Xinhua News Agency, Beijing, March 27 (reporter Ding Feng) as the only listed company controlled by the State General Administration of Sports, China Sports Group industry recently announced its financial report for 2018. The company achieved operating income of about 1.45 billion yuan, an increase of 33 percent year-on-year; net profit attributable to shareholders of listed companies was 83.91 million yuan, an increase of 44% year-on-year; Net profit after deduction was 82.12 million yuan, an increase of 46% year-on-year; Earnings per share was 0.0994 yuan, A year-on-year increase of 44.26 percent. Both revenue and net profit reached a new high in nearly four years. Since this year, China Sports Group industry share price has risen nearly 50%.
The rapid expansion of the sports + model business boosts performance growth
The annual report shows that the growth trend of various main businesses in China Sports Group industry is obvious, and the key indicator ROE (return on net assets) is also steadily improving, it was 3.6 percent in 2017 and 4.9 percent in 2018. Although real estate-related businesses account for more than 50% of the main revenue, sports business presents many bright spots, achieving revenue of 0.56 billion yuan, an increase of 30.57 percent year-on-year; Gross profit margin is 28.84 percent, which is basically stable year-on-year. In the annual report, the company said that by deepening the layout of the sports industry chain, continuously obtaining high-end event resources, building a standardized operation system, achieving rapid business expansion and enhancing brand influence; At the same time, based on the long-term accumulation of international public relations resources, accelerate the business development of international sports service trade and provide international interfaces for the business extension and enrichment of the company’s industrial chain.
From the perspective of performance, the business model of “Sports + various industry resources”, which was built China Sports Group industry, has begun to release performance, and the pulling effect generated by the sports industry has gradually emerged, it has transformed from relatively independent sports services to cross-field and cross-industry platform services. Through the construction of service platforms, it has obvious effects on business linkage and resource integration.
During the reporting period, the performance of the sports brokerage business was eye-catching, which was 82.72 percent higher than that of the previous year, reaching 82.68 million yuan, and the gross profit was 33.95 percent. China Sports Group industry said that the company provided sports marketing and consulting services for well-known enterprise clients such as Yili, Bank of China, and China Unicom; And provided training Bureau of State Sports General Administration, national diving team, figure swimming team, short track speed skating team, the winter Center and other national teams, Wu Dajing, Liu Guoliang, Ye Shiwen and other well-known athletes provide market development agency services; Provide customers with the use scheme combined with contracted resources and the implementation and dissemination of matching activities.
The marathon event became a “profit cow” stadium development performance was flat
during the reporting period, the rapid operation of the company’s sports business was mainly caused by the sharp increase in the two major business revenues of event management and operation and brokerage, the revenue of the event business increased by year on year.
In the annual report, the most outstanding performance in the sports business sector is the Sino-Austrian road run. Currently, it is controlled by the Sino-Austrian sports industry, a wholly-owned subsidiary of China Sports Group Industry. Currently, it manages and operates the Beijing Marathon, wuhan Marathon, International Road Cycling Race around China and many other brand competitions with core competitiveness have significant IP value. The company signed a new Guangzhou Marathon in 2018, enriching the resources of high-quality competitions. Beijing Marathon is an IAAF Gold standard event certified by IAAF and filed by the International Marathon and highway running association (AIMS). This event has become the top domestic single event with the highest degree of marketization, the largest scale, the most representative and international influence of China Track and Field Association.
The annual report shows that Sino-Austrian road ran harvested a net profit of 43.165 million yuan in 2018, while the profit in the first half of 2018 China Sports Group industry was only 25.68 million yuan. Among them, Beijing Marathon, Wuhan Marathon and Guangzhou Marathon contributed most of the profits, especially Beijing Marathon, which attracted well-known enterprises at home and abroad to compete for sponsorship.
As the holding parent company holding 50% of China Olympic Road run, the main business of China Olympic sports industry is to develop stadiums and facilities, with a net profit of 22.815 million yuan in 2018. If the contribution of China-Austria road race to its profits and table is eliminated, the profit of the main business of China-Austria sports industry last year is only over 100 million, and the performance is flat.
The research and development investment of traditional sports lottery terminal sales is still insufficient
during the reporting period, China Sports Group industry said that it is promoting the major asset restructuring work and plans to combine two lottery companies under the State Sports General Administration, the relevant equity of the two certification companies is injected into the company. The main business of the target assets of China Sports color technology company and China Sports color printing company belongs to the upstream sector of sports lottery service, and the main business of China Sports certification company and Huaan certification company belongs to sports standardization service and certification testing related industries.
In the annual report, China Sports Group Industry admitted that the existing sports lottery business encountered difficulties, the traditional terminal sales market competition was increasingly fierce, and the company also continuously self-service terminals R & D investment in plus-sized business, we have developed the lottery auxiliary terminal that is suitable for multi-scenario distribution, formulated the business policy of focusing on sales and supporting self-support, and selected the market placement equipment in key areas for market testing.
Although efforts are being made to reverse the unfavorable situation, the R & D investment in China Sports Group industry is only 5.62 million yuan, and the total R & D accounts for only 0.39 percent of the operating income. The company has 18 R & D personnel, accounting for of total staff. These data are far lower than those of ANTA, Tebu, 361 Degrees and other sporting goods companies that just released their financial reports in 2018.
According to Wind Statistics, the total R & D expenditure of 2862 A- share comparable listed companies in 2017 was 523.694 billion yuan, and the average R & D expenditure accounted for of the revenue, the average proportion of the number of technicians in the company is 20%.
Research shows that there is a positive correlation between certain R & D investment and long-term growth of enterprises. If R & D investment is too low and the company is not moving forward, the company’s expected high performance growth will be difficult to continue.