August 8 is China's 14th National Fitness Day. Data from the State General Administration of Sports show that the proportion of people who regularly participate in physical exercise in China has now reached 37.2%, an increase of 3.3 percentage points over 2014; the proportion of people who have reached the National Physical Fitness Measurement Standard (NPFMS) pass level or above is 90.4%, with the overall pass rate increasing by 0.8 percentage points compared with that of 2014.
As the mainstay of China's sports industry, by the end of 2021, the number of listed companies related to the sports industry in China had reached 42, covering various fields such as sports equipment, sports apparel, and event operations. At the same time, there are a number of related enterprises including Keep, Sampaixuo, Kangliyuan, etc., which are sprinting to the capital market. From the point of view of the expansion of the track and types of listed sports companies in recent years, the development of China's sports industry is also moving towards specialization, diversification, segmentation, and continue to grow and develop.
Steady progress toward 5 trillion yuan target
This year is the second year after the release of the National Fitness Plan (20212025) (hereinafter referred to as the Plan), and China's sports infrastructure, sports consumption level and sports industry development have been significantly improved.
Data from the State General Administration of Sports (SGAS) shows that by the end of 2021, there were 3.971 million sports venues, 3.41 billion square meters of sports venues, and 2.41 square meters of sports venues per capita across the country***, representing an increase of 12%, 16.9%, and 15.9% from 2019, respectively. Meanwhile, the State General Administration of Sports, in conjunction with the Ministry of Finance, annually lays out 930 million yuan to subsidize more than 1,000 large stadiums to open their doors to the public for free or at a low charge, making it more convenient for the public to participate in sports and exercise.
Sports consumption, last year, per capita sports consumption expenditure increased by 43.7%, sports consumption structure continues to optimize and upgrade, service-oriented sports consumption accounted for 46.3%; sports consumption pattern is becoming more balanced, urban and rural residents to further narrow the gap in sports consumption; sports consumption of new forms of business continue to emerge, giving rise to the Internet + sports sports + tourism and other forms of business.
The goal put forward in the Plan is that by 2025, the number of participants in various sports will continue to improve, and the proportion of people who regularly participate in physical exercise will increase from 37.2% to 38.5%, driving the total size of the national sports industry to 5 trillion yuan. Compared with the overall scale of the national sports industry of about 2.74 trillion yuan in 2020, there is a growth space of more than 70%.
The General Administration of Sport's "Work Program on Sports Helping to Stabilize the Economy and Promote Consumption Activation" issued in July this year proposed to increase the supply of sports events, accelerate investment and construction, and promote sports consumption, etc., and the relevant authorities should optimize the procurement process of sports equipment and other related procurement processes, and reduce the cost of loans for sports enterprises.
Listing financing is expected to usher in a small boom
According to Shanghai Securities News reporter's statistics, four sports industry-related companies have started the listing process this year, including Keep, a sports technology company that plans to list on the Hong Kong stock market; Hobo Healthcare, which plans to sprint to the Science and Technology Creation Board and has a main business that covers sports rehabilitation equipment; Kangbite, which is scheduled to be listed on the Bejing Stock Exchange and has a core business of research, development and manufacture of sports nutritional food; and Konbit, which is scheduled to be listed on the Bejing Stock Exchange. Kambit, which plans to list on the NSE with the development and manufacturing of sports nutritional food as its core business; and Kanglai, which also plans to list on the NSE and is engaged in the research, development, manufacturing and sales of sporting goods.
Additionally, the sports industry is expected to see a wave of listings, counting the trampoline industry's stealth champion Sampai Shuo, whose IPO on the main board of the Shenzhen Stock Exchange was successful in July, and fitness equipment supplier Kang Liyuan, which is due to be listed on Aug. 11, as well.
From the prospectus disclosed by the above enterprises, China's sports industry is diversifying and booming. Engaged in the trampoline research and development production of three Pak Shuo, for example, the company said, in the sports and fitness market rapid development of the environment, sports and fitness equipment market demand increases, the company urgently need to increase production capacity through the raising of new production lines to increase the construction of production capacity.
As the largest online fitness community in China, Keep said in its prospectus submitted to the Hong Kong Stock Exchange that the size of China's fitness population and the amount of annual expenditure have shown great growth potential. the fitness population in China in 2021 was 300 million, and it is expected that by 2026 it will reach 420 million. Meanwhile, the average expenditure of China's fitness population in 2021 will be RMB 2,596 per person, which has a large growth potential.
Listed companies build up their strength for the future
According to statistics, there are 42 listed companies related to the sports industry in the A-share and Hong Kong stock markets***, covering various fields such as sports equipment, sports apparel, gymnasiums, tournament operations, and stadium operations. Data from the China Sporting Goods Industry Federation shows that as of the end of 2021, the total market value of listed companies in the sports industry exceeded the trillion yuan mark for the first time, reaching 1120.994 billion yuan (Hong Kong stocks converted according to the exchange rate of December 31, 2021), compared with 2020, the total market value increased by 268.263 billion yuan.
The reporter noted that although the sports industry has faced some challenges in the past two years, practitioners have taken this as an opportunity to cultivate their internal strength and build up their strength for the high-speed development phase after the industry recovers.
Taking Shu Hua Sports as an example, the company's 2030 strategic plan released in the first quarter of this year puts forward the goal of striving to reach 10 billion yuan in sales in 2030, which is equivalent to a 5.4-fold increase in revenue based on 2021, with a compound annual growth rate of 22.9%. Shuhua sports chairman and president Zhang Weijian said that the future of the four strategic grasp (fine products, strong brand, deep channels, high efficiency) for the work to enhance the direction of guidance, user-centered, through the digital transformation, and comprehensively promote the strategic landing.
Anta Sports, one of the leading companies in the sports industry, also released the strategic objectives of the Anta main brand in 2021. In the next five years, Anta plans to realize a compound growth rate of 18% to 25% in water flow, and the compound annual growth rate of the online business will reach more than 30%, accounting for 40% by 2025. Category, Anta plans to 2025, running shoes annual sales from 20 million pairs to 40 million pairs; basketball shoes annual sales target from 6 million pairs to 12 million pairs; women's category water scale is targeted close to 20 billion.
Also according to the five-five plan (2021 2025) announced by Turbo International, by 2025, Turbo's main brand is expected to reach 20 billion yuan in revenue, with an annual compound growth rate of more than 23%; the new brand is expected to reach 4 billion yuan in revenue scale, with a compound annual growth rate of more than 30%. According to the announcement, in the first half of 2022, Turbo International is expected to increase net profit by 35% year-on-year, with good growth momentum.
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