LED by IP and driven by digital, the strategic upgrade of Lisheng Racing, the leader of Chinese auto sports

On the evening of April 7, Lisheng Racing released its 2021 annual report, thanks to the effective prevention and control of the domestic epidemic and the unified deployment of relevant government departments, in 2021, the company's sports events, sports clubs, stadium operations and other sectors of the business achieved greater growth year-on-year.

According to the annual report, in 2021, the company achieved operating income of 281 million yuan, an increase of 40.37% year-on-year; net profit attributable to the mother of 3.18 million yuan, an increase of 106.24% year-on-year; overall gross profit margin of 30.51%, an increase of 12.05%; total assets and net assets of 1.136 billion yuan and 816 million yuan, an increase of 91.38% and 89.14% year-on-year.

Among them, the sports event operation business of Lisheng Racing achieved revenue of 110 million yuan, an increase of 53.85% year-on-year, and achieved an operating profit of 34.548 million yuan, an increase of 532.95% year-on-year. The operating business of sports venues achieved revenue of 65.228 million yuan, an increase of 38.42% year-on-year, and achieved operating profit of 14.268 million yuan, an increase of 104.52% year-on-year.

At the same time, the annual report discloses the company's new development strategy. Focusing on the national "14th Five-Year Plan" sports development plan, under the national strategy of "national fitness" and the inclusion of sports results in the scope of junior and senior high school academic level examinations, as well as the "14th Five-Year Plan for the Development of the Digital Economy" and other policy guidelines, the company formulated a "IP-led, digital-driven" development strategy for the new era. Deepen the development of related businesses from the three dimensions of "space", "IP" and "digitalization". Stadiums, sports events and digital sports not only coordinate and empower each other, but also continue to develop in a circle to achieve the strategic upgrade of the company's platform development.

While developing the racing business, how will Lisheng Racing launch a new track?

Consolidate the leading edge of the racing business and release a new strategic proposition of "IP-led and digital-driven"

According to public information, the main business of Lisheng Racing in 2021 includes sports event management, sports venue management, sports club operation, sports equipment manufacturing and sales, and marketing services.

According to the annual report, in 2021, the company attracted non-professional riders, including many stars, to participate through the holding of its own IP events (GT short-distance series, etc.), which further enhanced the company's popularity in the field of sports event management while achieving better economic and social benefits.

According to the annual report, the company takes Shanghai Tianma Circuit, Beijing China Automobile League Depot and Zhuzhou International Circuit as the venue matrix, and on the basis of the existing IP of many international or national head events in the company system, it has created and operated independent event IP such as Tianma Driving, Zhongnan Racing Festival, Super Endurance Championship (SEC), Elite Series, Lisheng Super Circuit Festival, etc., supplemented by the company's 21-year operation of the racing training system, providing a unique promotion ladder from bottom to top for the majority of auto sports enthusiasts. And with the help of media communication empowerment, expand the audience range of motor sports to create greater media value.

At the same time, Lisheng Racing said that on the basis of the stadium stores based on the "Saika Alliance", the company will improve the quality of existing events while realizing the comprehensive platform of individual customer groups, and continue to develop new event IP to enrich the company's event system. Especially with the outbreak of the new energy vehicle market, the company focuses on the development of events suitable for new energy vehicles.

While consolidating the inherent business, based on the current situation of China's sports industry, Lisheng Racing has fully implemented the new strategy of "IP-led and digital-driven" based on the market structure and future.

The future has come, lisheng into the digital sports industry leader

For the company's new development strategy of "IP-led and digital-driven", Yu Xingyu, general manager of the company, introduced to Yinsimaki Financial Reporter that in terms of digital strategy, Lisheng Racing will increase capital operation in 2021, set up a digital business group, acquire 25% of the equity of Shenzhen Yuedong Tianxia Technology Co., Ltd. (which has a national fitness platform product "Yuedong Circle" APP), and increase the research and development and investment in national fitness IP to form a national fitness digital solution based on SAAS+PASS. Actively carry out digital marketing service activities, and increase cooperation with the government, enterprises, and schools in sports digital services.

The reporter learned that the "sports bank" is the core product of the company's national fitness business. The digital team represented by Yu Xingyu is the founder of the "Sports Bank" product concept. "Sports Bank" is based on big data algorithms and smart wearable devices, AIoT, Internet of Things and other technologies, enriching the sports scene and digitizing citizens' movement behavior.

