BUSINESS

AGTech posts loss, acquires Score Value; World Cup boosts 500.com Q3

TAGs: 2014 FIFA World Cup, 500.com, AGTech, China, score value ltd, sports lottery

china-sports-lottery-agtech-500-comAsian lottery technology provider AGTech Holdings Ltd. reported yet another significant loss in Q3. AGTech, the main provider of lottery terminals to China’s Sports Lottery Administration Center, reported revenue of HKD 53.1m (US $6.8m) in the three months ending Sept. 30, a 137% gain over the same period last year. But sales costs tripled to HKD 34.6m and the company made HKD 36.2m in payments to directors, resulting in a net loss for the period of HKD 48.3m.

AGTech recently acquired Score Value Ltd., which develops handheld lottery sale equipment and designs lottery games and systems in China. The total value of the deal is worth HKD 489.5m ($63.1m), of which HKD 239.5m is cash and HKD 250m is stock. Subject to certain operational targets, AGTech will also offer Score’s owners options for a similar amount of stock.

AGTech announced this week that its lottery hardware subsidiary Beijing AGTech GOT Technology had won competitive tenders to supply sports lottery terminals to the Sports Lottery Administration Centers in Henan, Jiangsu and Yunnan provinces.

Shenzhen-based online sports lottery operator 500.com also turned in its Q3 homework, showing revenue of RMB 187.6m ($30.6m), up 20.2% from Q2 and up 171% over Q3 2013. The second half of the 2014 FIFA World Cup resulted in record sales of RMB 2.2b for the quarter, up 7.2% sequentially and 205% year-on-year. Profits for the quarter came to RMB 39.6m ($6.5m), up 217% year-on-year but down 47.5% sequentially due to a 178% rise in operating expenses and RMB 40m in share-based compensation for the company’s employees.

500.com chairman/CEO Man Saw Law said his firm’s new mobile app accounted for “almost half” (actually 38.4%) of total sales. However, when you throw in the 9.4% of sales generated via the mobile website, Man’s math sounds a little more accurate. While the number of active mobile users was up only 3% from Q2, mobile sales rose 74.8% over the same period. With the next World Cup four years away, 500.com expects Q4 sales to cool somewhat to a range of between RMB 1.65b and 1.75b.

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