Member Info for Nickthesaint11

Https://substack.com/@wizardofwindsor/note/c-282699351?r=yqi60

A decade of geothermal beckons in the US:

https://oilprice.com/Energy/Energy-General/Geothermal-Could-Power-65-Million-US-Homes-by-2050-DOE-Says.html

Hey he made it through right?! :-) :-) https://www.youtube.com/watch?v=_5LdesoNFpY

I wonder if this is what happens with Proservice, they find themselves at the bottom of the canyon and then magically come through in a blaze of glory :-)

Turner Pope's Valuation is actually WAY HIGHER than first meets the eye:

https://wizardswinners.substack.com/p/metir-25p-95p-or-125p-the-great-valuation

Today's announcement was a bit of a nothing burger but the good news here is the company is bang on track.

Hard to disagree with JP2000's points below but we were a) spoilt with Ryan's numerous updates in the last couple of months and b) mining is a slow burn and also subject to far more stringent requirements than for tech with their wild capex spends (eg data centre buildouts). In short all mining companies have a high burden of compliance not shared by other sectors in the market.

We should nonetheless receive the Pilot Plant scoping study anytime soon, followed by the Maiden MRE for Teck Hughes.

Brief summary here for those interested:

https://substack.com/@wizardofwindsor/note/c-281807611

Two mighty canyons to cross and then the Promised Land?

https://wizardswinners.substack.com/p/this-company-wants-to-be-the-amazon

Interesting upside calcs: https://wizardswinners.substack.com/p/this-company-wants-to-be-the-amazon

FTSE All Share on Monday.

ASA International is now NASA International :-)

ASA technicals looking good, playing out per projections:

https://substack.com/@wizardofwindsor/note/c-277760366?r=yqi60

Https://open.substack.com/pub/wizardswinners/p/take-more-tekmar-flash-update?utm_source=share&utm_medium=android&r=yqi60

Article and valuation here:

https://open.substack.com/pub/wizardswinners/p/the-jewel-of-the-nile?utm_source=share&utm_medium=android&r=yqi60

You lucky lucky people :-)

https://wizardswinners.substack.com/p/cindrigo-should-i-go

I have done my best to address some of the queries on here in this Note:

https://substack.com/@wizardofwindsor/note/c-275624251

Suark, HUI10 is not aiming to or trying to compete with existing shops is because they could wipe put 200,00 shops overnight.

This is not within the terms of HUI10's agreement with the Chinese state / state bodies etc. The terms are to co-operate (support) the shops and all the local employment that they create. HUI10 is a partner, not a competitor. This is very important to understand.

The rollout then is a combo of physical and digital, with the digital supporting the physical and HUI10 taking a small commission each time. Ofc we know that the digital offers greater scalability and margin but that flows through in due course. This is designed to be win-win-win as the Chinese might put it, and this is actually a huge positive for IIG shareholders as it represents another moat.

Unlike SpaceX and all the other proposed tech ipos I guess pj :-)

Sorry I'm being flippant. I agree we would like to see revenue build and the company flip to fcf +.

My own numbers are based on 1) the rollout plan and speed, 2) the size of the market and expected demand, 3) competitors (there are none), 4) pricing & margins of each product / service.

I'm currently not getting FCF+ until 2028, when it will really gush (if it is able to execute and there are no holdups).

The investment style here is similar to investing in eg a miner, oil company or some kinds of tech company. We need to make a calculus of a steady state at maturity and work backwards from that, also working forwards from existing/bottom up data to optimise.

At the last (dated) data we are actually ahead of the fcf timeline, even if the Lucky Store rollout is behind (see comments below) bc the GTV growth has gone exponential.

When I did my first DCF the numbers went off the chart, they were crazy. This is because of the 'flywheel effect' or exponential function which derives from network effects. (Think Facebook when it started)

This phenomenon is actually being validated by the existing rollout data (see comment below).

I agree btw we need to be sceptical, we always want to see the money (myself, FCFs), but this is the nature of the opportunity. We are also beholden to full CFCA approvals, this is a constraint. We are investing in trust that China will indeed support HUI10, let's be realistic.

So it's probably not the kind of investment for someon looking for a mature business. This is a startup let's not forget. But the DCF numbers are being born out and even exceeded by existing data points (see here https://wizardswinners.substack.com/p/this-uk-smallcap-holds-all-the-cards ) . That said a HUI10 update would be most welcome.

Suark / AGBR, I get your scepticism about the latest numbers which appear to show a slowdown in rollout, in Lucky World this is the case but let's consider the following:

The lack of explanation for the Q1 slowdown is a fair criticism of management's communication. Going from ~200 shops a month to the 2,000+/month run-rate required to hit the 15,000 Q2 target is a massive step-function that looks highly improbable right now. Management has form for being optimistic on hardware timelines (they missed the 9k target for year-end 2025, only hitting it in early 2026).

But before concluding the story is broken, we need to look at why the rollout is slow, why the GTV is exploding despite the slow rollout, and the mechanical reality of that NAV markup.

1. The Rollout Bottleneck: Capex & Working Capital

Up until very recently, Hui10 was operating with a massive handbrake on: working capital drag. Under the old system, Hui10 had to pre-fund the lottery prize pools. This meant every new shop connected required a cash drain before it made a penny. The Yinsheng Payment facility (which removes the pre-funding requirement) only kicked in recently, and the Helikon £30m funding (which pays for the terminal hardware) is drip-fed based on regulatory milestones.

You cannot install 2,000 terminals a month if you don't have the cash to buy the terminals or the working capital to fund the transactions. The "snail-pace" isn't necessarily a lack of demand from shopkeepers; it's been a logistics and funding constraint. Now that the Yinsheng facility is live and Helikon cash is hitting the account (the first £5m tranche just landed in Jan), the physical capacity to deploy should accelerate. Will they hit 15k by June? Maybe not. But the ability to ramp is now fundamentally different than it was in Q1.

