\u3000\u3000 Shanghai Yaoji Technology Co.Ltd(002605) (002605)
The overseas star card system is mature, while the Chinese star card market is still in its early stage
The star card industry chain includes five main links of “IP issuance sales rating transaction”. Under the mature overseas market competition pattern, the five global events at the IP end are concentrated in the hands of three issuers, forming a market scale with an average annual manufacturing and issuance of US $2 billion and secondary transactions of more than US $10 billion, and it is expected to maintain a compound growth rate of 23% from 2020 to 2027. In contrast, China’s star card has developed for more than 30 years and is still in its early stage. The main players are only card Amoy and China sports. The total annual circulation + trading volume is about 1 billion yuan, which has great potential compared with the overseas market.
There are a large number of fans of sports events in China. New media (short video and live broadcast) help star cards break the circle. The long-term development of China’s star card market depends on market cultivation
As a derivative of sports IP, content star card is more closely related to the emotion of stars, and the operation rules and value fluctuation are also highly related to the operation of the alliance. Star card is dominated by fans of sports events. China has a huge fan group (200 million football and 125 million basketball), and the penetration rate of star card players in the fan group is still at a very low level, with great potential to break the circle. Kwai game player has been known to play card games tiktok in recent two years, mainly through live broadcast, short video and other emerging media. It is more efficient and widely efficient than short line video and live broadcasting platforms such as jitter, fast hand and B station, compared with early online stores and websites. And for Z generation, Men and other people can reach more accurately. The broken circle effect of star card is expected to continue, and the education, promotion, development and growth of star card market are advancing steadily.
Yaoji Funeng card taoning company develops the star card business, makes efforts in the whole chain of issuance, channel and transaction, and creates a business closed loop. The application of new technologies such as NFT will help the star card bring more convenience in power confirmation, anti-counterfeiting and digital transaction
Content 1) at the distribution end, Yaoji plans to expand the scope of IP signing, help the star card touch reach a wider range of Chinese sports lovers, and help the star card touch reach a wider range of users; 2) On the channel side, the annual production capacity of Yaoji traditional playing cards exceeds 1 billion pairs, and the offline and online retail channels are mature; 3) At the trading end, Yaoji invested in card hobby, the largest second-hand trading platform for star cards in China, with a market share of 70-80%. The trading platform is a typical bilateral market. Card Taoyi has the first mover advantage and strong network effect.
Investment suggestion: we predict that the net profit of the company’s main business (Games + Internet marketing + traditional poker) from 2021 to 2023 will be 566 / 681 / 830 million yuan respectively, with a year-on-year increase of – 48.2% / 20.3% / 21.9%. Compared with overseas mature enterprises, the star card business is valued according to the P / Gmv method. Because the Chinese star card is still in the stage of rapid growth, a certain valuation premium is given. The star card issuance + trading business is valued at 5 billion to 9 billion yuan.
Risk warning: policy supervision risk; Risk of changes in cooperation policies of platform parties; Marketing development is less than expected; Core business cost risk; Multi domain layout management risk; The company has recently seen stock price changes.
