The General Administration of Sports plans to transfer equity and the controlling stake in China's sports industry will change ownership

China Sports Industry disclosed on the evening of the 13th that the Sports Fund Management Center of the State Administration of Sports, the largest shareholder, intends to transfer all its shares, and the transaction will lead to a change of control of China Sports Industry.

the controlling shareholder of another listed company intends to transfer control, which is the only listing platform under the State Administration of Sports.

China Sports Industry disclosed on the evening of the 13th that the Sports Fund Management Center of the State Administration of Sports (hereinafter referred to as "Sports General Fund Center"), the largest shareholder, intends to transfer all its shares, and the transaction will lead to a change of control of China Sports Industry.

strong > the stock price continued to soar before the announcement / strong >

Public data show that China Sports Industry is the largest joint-stock enterprise in China's sports industry jointly initiated and established by the Sports Fund Management Center of the State Administration of Sport, and it is also the only listed company controlled by the State Administration of Sports, and has been regarded as the only beneficiary of the restructuring dividend of the State Administration of Sports. With strong financial support and rich operation experience in the industry, the business involves the development of compound urban sports real estate, the operation, management and content provision of stadiums and facilities, the operation and management of sports competitions, sports intermediary services, the chain operation of fitness clubs, etc. At the same time, China Sports Industry objectively plays the role of many unlisted asset securitization exports under the State Administration of Sports.

the ownership structure of medium-sized industry has been relatively stable. The Sports Fund Management Center of the State Administration of Sports holds 186 million shares in the company, accounting for 22.07 percent, according to the 2016 quarterly report. At the latest closing price of 20.19 yuan, the share represents a market capitalization of about 3.7 billion yuan. The Sports Lottery Management Center of the State Administration of Sports (hereinafter referred to as "Sports General Lottery Center"), its related party, holds 3.23% of the shares in China Sports Industry, which is the second largest shareholder of China Sports Industry. In addition, the Sports equipment Center of the State General Administration of Sports (hereinafter referred to as "Sports General equipment Center"), another related party of the Sports General Fund Center, holds a 0.29% stake in the China Sports Industry. Together, the three shareholders under the State Administration of Sports hold a total of 25.59% of the shares in China Sports Industry.

it is worth noting that before the announcement of this equity transfer, the share price of China Sports Industry continued to soar. At the end of September, the company's share price was only about 16 yuan, and by Friday (November 11) it had risen to 20.19 yuan, an increase of about 1%.

strong > Sports General quality Asset injection Plan "break the appointment" / strong >

combing through the previous announcements of the China Sports Industry, the reporter found that it has been a long time since the Sports General Association pulled out of the medium Sports Industry.

as early as December 2006, China Sports Industry issued the "Communication and consultation on the non-tradable share structure Reform Plan and the Adjustment notice of the non-tradable share structure Reform Plan of China Sports Industry Group Co., Ltd." and the "statement on non-tradable share structure Reform of China Sports Industry Group Co., Ltd." The major shareholders of China Sports Industry promise to give priority to the injection of high-quality assets into China Sports Industry as far as possible at an appropriate time in the future, on the basis of complying with national laws and regulations, and fulfilling the corresponding legal procedures.

however, this commitment made by the General Administration of Sports "stood me up" after many years.

in August 2014, the company announced that it had received a "notice on the commitment of the Sports Fund Management Center of the State Administration of Sports to the reform of non-tradable shares" sent by the General Administration of Sport, saying that there were no high-quality assets to be injected. Despite various efforts, a clear and feasible plan has not been formed within the prescribed time limit. In this regard, the CSRC also sent a "decision on administrative supervision measures" to major shareholders, ordering them to publicly explain the non-performance of their commitments.

the General Administration of Sports has clearly expressed its intention to leave the field at this time. In August 2014, the General Administration of Sports replied that due to the lack of high-quality assets to be injected, a clear and feasible plan could not be formed within the prescribed time limit despite various efforts, and the shares of China Sports Industry would be transferred within the next three years. On November 3 this year, China Sports Group completed the transfer of equity, officially replacing the Sports General Lottery Center to become the second largest shareholder of China Sports Industry.

China Sports Group was established in 1993. The largest shareholder is the Chinese Olympic Committee (60%), and the second largest shareholder is the Service Center of the State Administration of Sports. According to the relevant analysis, although there are many overlaps in personnel and establishment between the Chinese Olympic Committee and the State Administration of Sports, it can not be considered that they constitute a consistent actor relationship in the legal sense, that is, the shares held by the China Sports Group transferee General Lottery Center are not assets transferred under the same actual controller.

as a result, the State Administration of Sports still holds a total of 22.37% of the shares in the China Sports Industry through the Sports General Fund Center and the General Sports equipment Center. According to the announcement of the China Sports Industry, the Sports General Fund Center intends to purchase all the shares, but the shareholding trend of the Sports General equipment Center is unknown.

strong > what is the intention of sudden transfer of equity? / strong >

there are two official and market interpretations of the reasons why the Sports General Lottery Center transferred the shares of China Sports Industry. At the level of the State Administration of Sports, the transfer is intended to invest in China Sports Group "with shares in China Sports Industry", while some brokerage research institutions believe that this is aimed at obtaining social capital through the transfer of equity in order to become bigger and stronger. According to the relevant research, the profit model of the Chinese sports industry is clear, involved in the sports industry chain such as event management and operation, sports venues operation, especially the lottery business is expected to benefit from the industry policy change.

another set of data reveals different information. In 2014, the net profit of China Sports Industry fell 24.35% compared with the same period last year, and continued to decline 24.76% last year, with net profit falling below 100 million yuan. In the first quarter of this year, China Sports Industry recorded a loss of 11.35 million yuan, reversed losses in the second quarter, made a small profit in the third quarter, and made an overall profit of 20.47 million yuan in the first three quarters, down 59.11 percent from the same period last year.

A researcher who has been concerned about the Chinese sports industry for a long time said that the transfer of equity by the sports general fund center is relatively sudden, and except for the transfer of equity by the sports general lottery center, there is no sign that the State Administration of Sports intends to transfer the Chinese sports industry. In his view, although the performance of the Chinese sports industry is weak, it is, after all, the only A-share listed company under the State Administration of Sports, and there are expectations of institutional reform. He believes that the potential institutional dividends are supplemented by a more reasonable personnel structure. The Chinese sports industry has the possibility of stepping out of the low ebb.

up to now, it is impossible to know the specific identity of the counterparty of the sports general fund center, and some analysts tend to think that the state-owned enterprises are more likely to transfer the controlling shares in the sports industry.

strong > Yien collates and publishes / strong >

Editor: nancy

according to relevant reports of Securities Times and Beijing News.