For Immediate Release
V1 Group Expects Positive Gross Profit for FY2019
Crazy Sports and E-commerce Businesses
Both Delivered Impressive Results
(Hong Kong, 5 March 2020) - One of China's top 100 internet companies, V1 Group Limited ("V1 Group" or the "Company", together with its subsidiaries, the "Group"; stock code: 00082.HK), today announced that based on the preliminary assessment of the unaudited management accounts of the Group and the information currently available to the Board, a positive gross profit is expected to generate for the year ended 31 December 2019 ("FY2019") of no less than HK$100 million, representing a radical change from a gross loss of approximately HK$32.6 million for the year ended 31 December 2018, and the net loss attributable to owners of the Company for FY2019 is expected to decrease by approximately 70% year-on-year.
According to the announcement, the decrease in net loss and the positive gross profit generated in FY2019 were mainly attributable to the full year financial performance of Beijing Crazy Sports Management Company Limited ("Crazy Sports") consolidated in the financial statement of the Group in FY2019; among the Group's core business, the e-commerce business achieving higher gross profit and gross profit margin year over year despite a reduction in sales revenue; and the significant decreases in impairment of intangible assets and goodwill during FY2019.
The Group has announced previously that the net profits of Crazy Sports for FY2019 has exceeded the guaranteed profit of RMB50 million as stipulated in the acquisition agreement. Leveraging on the Group's sports lottery big data vault, user resources and digital analytics capabilities that has been developed over the past decade, including over 200 million online user resources as well as the core resources of the historic results of tournaments and matches accumulated through the China Soccer Lottery ("中國足彩網") website and Lottery 365 ("彩票365") app, Crazy Sports was able to build and develop into China's largest and most distinctive sports community over the year.
This is the first time that the Company is incorporating the full year financial performance of Crazy Sports into the Group's results, and its businesses have clearly become a major revenue contributor for the Group. Said businesses include the Crazy Recommendation ("瘋狂紅單") app, a paid sports and lottery information platform, its live-broadcasting and interactive services platform, and sports mobile games development and operation business, which all delivered satisfactory results.
Meanwhile, in the second half of the Year, the Group has started its sports lottery new retail business, which has adopted a new light-asset lottery sales model. The business has made remarkable progress and has started to generate revenue for the Group. The Group was able to develop a physical lottery retail network quickly to attract more offline traffic which it can then convert into online users, while also redirecting existing online users to offline outlets, thus achieving O2O user redirection and maximise revenue. The Group believes that the lottery new retail business has potential for exponential growth and will become a major growth driver.
The Group's long-standing efforts in cultivating the internet industry has led its e-commerce business to deliver better results. The Group's e-commerce business was able to achieve higher gross profit and margin year over year, bringing the Group closer to actualising a profit.
Dr. ZHANG Lijun, Chairman and Executive Director of V1 Group Limited, said, "The Group is pleased to report a significant reduction in net loss after dedicating efforts to reallocate resources and maximise profits. The Group is now in a good position to fully execute its strategies to integrate, rejuvenate and innovate its old and new businesses. Through the acquisition of Crazy Sports, the Group was able to further capitalise on its vast user community and big data vault, which has always been part of our core competitive advantage. Looking ahead, we are confident that leveraging on our digital capabilities, we can continue to perfect our culture and sports ecosystem, taking the Company around to generate positive profits."
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About V1 Group Limited
V1 Group Limited first commenced its internet video business in 2005 and became listed on the Hong Kong Stock Exchange in 2006. Since then, its business has evolved to principally engage in internet businesses with a focus on the Chinese sports industry, including internet audio-visual new media, sports lottery new retail, online trading platform and other internet businesses in the PRC and a satellite TV station in Dubai, UAE. As one of China's top 100 internet companies, the Group leverages on its digital capabilities and edge as well as its online and offline sports and video communities to form a culture and sports ecosystem. Guided by sports marketisation, connectivity and digitalisation, the Group is committed to provide reliable sports products and services for the vast Chinese sports enthusiasts.
For more information, please visit ir.v1group.com.hk.