China’s sports stocks to sizzle this summer
The European Championship has ushered in a popular sports season and ignited fund inflows into the sports sector. With Chinese companies on a recent shopping spree for global sports assets, analysts expect to see an increasing trend of capital rushing into the sector to capture business opportunities and perhaps make political gains.
As the European Championship and Copa America kicked off at the start of June, the sports sector is once again in the investor spotlight. As of the end of last week, the CSI Sport Industry Index, which measures the performance of sporting goods and content distribution-related stocks, had gained 1.5 per cent over the previous four weeks, outperforming the Shanghai benchmark index.
“The European Championship has marked the start of a sports feast this summer, followed by the Chinese Super League, the Olympics, and the qualification games for the 2018 FIFA World Cup in Asia,” said Lin Juan, an analyst for Ping An Securities.
“We expect the heat to continue rising in the sports sector,” she said.
Lin suggested investors focus on industry leaders which distribute sports content, operate or market key events, own sponsorship rights, or even run sports lottery businesses. Her favourites included Leshi Internet Information & Technology, an online video and internet TV content provider, as well as marketing firms Leo Group and Wuhan DDMC Culture.
Zhong Qi, an analyst for Haitong Securities, also said the sports sector is seeing “accelerated” capital inflows. “Chinese companies are on an acquisition spree in sports assets,” he said, referring to the recent purchase of Italian football team Inter Milan by Chinese retailing giant Suning Commerce Group.
