AGTech announces its 2020 financial results

Chinese lottery technology company AGTech Holdings Limited has announced its final results for the year ended December 31, 2020.
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AGTech Holdings Limited, an integrated lottery, games and entertainment technology company in China, has announced its final results for the year ended December 31, 2020.

Drawing on figures published by the Ministry of Finance of the PRC, the firm reported PRC annual lottery sales in 2020 amounted to approximately ¥333.95bn, a decrease of approximately 20.9% over 2019.

The Welfare Lottery amounted to approximately ¥144.48bn, a drop of around 24.4% compared to 2019. Meanwhile, the Sports Lottery achieved sales of approximately ¥189.46bn, down circa 17.9% in comparison to the previous year’s figures.

Group revenue for the year amounted to approximately HK$161.6m, a decrease of approximately 7.7% over the corresponding period in 2019. Contributions were mainly derived from lottery hardware, lottery games and systems, provision of lottery distribution and ancillary services, games and entertainment business in the PRC.

The revenue decrease was primarily caused by a slowdown in sales of lottery hardware of approximately HK$31.4m, partially offset by an increase of nearly HK$8.8m from games and entertainment business and growth of almost HK$6.2m from the provision of lottery distribution and ancillary services.

AGTech blamed the decrease in revenue from the hardware business on a significant drop in total national lottery hardware tenders during the year, slower tendering processes and hardware deliveries year-on-year as a result of the COVID-19 pandemic.

The increase in revenue from the games and entertainment business was caused by an uptick in content provision revenue from the Paytm First Games platform in India. Operating loss for the year was approximately HK$131.1m, a decrease of 32.7% over 2019.

On 23 October 2020, the Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sport of the PRC announced the Joint Notice concerning the proposed cessation of the sales of quick-draw welfare lottery games and high-frequency sports lottery games from November 1, 2020, and after the Chinese New Year of 2021.

Accordingly, the sales of ‘Lucky Racing’ and ‘e-Ball Lottery’ ceased on their respective effective dates. For the full year, the revenue attributed to Virtual Sports Lottery Games was approximately HK$46.3m, representing approximately 28.6% of the total revenue of the firm.

AGTech’s Hardware division primarily supplies terminals to the Sports Lottery and the Welfare Lottery and has hardware deployed in multiple provinces, cities, municipalities and autonomous regions across China. In 2020, it won 16 lottery hardware tenders to supply lottery terminals to the SLACs in Anhui, Shanxi, Hubei, Jilin, Guizhou, Tianjin, Inner Mongolia, Hebei, Fujian, Sichuan, Zhejiang, Henan and Shaanxi provinces of the PRC, accounting for over 21% of the overall sports lottery traditional terminal tenders in the country during the same period.

The group did well in new android sports lottery terminal tenders in China, winning over 66% of bids during the same period. These further strengthened its position in the country’s lottery hardware market and demonstrated the continued competitiveness of its lottery terminals. It will look to pursue tenders and bid for new contracts as activity resumes post COVID-19 delays.

AGTech also promised to proactively transform and build on its position within the Chinese lottery industry. As the exclusive lottery business platform of Alibaba Group and Ant Group, it expects to further align and benefit from synergies created through cooperation with those groups.