Can someone tell me which this sentence is supposed to mean, "The winner of THAT tennis competition" or "THAT winner of the tennis competition"? or it can be interpreted both ways?
I guess it can be interpreted both ways, but in general, the word "itu" (or "ini") at the end of a nominal phrase would refer to the main word, in this case "pemenang".
It's the latter. "The winner of that tennis competition" is "Pemenang dari kompetisi tenis itu".