As indicated by the typical company data, the demand for golf club has been increasing gradually in the past several years. The increased demand has been driven by positive changes in macro-economy and demographic/housing factors.

Sector’s Current, Trend, Causes behind trend, and Future

Current and Trend

1. It seems that the demand for golf clubs has been stable and continuously growing in the past three years.

Causes behind the trend

1. The upward trend in this industry may be consistent with what is happening in other entertainment and leisure industries, which should have been driven by improvement in economy situation.

2. The most direct the drive may be housing market-new house built, which directly brings potential member of those clubs near the new built houses.

Industry Future

1. As upward trend in this industry continues, companies may be able to continue to see growth in their revenue as macro economy recovers gradually.

General Financial Performance of Companies In the Sector

It seems that the demand for membership of neighbour golf club in US market has been continuingly increasing in the past three years as indicated by increased same store membership of clubs for some of typical companies (more than 2% annually).

As revenue generally grows as a result of growth in the same stores revenue, companies have seen the improved numbers in their gross margins and thus profit. The typical gross margin is about 17% including depreciation, SG&A is about 8%, and operating margin is about 9% in 2018.

The typical enterprise price/EBI (adjusted with tax field) ratio is 28 and 32 (the acquisition price).

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