HONG KONG, Dec. 8, 2020 /PRNewswire/ -- V1 Group Limited, ("V1 Group" or the "Company", together with its subsidiaries, the "Group"; stock code: 00082.HK) today announced a business restructuring plan which will make explicitly Crazy Sports as the principle business of the listed Company; the plan involves disposal of China Arab TV and the telemedia business and discontinuation of the e-commerce business Liangzi Port. As China's leading sports lottery and entertainment platform, Crazy Sports will continue to thrive, amalgamates its online sports lottery paid knowledge, sports events information and offline retail sales model of lottery tickets, positioning itself as "first internet sports concept stock" and focusing its resources on the sports sector in China.
To reflect the Group's new business focus, the Board of Directors has proposed to change the Company's English name from ''V1 Group Limited'' to ''Crazy Sports Group Limited", subject to approval by shareholders in the annual general meeting 2021. This restructuring has also reshuffled management of the Company in pursuit of going younger and more professional. The Company's core management will be beefed up with senior talents previously worked with major investment banks, in the lottery and internet businesses, managing and operating businesses in sports industries with professional knowledge and success experiences, supporting the Company's further development in the future.
In addition, the Company will raise up to HK$48 million through conditional placing of 215,180,180 new shares to placees at HK$0.222 each after the close of trading today. Net proceeds raised from the placing will be used for the business development of Crazy Sports and for the general working capital of the Group. We will focus on accelerating the establishment of the Group's sports lottery retail sales network, developing the sports entertainment new business, allowing the Crazy Sports business to nurture a rapid development trend, consolidating the Group's leading position in the sports lottery and entertainment market in China.
The restructuring of the telemedia business segment involves primarily divestures of the Group's telemedia platform equipment and the Dubai-incorporated bilingual satellite TV channel China Arab TV and other investments to a third-party fund to be managed by a more professional team to better survive and develop in a clean slate to generate promising return to the fund and the Group. On completion, the financial results, assets and liabilities of these businesses will no longer be consolidated to the Group's accounts. The Group will hold a limited partnership interest in the third party fund as long-term equity investments. Concurrently, since the e-commerce business has been operating in a challenging and competitive environment and thinning profit margins, the Group has decided to discontinue operation of the consumer electronic product digital trading platform under Liangzi Port.
Crazy Sports Becomes the Principle Business of the Listed Company
Crazy Sports Group is a leading sports lottery and entertainment services operator in China. It comprises (i) Crazy Red Insights APP, a paid sports lottery information services platform, (ii) Crazy Sports APP, a sports events information, live-streaming and social interactive platform; (iii) online mobile interactive game applications, and (iv) a new strategy in the provision of sales services of lottery tickets and related auxiliary services through nationwide retail channels in China. As a listed company leading the sports lottery industry, the Group has over ten years of rich experience in managing sports lotteries, and has been managing successfully platforms including "Lottery 365", the largest lottery smart phone customer interface and the "China Soccer Lottery" website, with some 200 million users resources, contributing to a major user community and registered user database for the Group to develop unique core competences. According to an industry report prepared by China Insights Consultancy ("CIC Report"), the paid sports lottery information services of Crazy Sports ranked first in China in terms of revenue in 2019. For the nine months ended 30 September 2020, Crazy Sports recorded a revenue of HK$244.5 million and gross profit of HK$96.5 million. The business experienced significant developments, including expansion of sales channels of Crazy Red Insights to 24 media platforms with high users traffic; addition of renowned cooperation partners with a total of 18 business partners covering no fewer than 20,000 retail sales points, major convenient store chains and supermarkets in China for lottery sales. The Group has also launched official smart phone tournament games for the China Premier League, and has established a presence in Hainan Province to capitalize on the new polices there to develop its sports entertainment project.
According to the CIC Report, China's sport lottery industry is projected to increase from RMB230.8 billion in 2019 to RMB395.5 billion in 2024 in revenue, with event-based sports betting lottery to be catalysed further by major sports events including UEFA Euro, FIFA World Cup and Olympics in 2021 and 2022, which are expected to substantially facilitate the sales of sports betting lottery, creating opportunities for Crazy Sports to accelerate the development of its sports lottery and entertainment ecosystem, and to create major opportunities for provision of one-stop online-to-offline sports entertainment venues for users.
Dr. ZHANG Lijun, Chairman of V1 Group Limited, said, "This round of restructuring for V1 Group is based on 'streamline first, scale up next' guiding strategy. First, we divest from unprofitable businesses. Building on Crazy Sports as our principle business, we are positioning ourselves as China's largest sports lottery and entertainment operator that combines sports lottery online information services and offline lottery points of sales. Upon completion of the restructuring, V1 Group will be more precisely positioned in the market, a business model featuring rapid growth. Coupled with brand influence, market share, and large user volume and data. we will continue to reinforce our progress and scale up our businesses to capture more market share."
Dr. Zhang added: "Next year and the following year will be big years for sports, especially when the pandemic is over, sports consumption will usher into a period of retaliatory growth. Crazy Sports will capitalize on the big years for sports to achieve rapid growth in revenue and profits. The Group will actively align with China's 14th Five-Year development plan and the relevant policies of the State Sports General Administration on vigorously developing the sports industry, combining with core competences of Crazy Sports, so as to achieve exponential growth in market share and profits! I am confident that after this restructuring, V1 Group will experience scalable growth as a listed company, and bring to shareholders lucrative returns."
About V1 Group
V1 Group is a top-100 internet enterprise in China and a leading sports lottery and entertainment platform in the country. It operates sports lottery new retail business and sports related entertainment services through Crazy Sports Group which comprises (i) Crazy Red Insights APP, a paid sports lottery information services platform, (ii) Crazy Sports APP, a match information, live-streaming and social interactive platform; (iii) online mobile interactive game applications, and (iv) a new strategy in the provision of sales services of lottery tickets through nationwide retail channels in China.
The Group is the biggest internet lottery players sports community and lottery information distribution platform in China. Guided by sports marketisation, connectivity and digitalisation, we are dedicated to forge a comprehensive culture and sports ecosystem to provide reliable sports products and services for the vast Chinese sports enthusiasts.
