CICC International: Anchoring the Target of a 7 Trillion Industry, Exploring the Commercial Potential of Sports Economy

China Merchants Bank International released a research report stating that from the current trend of transformation in the sports industry and the focus of policies, there may be greater incremental space for companies related to event operations in the future. Looking at the stock price performance of major events in the past, under the event-driven of major events and the empowerment of AI technology, companies related to sports media marketing, IP derivatives have higher flexibility, sports venues, sports equipment, sports lottery and other related companies are also expected to benefit. The domestic provincial super leagues have opened up a new model, which is expected to not only benefit sports industry chain enterprises, but also spread to urban tourism and other related companies, with cultural and sports tourism targets expected to benefit. Key points of China Merchants Bank International are as follows: Policy-driven: Continuous improvement in top-level design, increasing landing efforts Over the past 25 years, the proportion of service consumption in resident consumption has continued to increase, becoming an important engine for expanding domestic demand and driving economic growth. The government has repeatedly introduced policies to promote service consumption, with sports consumption being frequently mentioned as an important area. Special policies for service consumption and sports consumption are gradually improving with increased efforts into implementation. Industry scale: Structural optimization of scale growth, set clear medium-term target of 7 trillion Under the dual drive of policy guidance and consumption upgrade, the total scale of China's sports industry has steadily increased. From 2015 to 2024, the CAGR of total industry output and value added are 9.41% and 12.64% respectively, with total output estimated to reach 5 trillion yuan in 25 years. In the past, China's sports industry has been dominated by manufacturing, with the proportion of sports service industry steadily increasing in recent years, shifting from manufacturing to diversified development. By 2024, the proportion of total output of sports service industry is expected to increase from 33.4% in 2015 to 57.7%. The State Council's office recently released a document, anchoring the goal of achieving a total output of 7 trillion in the sports industry by 2030, with sports events playing a core leveraged role. Review of events: Quality event supply is scarce, strong leverage effect of ticket economy Taking Europe and the United States as examples, high-quality sports IP is the key engine of the industry chain, with top sports IP releases strong commercial value, and by 2024, the global top sports IP annual revenue could reach tens of billions or even hundreds of billions of dollars. Currently, the value of domestic event performance in the sports industry accounts for only 2%, with insufficient commercialization and marketization, and the brand influence is far below international events, with a scarcity of high-quality supply. The popularity of the "Supe" event in 2025 provides a model for mass events, with the government guiding and market leading combined with nationwide participation in marketing to help reach a broader audience, while the integration of sports, culture, and tourism jointly drives consumption, achieving a leverage effect of "1 yuan ticket driving 7.3 yuan consumption," with the commercial value of other professional events in China gradually increasing. The success of "Supe" demonstrates the public's enthusiasm for high-quality events and proves that China has the soil to nurture high-quality events. Outlook for 2026: A big year for sports events, highlighting commercial opportunities On an international level, large comprehensive events such as the Winter Olympics, World Cup, and Asian Games are coming one after another, with the World Cup being jointly hosted by three countries for the first time and expanding to 48 teams, leading to a longer event period. The complexity of the joint hosting combined with the mature sports market in North America is expected to generate new commercial opportunities and investment themes in terms of operational coordination, cross-regional consumption linkage, etc., driving demand in various areas such as venue construction, sporting goods, outbound viewing, lottery, beer, etc., replicating the consumption frenzy of past events. On the domestic level, the rapid proliferation of the "Supe" model is taking place, and various provincial super leagues are entering a period of intense game schedule. The number of sponsors for the new season of "Supe" has significantly increased compared to last year, demonstrating strong fundraising capabilities, with other local events attracting sponsorships from large institutions such as banks. Drawing on the success of last year, the hosting of various local events is expected to continue to drive diverse consumption in the local area. Key risks facing the rating Macroeconomic fluctuations, policies falling short of expectations, commercial value of events falling short of expectations.