V1 Group achieved business turnaround and completed restructuring in 2020
Focus on sports quiz, set to become a leading digital sports entertainment group in China
HONG KONG, March 19, 2021 /PRNewswire/ — V1 Group Limited, ("V1 Group" or the "Company", together with its subsidiaries, the "Group"; stock code: 82) announces today its audited results of the year ended 31 December 2020.
From the acquisition of Crazy Sports in 2018 to the completion of restructuring by end 2020, the Group divested its telemedia and e-commerce businesses, then landed a foothold in Hainan and secured approval for sports quiz business; it then signed an agreement with FIFPro, together with China Super League gaining top football IPs. Having been nurtured for three years, Crazy Sports has evolved into the core business engine of the Group, and is progressing towards its goal of becoming the leading digital sports entertainment group in China.
In 2020, all business segments of Crazy Sports grew rapidly. Crazy Sports continued to focus on product innovation and user experience enhancements despite in the middle of the pandemic:
- Crazy Red Insights continued to expand its cooperation with other channels. It has entered into agreements with approximately 27 platforms with high users traffic, featuring sports lottery paid contents and video and audio productions.
- Some 18 convenience store chains signed contracts with the Group, targeting at seizing larger shares in the market. The number of convenient stores reached will hit the 30,000 mark to entice new lottery buyers. Cooperation with 1,003 retail points of sales in total had been reached by end-2020, among which, a single store hitting highest single-store-sales mark of almost RMB20,000 per month.
- Crazy Sports entered into an agreement with an international sports organization – Fédération Internationale des Associations de Footballeurs Professionnels (FIFPro) for official IP rights and getting ready to roll out its UEFA Euro strategy. Together with the official IP rights from China Super League, Crazy Sports will launch a variety of sports mobile games.
- Crazy Sports has secured approvals from relevant authorities in Hainan Province to develop a sports quiz platform and reward points system in Hainan driven by blockchain technology. Efforts preparing for the commencement of this business segment have been progressing vigorously, including a new online membership bonus points system and a gift redemption system at the e-store on the live-streaming interactive platform of Crazy Sports, aiming to foster users engagement, thus firming the footing for building an integrated sports and entertainment platform featuring games information, games prediction, live broadcasts and sports communities in 2021.
During the year under review, revenue generated from continuing operations reached HK$300.8 million, up 61.7% from 2019. The increase was driven by sports games as a result of higher consumer spending when the home-stay order was in force during the first half of 2020. The resumption of sports events in the second half of 2020 spurred online consumption of sports and sports lottery information and commissions generated from offline sports lottery sales services.
Gross profit from continuing operations was HK$130.7 million, representing a gross profit margin of 43.5%. Operating profit from continuing operations of HK$68.5 million, comparing with the adjusted loss of HK$97.3 million in continuing operations during 2019. The Group had thus accomplished a turnaround to return to profit at the continuing operations level, showcasing profit prospects of Crazy Sports and the Group’s strategic investment portfolio. This is an important starting point for the Group’s financial performance in the future.
The segment assets of the Group’s sports and lottery related business stood at HK$581.8 million, with return on assets reached 11.8%.
An one-off loss had been incurred from the discontinuation of telemedia and e-commerce business subsequent to the restructuring in 2020. Relevant intangible assets and goodwill were fully written off in 2020. Loss for the year was HK$131.3 million.
In addition to its core business, the Group’s strategic investment portfolio was valued at HK$423.4 million. The Group received dividend income totaled HK$46.0 million, providing it with a solid asset base and investment capital returns. After restructuring, the Group’s asset structure confers higher clarity with asset-light properties and low gearing.
The Board has proposed to change the English name of its Company to "Crazy Sports Group Limited", while its Chinese name to "瘋狂體育集團有限公司", subject to shareholders’ approval in the upcoming annual general meeting in May. From 2021 onwards, Crazy Sports will deepen implementation of the following growth strategies: pursuing establishment of a blockchain-driven sports quiz platform and reward points system; accelerating the rollout of sports lottery retail points of sales across the country; reinforcing the leading position of Crazy Red Insights paid information, developing a number of sports-themed games by exploiting core IP rights; investing in technological and big data capabilities, and enhancing the brand awareness of Crazy Sports by implementing marketing strategies. The management is confident in mobilizing platform user resources, attracting new lottery players and the younger generation to expand the monthly active user base, encouraging user participation within the Group’s ecosystem, achieving monetization by cross-selling and expanding the paid user base of the platform.
V1 Group CEO Mr. Peng Xitao said: "The sports lottery market is characterized by strong end-user demand. In addition to regular matches like Premier League, top five leagues in Europe and NBA, etc., 2021, 2022 and 2023 will see hosting of UEFA Euro, Copa America, Tokyo Olympic Games, Qatar World Cup qualifier, World Cup, Beijing Winter Olympic Games, FIFA Club World Cup, Asian Cup and other sports events. Opportunities in the sports industry are enormous. Hainan Province is regarded as a showcase region for the sports industry in China, creating exponential opportunities. Combining the future development positioning of Hainan Province and the favorable policies by the Central Government, the project approval for Crazy Sports to establish a blockchain-technology-driven sports quiz platform and reward points system in Hainan will strengthen our competitiveness, creativity and operation efficiency. This is our key strategic foothold in the sports industry, representing a major development opportunity in history for us."
V1 Group Chairman Zhang Lijun said: "Crazy Sports is integrating resources, as supported by Hainan sports quiz qualification, leveraging advanced blockchain technology, comprehensive application of core competitive capabilities including vast lottery user resources, massive big data and top football IPs, to become an operator that provides sports lottery paid information services, sports social interactive platform, sports quiz, sports-themed games, as well as offline sports lottery sales services. Through a comprehensive online and offline sports community ecosystem structure, it facilitates exponential user growth, establishing a user redirection and synchronized consumption business model. The commencement of ”14th Five-Year Plan” will see the sports market targeting to reaching a size of RMB5 trillion by 2025. Sports lotteries represent our vital foray into this trillion-yuan-worth sports market in China. With Crazy Sports’ edges accumulated over the years and opportunities afforded by the sports quiz business in Hainan and adhering to our corporate mission of "Let Sports Create Happiness", we are determined to tap this trillion-yuan sports industry, aspire to evolve into the largest sports entertainment group in China and make our shareholders proud of and confident in themselves!"
About V1 Group
V1 Group is a leading sports lottery and entertainment company China. The Group, through Crazy Sports, operates: (i) Crazy Red Insights APP, a paid sports lottery information platform, (ii) Crazy Sports APP, a match information, livestreaming and social interactive platform and China Soccer Lottery website; (iii) mobile network interactive game applications, and (iv) provision of sales services of lottery tickets through nationwide retail channels in China.
As an internet sports entertainment community and lottery information platform in China, guided by sports marketisation, connectivity and digitalisation, we are dedicated to forge a comprehensive sports entertainment ecosystem to provide reliable sports products and services for the vast Chinese sports enthusiasts.
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