Incidents:

From January to September 2022, the company achieved revenue of about 832 million yuan; realized net profit of about 42.58 million yuan; basic earnings per share - 0.0444 yuan.

Comment:

Revenue grew steadily, and performance improved significantly from month to month

The company's revenue growth rate increased month-on-month during the reporting period. At the same time, net profit and net profit losses improved significantly month-on-month, mainly due to the increase in related revenue driven by the hosting of the Beijing Winter Olympics and the rapid expansion of the lottery business this year. The company's operations generally have obvious seasonal factors. In the context of the gradual resumption of operation of some offline events, it is expected that the company's overall performance will continue to improve in the fourth quarter of this year.

In terms of three fees, the company's three fees in the third quarter were basically the same compared to half a year; net interest rate and gross margin improved significantly from month to month.

Profit Forecasts and Investment Ratings

Overall, the company's operations have maintained a steady trend of development, relative competitiveness within the industry has been steadily increasing, and the medium- to long-term impact of the fluctuations of the epidemic on the company's business has begun to gradually ease. We continue to be optimistic about the company's continued layout and overall competitiveness in the sports industry, giving the company an investment rating of “increasing holdings”. The company's EPS for 2022-2024 is expected to be 0.07, 0.10, and 0.13 yuan/share, respectively.

Risk warning

Industrial policy risks, business development falling short of expectations, major changes in operations, continued downturn in the real estate industry, and risk of fluctuations in the epidemic.