Contemporary Mingcheng (600136): Financial pressure expected to ease with new rules for benefiting refinancing

Contemporary Mingcheng (600136): Financial pressure expected to ease with new rules for benefiting refinancing

Event: Recently, the CSRC issued the “Administrative Measures for the Issuance of Securities by Listed Companies”, the “Interim Measures for the Administration of the Issuance of Securities by Listed Companies on the GEM Board” and the “Implementation Rules for Listed Companies’ Non-public Issuance of Shares ”, which has relaxed the regulatory requirements for refinancing of listed companies.

The company is the most beneficial target of the new refinancing regulations.

In 2018, the company spent 500 million US dollars to acquire Xinying Sports, and the transaction was paid in full cash, forming a certain scale of expenditure, resulting in the company’s profits being swallowed up by financial expenses.

In December 2019, the company completed the non-public offering of shares to Contemporary Group, Li Jianguang, Yu Lingxiao and Li Hongxin at an issue price of 8.

48 yuan / share, raising a total of 8.

300 million; On February 6, 2020, the 成都桑拿网 company announced that it had received an objection letter from the Shanghai Stock Exchange for the company’s non-public issuance of corporate bonds.

We believe that with the introduction of new rules for refinancing and refinancing, the company’s financing channels will gradually be unblocked, and it is expected that the pressure on financial costs will be fully relieved, suppressing overcoming factors or gradually eliminating them.

The company is the most beneficial target of the European Cup.

The company owns the new media rights of the European Cup in 2020 and is one of the purest sports targets.

In addition, the company also has the exclusive global commercial rights of AFC-related events from 2021-2028, and the full media rights of the La Liga for the 2019 / 2020-2024 / 2025 season, building a very complete copyright matrix.

Among them, the time span of AFC’s related rights spans nearly 10 years, including copyright, sponsorship rights and derivatives rights, and is an exclusive global right, which is expected to become the company’s future performance indicator and also the focus of the alternative business of copyright business.

  The company is a leading sports copyright operator and marketing service provider in China, with industrial resources reorganized and rich copyright reserves. It has gradually become an Asian football, and the development of Chinese football has entered a fast track.

The epidemic situation does not change the basic logic of the 2020 sports year.

Affected by the epidemic, domestic sports events have been postponed, and the sports sector has suffered short-term shocks.

The core events of 2020 are concentrated in the summer (the European Cup starts in mid-June to mid-July in 2020; the 2020 Tokyo Olympic Games starts in late July to early August), and the duration of the epidemic is limited, with limited impact.

We believe that the sports sector in 2020 will continue to catalyze major events such as the European Cup and the Olympic Games. It is a segmented circuit that is well worth configuring.

Earnings forecasts and investment advice.

We expect the company’s EPS for 2019-2021 to be 1.

22 yuan, 0.

70 yuan, 0.

90 yuan.

The company is one of the purest sports targets. The benefit of the refinancing policy is unbundled, and the pressure on financial costs will be improved. We maintain a “buy” rating and give it an estimate of 25 times in 2020 with a corresponding target price of 17.

5 yuan / share.

Risk reminder: the risk of major changes in sports policy, the risk of business integration or less than expected, the risk of event copyright acquisition or less than expected, the operation of M & A projects or the risk of less than expected.