In 2022, as the epidemic is gradually brought under control, the travel needs of many outdoor enthusiasts have been suppressed for a short time, and short-distance travel such as local tours and peripheral tours have become the first choice for many people to travel for holidays, accounting for more than 46% of the city and surrounding tours. Sports such as frisbee and camping that are suitable for excursion destinations have also become fashionable.
Subsequently, the performance of a number of listed companies related to tents, camping equipment, camping ingredients, etc. also increased. In addition, among the A-share listed companies represented by ANTA, there are also some enterprises whose main business is mountaineering, skiing, and land surfing equipment, and with the success of the Winter Olympics, outdoor sports such as ice and snow sports have also become a trend.
Under the influence of the epidemic, the penetration rate of outdoor sports in mainland China will be about 28% in 2022, which is higher than in the past, but there is still much room for improvement compared with the average of more than 50% in Europe and the United States.
Nowadays, in the context of the weakening impact of the epidemic, the biggest challenge that domestic outdoor products need to face comes from abroad.
01
Blue ocean market, the future of the industry is downstream
At present, the vast majority of well-known outdoor sports have emerged abroad, and in this regard, the mainland belongs to the late-developing market.
According to the "China Outdoor Sports Industry Development Status Survey and Investment Trend Forecast Report (2022-2029)" released by Guanyan World, the popularization of outdoor sports in mainland China has only been more than 10 years ago, and from 2003 to 2013, it has experienced a period of blowout development, and the total shipment of outdoor products has increased from 300 million yuan to 19.7 billion yuan. From 2014 to 2020, the total shipment of outdoor products in mainland China increased from 11 billion yuan to 13.9 billion yuan, and the total retail sales increased from 20.1 billion yuan to 24.5 billion yuan.
At present, the mainland's outdoor sports market is also mainly concentrated in first-tier and new first-tier cities, and the data of the research report shows that residents in these cities have a high degree of consumption capacity and acceptance of new things, and also have a certain pursuit of quality of life, accounting for 65% of the domestic outdoor sports participation group.
From the perspective of projects, the four projects with the highest participation rate are cycling, hiking, mountaineering and camping, and the participation rate of the four projects exceeds 30%, which belongs to the "traditional advantage project". Among the emerging projects, paddleboarding, frisbee, land surfing and other projects have a high growth rate due to the small base.
In terms of outdoor sports preference, consumers prefer hiking to 75%. Participants in outdoor hiking projects usually buy a batch of equipment suitable for outdoor activities, including outdoor power banks, knives, lighting equipment, etc. in addition to clothing and tents.
The relatively strong demand for this part has also led to the fact that the business content of the top three outdoor concept stocks with a high market value of A-shares at present: Juxing Technology, Jihua Group, and Nanji E-commerce is surprisingly consistent, all including basic camping supplies such as tents. Jihua Group has a complete product line in "clothing" and "housing", while Juxing Technology has a layout in telescopes, outdoor power supplies, knives and other aspects. In addition, A-share also has OEM/ODM foundries that provide fabric accessories for other outdoor enterprises such as Taihua New Material and Yuma Shading.
The outdoor market from upstream to downstream is divided into three parts: raw material production, OEM and brand owners, in general, the mainland listed outdoor enterprises are concentrated in the middle and upper reaches of the industrial chain, and there is a lack of downstream brands. Among the listed companies with a circulating market value of more than 3 billion yuan, only the growth of Jialinjie, Pathfinder and Mu Gaodi's own brands is more eye-catching, and some of Mu Gaodi's products have raised their prices to the level of 10,000 yuan, and the year-on-year growth rate of revenue and profit ranks first in the industry.
However, Mu Gaodi's gross profit margin is not outstanding in the industry, only about 30%, which is the average level. However, the gross profit margin of Jinhong Group, which is mainly engaged in the terminal sales of high-end clothing, is close to 70%, ranking first in the industry.
There is a trend of "attacking downstream" in the outdoor sports industry, and in this process, a number of domestic 2C brands will be born. As the domestic C-end market becomes more mature, the average gross profit margin of the industry will continue to rise.
02
Industry opportunity concentration period
In the past two years, the outdoor sports industry has ushered in several development opportunities, the two most notable opportunities are the rise of peripheral travel in the context of the epidemic and the ice and snow sports boom brought by the Winter Olympics.
According to data from the China Tourism Academy (data center of the Ministry of Culture and Tourism), due to the epidemic prevention and control requirements such as work location and children's schooling, domestic intra-provincial tourism accounted for about 77.9% in 2022, of which 46.3% were in and around the city.
