港股研报

Wisdom Holdings (01661.HK) The wind rises

时间:2014-10-26 09:09  作者:新乡股票网  来源:www.xxkaihu.com  查看:  
内容摘要:Governments RMB5tn target translates into 25%+ CAGR for 2013-25. On Oct 20, 2014, the State Council published detailed policies supporting thesports industry and set a target of RMB5trillion output of the sports industry by2025. Given that...
    Government’s RMB5tn target translates into 25%+ CAGR for 2013-25.
    On Oct 20, 2014, the State Council published detailed policies supporting thesports industry and set a target of RMB5trillion output of the sports industry by2025. Given that current sports industry output is only ~RMB300bn, the targetwould translate into an industry CAGR of ~26% for 2013-25. In addition, qualifiedhigh-tech companies in the sports industry would also enjoy a lower tax rate of15%. As a leading sports event operating company, Wisdom is well positioned tobenefit from this structural long-term growth.
    Rapidly seizing the market through more cooperation agreements.
    Wisdom signed cooperation agreements with local governments of another fourregions (Anhui, Liaoning, Jiangsu and Chongqing), which involves >300 sportsevents per year until 2018. Together with the existing cooperation agreements,Wisdom has expanded its geographical coverage to 12 regions involving >600 masspublic sports events in total. They are expected to allow Wisdom to seephenomenal growth driven by larger number of sports events, higher sponsorshipfees and more advertising revenue.
    Higher earnings visibility backed by more confirmed events.
    We believe earnings visibility of Wisdom has been improved significantly.Following the success of the 1st Four Season Run held in Sept 14 (estimatedrevenue ~RMB10mn), the company has scheduled this event to other cities in thecoming years (we assume 4 in FY15 and 6 in FY16). In addition, Wisdom hassecured Intime (1833.HK, NR) as the title sponsor of Hangzhou Marathon for 3years starting 2014. Meanwhile, the new program DaLeJia (大乐驾), which wouldbe broadcasted on Sichuan Satellite TV every Friday night since Oct 24, is expectedto boost program & advertising revenue in FY15.
    Raise TP to HK$6.62, maintain BUY.
    We revise up our earnings forecast by 14% to RMB374mn in FY15 and 15% toRMB486mn in FY16 to reflect higher earnings from the increased number of sportsevents in the pipeline and higher profit visibility. We upgrade our target price by 19%to HK$6.62 based on the sum of the parts (SOTP) valuation methodology. At our TP,the stock would trade at PE of 22.3x in FY15 or 0.9x PEG for FY14-16.


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