Crazy Sports : Kingkey Maintain “Buy” on with Target Price HK$2.54

EQS Newswire / 13/09/2022 / 10:04 UTC+8

With less than 3 months to go for the Qatar World Cup, there is an increasing attention on sports-related stocks from the capital market. Kingkey Financials, in its recent research report, highlighted that Crazy Sports (0082.HK) is expected to ride on the wave and achieve revenue and user base expansion, thus maintaining its “buy rating” on the company. 


In the report issued on 6th September, Kingkey noted that sports lottery sales in China grew significantly during World Cup years in the past, delivering a year-on-year growth of 22.1%, 32.8% and 36.8% in 2010, 2014 and 2018, respectively. Hence, the upcoming Qatar World Cup should also lead to another surge in sports lottery sales, as well as the demand of paid sports and lottery information.


Kingkey pointed out that, Crazy Sports has delivered a 42.0% year-on-year growth for its paid information platform “Crazy Red Insights” in 1H2022. It is expected that the upcoming World Cup should greatly boost its traffic and revenue performance. And as the World Cup Finals also overlaps with the traditional peak season of consumption such as Christmas, New Year, and China’s shopping festivals, Kingkey is also expecting a surge in relevant sales and marketing opportunities.


For sports lottery retail business, Crazy Sports has already obtained operating licenses with sports lottery administration centers in more than 20 provinces and cities. It has also established cooperation with 39 national retail chains, creating a nationwide lottery retail network. This should lay a solid foundation for strong growth in commission income in the fourth quarter.


On mobile sports games, Kingkey noted that Crazy Sports’ “ACE SOCCER” was able to deliver a satisfactory performance during the last UEFA European Football Championship. Along with the recent updates of its various soccer-themed mobile games, the World Cup should be able to drive its number of mobile game users and in-game consumption, whereas its sports events and interactive quizzing entertainment platform, Fantasy Sports Events APP, should be able to enjoy a boost in traffic and user stickiness.


In short, KingKey considers Crazy Sports as one of the few listed companies with World Cup concept in the sports entertainment sector. By considering its forecasted PE ratio of merely 9.1x, the valuation was seen as attractive, thus it has maintained its “buy” rating, with a target price of HK$2.54.

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