Due to the different distribution of tourism resources in different places, tourists in some areas can only choose to find travel destinations near their place of residence, and the "camping economy" has become a common choice for tourists in many regions in this context. According to data from Qyer.com, in 2020, the popularity of camping increased by 303.5% year-on-year, and this year became the first year of "camping" in China.
At the end of 2022, the "Guiding Opinions on Promoting the Healthy and Orderly Development of Camping Tourism and Leisure" triggered by 14 departments including the Ministry of Culture and Tourism also provided effective support for the standardized development of the industry. During the "May Day" holiday in 2022, the attention to "campgrounds" on the Internet remained high, and the number of "camping" related notes on Xiaohongshu exceeded 6 million, five times that of 2021; Baidu's search popularity also increased by 298% year-on-year.
Not only online, but also the camping industry has eaten a lot of dividends offline. According to iMedia Consulting's "2022-2025 China Camping Economic Development Prospect and Business Layout Analysis Report", the core market size of the domestic camping economy will reach 74.75 billion yuan in 2021, a year-on-year increase of 62.5%, driving the market size of 381.23 billion yuan, a year-on-year increase of 58.5%.
In February 2023, Yangzhou Jinquan, which is mainly engaged in the research and development, design, production and sales of outdoor products, landed on the main board of Shanghai, the company mainly produces tents, sleeping bags, outdoor clothing, backpacks and other outdoor products through OEM/ODM and other modes, and customers include well-known brands such as Kollerman, Beimian and Swedish Arctic Fox. Its A-share counterparts Mu Gaodi and Sanfu Outdoor have also performed well in the past year.
Another industry opportunity worth watching is the Winter Olympics, where Gu Ailing became the focus of domestic attention at this globally anticipated winter sports event, with Baidu search popularity for skiing events increasing by 369% year-on-year during the Winter Olympics. At the commercial level, ice and snow sports and ice and snow tourism are increasingly loved, and a number of enterprises related to ice and snow sports have also ushered in their own "east wind" in the "harsh winter wind".
Data from the Prospective Economist shows that driven by the Winter Olympics and the return of demand for ice and snow exports, the number of ice and snow tourism in the mainland has grown rapidly in recent years. From 170 million in the 2016-17 ice and snow season to 254 million in the 2020-21 ice and snow season, to the 2021-22 ice and snow season, this number has reached 344 million, and the domestic ice and snow industry market size increased from 600 billion yuan in the same period of 2020 to 727.3 billion yuan in 2021.
At the same time, major enterprises are also actively deploying ice and snow sports. At the 2017 National People's Congress, Ding Shizhong, then chairman of the board of directors of ANTA Group, submitted three proposals, including: supporting the ice and snow sports equipment industry, improving laws and regulations, supporting cross-border mergers and acquisitions of private enterprises, and supporting small and micro enterprises to participate in government procurement. In 2016-2017, ANTA acquired Descente and entered into a joint venture with Kolon Sports in China, both brands of which are ski equipment manufacturers. In 2018, it acquired a number of ice and snow sports equipment brands.
According to the statistics of "Sports Business", the teams and athletes sponsored by ANTA Group in the Beijing Winter Olympics have accumulated 37 golds, 26 silvers and 20 bronzes, and the brands ranked first, second and sixth in the "2022 Beijing Winter Olympics Sports Brand Value List" are all behind ANTA Group.
Sanfo Outdoor, Noble Bird, Bosideng and other brands have also laid out in ice and snow sports equipment, and listed companies focusing on ski simulators, venue construction, and refrigeration equipment such as Yingpais, Singyuan Technology, and Iceberg Cold and Hot have also experienced good stock price performance during the year.
03
Can the heat last? Financing is in real place
The field of outdoor sports has ushered in several more eye-catching industry opportunities in the past few years, and has also attracted a certain amount of heat on the Internet, but it is still difficult to change the fact that the mainland outdoor sports industry started late and has a "thin foundation". For this kind of industry, which is still in the initial stage of development, the attention of capital to it is particularly telling.
From a physical point of view, outdoor sports are indeed becoming more and more "Internet celebrities", but judging from the number of financing events in the whole industry of outdoor sports in 2022, it is still too early to say that the industry is ushering in a "blowout".