2. The Network Effect vs. The Physical Footprint

The most important data point in the interims wasn't the shop count; it was the GTV velocity. The commenter is looking at the 9,543 shops and seeing failure. The market should be looking at the RMB 674m GTV and seeing a network effect.

If shop growth is slow, but GTV is quadrupling, it means revenue per shop is exploding. The shops are not just selling paper tickets to walk-in traffic anymore; they are acting as digital nodes for the UnionPay QuickPass app. Hui10 is proving that a connected shop generates exponentially more digital volume than a disconnected shop. I'd much rather have 9,500 shops doing RMB 70m a month in GTV than 15,000 shops doing RMB 5m a month. The physical rollout is a lagging indicator of hardware logistics; the GTV per shop is the leading indicator of business viability.

3. The NAV Markup: "They got some balls!!"

The commenter is right that the 52% markup to £496m (taking total NAV to £498m) looks aggressive given the slow hardware rollout. But it's vital to understand how IIG values Hui10. Management didn't just arbitrarily decide to mark

Gotreal I got my AI to help with your post, I think this is possibly interesting:

The divergence between the hardware rollout (slightly lagging) and the usage/GTV velocity (massively outperforming) is the telltale sign of a digital network effect kicking in before the main catalyst has even arrived.

Here is why your observation is so critical to the bull case:

1. The "Physical vs. Digital" Disconnect

If Hui10 were just a physical POS terminal provider, GTV would be strictly tied to footfall in those 9,500 shops. But GTV is exploding at a much faster rate than terminal installations. Why? Because of the UnionPay QuickPass integration and the HongBao (digital red envelope) mechanism.

Users don't necessarily have to be standing in the shop to generate GTV through that shop's terminal portal. They can be sitting on their sofa using the UnionPay app, and the transaction routes through the Hui10 network. The market is valuing IIG based on the number of physical boxes plugged into walls, but the GTV data proves this is already a digital platform play. The physical terminals are just the regulatory on-ramps.

2. The GTV Ramp is Staggering

Let’s put that RMB 674m number in context.

In the 11 months to Nov 2025, GTV was RMB 212m.

By March 2026 (just 4 months later), the trailing 12-month GTV had jumped to RMB 674m.

The monthly run-rate is now hovering around RMB 60m–70m a month.

They are generating more transaction value in a single month now than they did in the entire first 11 months of the rollout. That is not linear growth; that is the exponential curve of a network effect.

3. Why the Hardware Lag Doesn't Matter (Yet)

You are right that the 15,000 shop target for mid-2026 and the UGO targets are aggressive. Supply chain logistics and shopkeeper onboarding take time.

But here is the beautiful part of the asymmetry: The GTV is exploding before the paperless MoF approval.

Right now, Hui10 is essentially operating with the handbrake on. The user experience is still slightly clunky because full paperless digital play isn't live yet. Yet, GTV is doubling in months.

If GTV velocity is this strong while constrained to a hybrid physical/digital model with only ~9,500 shops, what happens to GTV when:

The network scales to 15,000+ shops by summer?

The MoF approves full paperless play, allowing anyone with a UnionPay app to play instantly from anywhere?

The Takeaway

Your conclusion—"It’s all looking good from here"—is spot on, but I would take it a step further. The data is telling us that the demand-side risk (will people use it?) is effectively zero. The Chinese population is desperate for digital lottery access and is using Hui10’s platform the second it becomes available.

The only remaining risk is the regulatory timeline (the MoF approval). The market is pricing IIG as if the MoF will say no. The GTV data is screaming that the MoF practically has to say yes, because the public is already voting with its digital wall

The brokers imo have got it really wrong on the Servicable Addressable Market for HUI10. Their projection of a SAM of 30% of Chinese adults is not born out by comparables.

They base this on the 30% market size of UK adults playing the national lottery. But add in ALL lotteries and this rises to 50%. Remember the National Lottery in China is the ONLY lottery available in China, so the brokers have fluffed it on this one imo.

USA is 50%. HK is 60%. Singapore 70%. 'Chinese like to gamble' - it really does seem so (my wife is half Chinese).

Today, even in the provinces where the economy has crashed, Chinese play Mah Jong (and yes gamble even if it is illegal), and Mah Jong shops are the only retail outlet consistently growing. Even eateries are offering Mah Jong now. They do also play the national lottery where they can but access as we know is poor.

So when doing a DCF a 50% SAM (I am using) is not unreasonable as it is identical to US and UK and still below more profile analogues, ie ones with ethnic Chinese / ethnic Chinese mix players like HK, Singapore, Thailand etc

Just the Lucky World shops (the maths):

Currently, the 9,500 connected shops are generating about RMB 6,000 (£500) in lottery GTV per shop, per month. That's tiny.

But once Paperless Play goes live and people can buy tickets via their phones, we look at international benchmarks for digital lottery spend.

If a mature shop generates RMB 30,000 (£2,500) in digital lottery GTV per month:

Total GTV per shop per year = RMB 360,000 (£30,000)

Hui10’s Net Take-Rate (3.0%) = £900 Net Revenue per shop, per year.

Because this is an asset-light software platform, the incremental profit margin on this net revenue is roughly 50-60%. So, that's ~£500+ of pure free cash flow per shop, per year.

Now multiply that by the 200,000 shops in the network. That’s £100m+ in FCF just from the shops, before you even factor in the massive uptake from people playing on their phones at home via UnionPay QuickPass.

A big picture view of the IIG business case:

https://wizardswinners.substack.com/p/this-uk-smallcap-holds-all-the-cards