Event: On May 24, 2023, the company announced the signing of a “Strategic Cooperation Framework Agreement” with Baidu Netcom. The company will strategically cooperate with Baidu Netcom to jointly develop the multi-modal sports model using artificial intelligence technology and build and develop application scenarios of artificial intelligence technology in the three fields of sporting events, sports health, and physical education.
Baidu Network News is a company owned by Baidu. Strong Alliance is expected to achieve cross-field synergies between artificial intelligence and sports competition. Baidu Netcom has a number of patents related to artificial intelligence, which can continuously help Baidu's “One Word of Mind” knowledge enhancement big language model continue to be iterated. As a leading auto sports operator service provider in China, Lisheng Sports is gradually promoting the establishment of a leading domestic sports data and big health service platform. In the future, the two sides are expected to make full use of their advantages in their respective fields and achieve collaborative development in the fields of artificial intelligence and sports competition.
The company actively embraces AIGC technology to accelerate the deployment of “artificial intelligence+sports” projects. The company announced a fixed increase plan on April 24, 2023. It plans to raise no more than 600 million yuan to build an artificial intelligence digital sports project in Hainan and the Hainan New Energy Vehicle Experience Center international racetrack project, as well as supplementary working capital. Previously, through participation in Yuedong World, the company laid out digital sports business around “national fitness” and “physical education”, and through AI physical education classes, AI physical tests, and campus event services. The current cooperation between the company and Baidu Netcom will join the industry's high-quality resources to promote the company's “artificial intelligence digital sports” project, and the company's digital sports business is expected to develop rapidly.
The company's main business is basically stable, and the company's development will continue to be promoted through three dimensions in the future. 2023Q1, the company's overseas competition business took the lead in recovering and developing, contributing profits to the company's stability. The company has now achieved the layout of the entire auto sports industry chain. In the future, it will continue to promote the implementation of the company's sports industry national strategy and simultaneously deepen the company's business development from the three dimensions of “space”, “IP” and “digitalization”.
Profit forecasts and investment recommendations. The company's net profit from 2023-2025 is estimated to be 0.8, 110, and 170 million yuan respectively. The company was given 67 times PE in 2023, corresponding to the target price of 32.16 yuan, and upgraded to the “buy” rating.
Risk warning: The risk that the industry will be affected by macroeconomic fluctuations, the risk of increased market competition, the risk that promotion rights for sporting events cannot be extended or that commercial royalties will rise sharply, and that the progress of fundraising projects falls short of expectations.