According to the data on the total scale and added value of the national sports industry in 2021 released by the General Administration of Sports, the total scale of the sports industry in the mainland is 3,117.5 billion yuan, exceeding 3 trillion yuan for the first time in history; The "National Fitness Plan (2021-2025)" issued by the State Council mentioned that the scale of the mainland sports industry will reach 5 trillion yuan by 2025, which means that the mainland sports industry still has a lot of room for growth.
Xu Yong, founder of AC Accelerator, once said that from the second half of 2021, many capital began to invest in the direction of policy support. In 2021, of the total plate of 310 million yuan in the domestic sports industry, the total output of the manufacture of sporting goods and related products reached 1,357.2 billion yuan, accounting for 43.5%, which is the largest piece of all categories of the sports industry.
This means that the construction of traditional sports and related equipment venues will remain the main theme of development in the coming period, and most of the capital may continue to flow along this river.
According to data released by Lazy Bear Sports, there were 54 investment and financing events of domestic sports-related enterprises in 2022, of which the total amount disclosed was about 1.367 billion yuan, a decrease of 3.793 billion yuan or 87.86% compared with the same period in 2021.
Among the 54 financing events, a total of 29 were related to offline physical business, 4 were outdoor camps and 6 were outdoor equipment, all of which were round A and before.
Of the 4 camping brands that received financing, 3 were positioned to be "refined" and "light luxury", which may mean that the "sports" element in these brands is weak. In addition, among the 6 outdoor equipment brands that have received financing, 3 are related to electric travel tools, namely 1 electric skateboard and 2 electric assisted bicycles, and 1 high-end skiing, outdoor functional clothing and outdoor equipment enterprises.
It can be seen that the attitude of capital towards the domestic "hardcore" outdoor sports track is still relatively cautious, and the attitude in the field of traditional projects and indoor fitness is relatively positive. Sequoia China made a total of 4 shots in this field in 2022, the most active among all institutions, of which 2 were acquired by high-end ski brand Snowowl Technology, and the other two were invested in electric skateboard brand Exway and trendy sports brand STARTER.
Compared with the attention received by the outdoor sports industry in 2022, investment institutions are still honestly focusing on a more general and C-end market.
04
Hardcore outdoor, road barrier and long
At present, a number of large-scale outdoor sports companies with certain strength have emerged in the A-share market. Outside the gate of the exchange, there are also companies such as Kaile Stone that focus on pendant projects and occupy a place in their respective segments. Some companies have been listed, but they do not have their own production lines, and some OEM for major international brands, but they have not been able to strengthen their own brands.
On February 10, 2023, Sanfo Outdoor said on the investor interactive platform that the company has not yet built its own production line. The higher-end X-BIONIC close-fitting layer was developed in Switzerland and produced in Italy. Sanfo did not answer positively on the question of whether high-end fabric production technology considered finding domestic partners to overcome technical problems and reduce costs, but said that product procurement costs and domestic production costs are "controllable".
Yangzhou Jinquan, with OEM/ODM as its main business model, accounted for 81.17%, 85.95%, 84.35% and 86.07% of its overseas revenue during the reporting period, and its main income came from overseas. The excessive proportion of foundry business has led to Yangzhou Jinquan's gross profit margin being significantly lower than that of its peers. During the reporting period, the gross profit margin of tent business was 22.74%, 20.19%, 23.59% and 26.91% respectively. In the same period, Mu Gaodi, which also takes tents as its main product, has a gross profit margin of about 33% in domestic operation.
The difference between the two is that Mu Gaodi's foreign business revenue accounts for the same high proportion, about two-thirds of the total revenue, but Mu Gaodi's own brand tent products can still obtain higher gross profits in China.
After combing the existing outdoor sports concept stocks in A-shares, "Investor Network" found that among the existing outdoor sports enterprises, most of the enterprises involved in equipment production are concentrated in umbrellas, folding chairs, tents, clothing and other products, with a high degree of overlap. Some companies have the ability to produce outdoor power supplies, cooking utensils, bags, and lighting equipment, and a number of companies operate a number of camping tourism projects.
The existing listed outdoor sports enterprises in China can basically cover the needs of entry-level consumers. However, in terms of professionalism, domestic brands still need to make up for their shortcomings. At present, there is only one company in the A-share market, which is oriented to the professional outdoor sports market, including skiing, mountaineering, rock climbing, sailing, golf and other fields.
In general, the breadth of domestic outdoor brands is more than enough, the depth is insufficient, and the attention to more hardcore and higher unit price sports equipment still needs to be improved. This depends on the increase in the penetration rate of outdoor sports nationwide and the in-depth penetration of each company's own field.
This article is from Investor.com