Yu Xingyu told Yin persimmon financial reporter: "Since 2017, the team began to develop this product, which has become a well-known platform product in the field of national fitness digitalization. Its core service is to establish sports accounts for citizens, realize the integral monetization of sports data through the digitization of citizens' movement behavior through algorithms, form a business model of link consumption to break the circle, and establish two sets of operating systems of platform traffic and digital services through the establishment of a 2G/2B service system. ”

Recently, keep Hong Kong stocks IPO is imminent, and its loss has rapidly expanded from 185 million in the first three quarters of 2020 to 818 million in the same period of 2021. How to achieve user growth and the commercialization of sports APPS is a pain point in the industry. The product logic of "Sports Bank" provides a new development guide for sports and fitness APP, which drives user growth through services in terms of user growth and avoids the heavy investment purchase model. At the same time, the differentiated competition strategy of "rural encirclement of cities" provides a new impetus for the development of the platform.

"Science and motivation are the two major mechanisms of national fitness." Yu Xingyu said, "In terms of the scientific mechanism of national fitness, with the relevant departments of the state leading the research and development of 'sports prescriptions', 'sports bank' will become a service product of epoch-making significance; while the incentive mechanism of national fitness is more market-oriented, combined with the development of science and technology, the digitization of sports behavior, the digitization of sports scenes, and the digitization of sports tools have provided a technical basis for the development of sports banks." Of course, most people don't exercise to get rewards, but such incentives can positively promote their motivation and enthusiasm for exercise. ”

The creation of the national fitness IP of Lisheng Racing has also been welcomed by the market and supported by policies. The popularity of the national fitness movement and the degree of participation in international sports cooperation are important indicators of the degree of modernization of a country. In March 2022, the CPC Central Committee and the State Council issued the Opinions on Building a Higher Level of National Fitness Public Service System, proposing to build a higher level of national fitness public service system.

"At present, our company's ongoing national physical fitness competition and the upcoming National Community Games aim to promote the enthusiasm of the whole people for fitness and cultivate the sports habits of the citizens." Yu Xingyu said, "National fitness has become the key direction of the current company's strategy, and the company will focus more on the creation and operation of national fitness IP in the future." ”

For the original racing business, Yu Xingyu said: "The company currently has no plans to divest the original business, the racing car itself is also an IP, the development of racing culture in China is still in its infancy, the market needs to cultivate and develop, the company has a leading edge in this field in China, and our route is to gradually penetrate the sinking market." The racing culture is integrated into the lives of the public in the form of life experience and game entertainment, such as the popular IP such as the 'single circle king' and 'venue ranking list' that we are now creating, which has a strong entertainment, which is also a way of cultural cultivation. ”

On the other hand, the company will connect events, venues, clubs and other scenarios through digital service platforms. The digital perspective of motorsport itself, focusing on the establishment of a mechanism for the community and emotional connection of the group, we want to make sports a social linker through socialization and emotion, and establish a multi-level connection between people and sports. Yu Xingyu added.

For the sports education product "AI Physical Education Class" project, Yu Xingyu introduced: "The project has strategic cooperation with Tencent Education and other institutions, and is committed to building it into a leading product in the industry. At present, the product has entered nearly 4,000 schools across the country, with the country's further attention to campus sports and policy promotion, the product service is expected to further show an explosive growth trend. ”

In terms of talents, the company will continue to strengthen the construction of talent teams in Internet products and digital industry operations, and promote innovative mechanisms and cultures. In order to further motivate the entire team to work hard, the company launched a new round of employee stock ownership plan and stock option incentive plan in October 2021, covering all core backbones.

The future is here. The goal of Lisheng Racing is to become a leader in the national fitness and digital sports industry. Some insiders analyzed that this year, the General Office of the CPC Central Committee and the General Office of the State Council issued the "Opinions on Building a Higher Level of National Fitness Public Service System" (hereinafter referred to as the "Opinions") and issued a notice requiring all regions and departments to conscientiously implement it in light of reality. The current development strategy of Lisheng Racing is exactly in line with the content of the Opinions. It is predicted that the total scale of the mainland's sports industry will reach 5 trillion yuan, accounting for 2% of GDP. According to this calculation, the average annual growth rate of the total scale of the sports industry from 2021 to 2025 will reach 12.8%. The mainland sports industry will continue to maintain a trend of rapid development. The guidance of the policy and the market scale to be developed, coupled with the new direction of the development of Lisheng Racing, believe that the value of the company will continue to be reflected, and from the 2021 annual report of the company's net profit increased by more than 100% year-on-year, this sign has begun to show.