building out services and platforms
Market demand and the industry scale have increased year after year, supported by policies, so development potential is high. The supply chain includes event resources in the upstream market, media communications in the midstream, and sports derivatives downstream. Currently, the sports derivative segment has the lion share of total industry value. Guided by policies and a growing diversity of consumption forms, the market share of sports services will continue, in our view.
CSI’s businesses cover the core value chain of the industry
Its business lines include: event resources (focusing on leading IP development and operations); sports communication (one-stop intermediary services); education and training (nurtures talents) and a fitness platform (for the health of all consumers). In the context of national fitness and the Covid-19 pandemic, China is prioritizing the buildout of a sports services complex. CSI’s experience from its Ningbo project will help it to roll out nationwide promotions and coverage. National policies are also helping to drive the construction of sports towns, along with an online digital technology platform to cater to smart sports.
Lottery business a new profit driver with overall financial structure stability
CSI’s key acquisitions of China Sports Lottery Technology and China Sports Color Printing in June 2020 has boosted its lottery business. Subsidiary IntraDak’s business is lottery terminals sales and maintenance. Sports Lottery Technology added R&D and core technology system operations and maintenance, while Sports Color Printing handles instant sports lottery services, thermal tickets supply and product color design. After the acquisitions, CSI’s lottery business revenue rose from RMB57.81m in 2019 to RMB749.72m currently, while gross profit margin lifted 31.46% to 59%, the highest level over the past eight years. Except for a decline due to M&A in 2020, the company's asset-liability ratio has been reasonable and stable, with good cash flow.
Valuation and risks
As the only Chinese listed company with full coverage of the sports supply chain, CSI owns rich resources and a full-spectrum business ecosystem. With its asset restructure completed, the lottery business has become a new growth driver and would allow the company to maximize its policy advantages. We expect CSI to milk the industry potential for its own sustainable growth. Based on the launches of sports events over the past two years, we expect net profit of RMB150m/240m/270m in 2021/22/23E; with a market cap of RMB12.4bn in 2022E, corresponding to our target price of RMB13. We initiate coverage with a BUY rating. Risks include: pandemic impact risks; policy risks; event operation risks; business risks; and new projects falling short of expectations.
* Note: The investment ratings given by TFI Asset Management Limited may have taken reference to the research report previously issued by other entities of the TF Group. For details, please contact us at research_tfi@tfisec.com.
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評級:買入*(初始級)
目標價格:人民幣 13.00 元
股價(8 月 18 日):人民幣 11.21 元
市值(人民幣百萬元):10,756.1
向上/向下:16.0%
我們以買入看漲期權和目標價格爲 RMB13 來啓動承保範圍。作爲唯一一家全面覆蓋體育供應鏈的中國上市公司,CSI擁有豐富的資源和廣譜的生態系統。隨着資產重組的完成,彩票業務已成爲新的增長動力,使公司能夠最大限度地發揮政策優勢。我們預計 CSI 將挖掘行業潛力,實現自身的可持續增長。
由體育總局支持;全面覆蓋體育供應鏈
中國體育產業(CSI)是第一家專注於體育的上市公司,其業務涵蓋整個體育供應鏈。主線是賽事、體育傳播、教育培訓、體育彩票、線下體育平臺、線上數字技術平臺以及品牌運營、資本運營、標準認證、研究與諮詢以及體育地產。2020年收入:房地產約佔38%,其彩票細分市場約佔38%,賽事管理和運營約9%。
行業增長和優化:建立服務和平臺
在政策的支持下,市場需求和行業規模逐年增加,因此發展潛力很大。供應鏈包括上游市場的賽事資源、中游的媒體傳播和下游的體育衍生品。目前,體育衍生品細分市場在行業總價值中佔有最大份額。我們認爲,在政策和日益多樣化的消費形式指導下,體育服務的市場份額將繼續保持下去。
CSI 的業務涵蓋了該行業的核心價值鏈
其業務領域包括:賽事資源(專注於領先的知識產權開發和運營);體育傳播(一站式中介服務);教育和培訓(培育人才)和健身平臺(爲所有消費者的健康服務)。在全民健身和Covid-19大流行的背景下,中國將建設體育服務綜合體列爲優先事項。CSI在寧波項目中的經驗將有助於其在全國範圍內推出促銷和報道。國家政策還有助於推動體育城鎮的建設,以及迎合智能體育需求的在線數字技術平臺。
彩票業務是整體財務結構穩定的新利潤驅動力
CSI在2020年6月對中國體育彩票科技和中國體育彩票印刷的主要收購促進了其彩票業務。子公司IntraDak的業務是彩票終端的銷售和維護。體育彩票科技增加了研發和核心技術的系統運營和維護,而體育彩票打印則負責即時體育彩票服務、熱彩票供應和產品色彩設計。收購後,CSI的彩票業務收入從2019年的人民幣5,781萬元增長到目前的7.4972億元人民幣,而毛利率增長了31.46%至59%,爲過去八年來的最高水平。除2020年併購導致的下降外,該公司的資產負債比率一直合理穩定,現金流良好。
估值和風險
作爲唯一一家全面覆蓋體育供應鏈的中國上市公司,CSI擁有豐富的資源和全方位的商業生態系統。隨着資產重組的完成,彩票業務已成爲新的增長動力,並將使該公司能夠最大限度地發揮其政策優勢。我們預計 CSI 將挖掘行業潛力,實現自身的可持續增長。根據過去兩年體育賽事的啓動情況,我們預計2021/22/23E的淨利潤爲1.5億元/2.40億元人民幣;2022E的市值爲124億元人民幣,相當於我們的 RMB13 目標價格。我們以買入評級開始承保。風險包括:疫情影響風險;政策風險;活動運營風險;業務風險;以及未達到預期的新項目。
* 注意:TFI資產管理有限公司給出的投資評級可能參考了TF集團其他實體先前發佈的研究報告。欲瞭解詳情,請通過 research_tfi@tfisec.com 聯繫我們。
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