V1 Group Ltd
Kingkey raised Crazy Sports’ (82.HK) TP to HK$2.53 and reiterated its BUY call

Kingkey raised Crazy Sports’ (82.HK) TP to HK$2.53 and reiterated its BUY call

Kingkey Securities reiterated its BUY call on Crazy Sports Group (82.HK) with a revised SOTP-based target price of HK$2.53.

Crazy Sports operates a vast and consolidated digital sports entertainment platform providing paid sports information contents, live-streaming and social media, sports quizzing games and offline lottery sports retail services. In addition, the Group develops and operates series of sports adopting international IPs and leisure mobile games.

As the government aimed to build a CNY5.0b worth of sports industries by 2025 and forge the nation into global sports superpower by 2035, Kingkey Securities believes that Crazy Sports as a distinctive O+O (Online plus Offline) sports entertainment provider, is well-posted to monetize from the expanding sports industries that is strongly supported by the state.

Kingkey Securities believes that the recent catalysts in Crazy Sports’ fundamentals include Beijing Winter Olympics 2022 and FIFA World Cup Qatar 2022, launching of sports quizzing platform and blockbuster mobile game, and expansion in sports lottery POS network. Notably, the number of its total users and monthly average users at its platform surged 63.0% YoY and 275.0% YoY, respectively, to 38.9m and 2.6m for 1H FY21E, with more new users are expected to be acquired in 2H FY21E.

Bottom line returned to positive territory for 1H FY21E and reported net earnings of HK$62.0m, against loss of HK$16.4m reported for 1H FY20A, Kingkey Securities has revised up the earnings forecasts for FY21E and FY22F by 1.2% and 4.2%, respectively.

Lastly, Kingkey Securities revised Crazy Sports’ SOTP-based target price up by 26.5% to HK$2.53 and reiterated its BUY call on Crazy Sports.

This investor note is issued by DLK Advisory Limited.