9 Dec 2014 07:00
9 December 2014
DJI Holdings plc
New offline-to-online (O2O) sports lottery contract with Heilongjiang Province and commencement of live trials of virtual horse racing game
DJI Holdings plc (AIM: DJI, the "Company", "DJI"), a leading licensed and authorised provider of regulated lottery products in the Chinese lottery market, is pleased to announce that its subsidiary, Harbin Tengcai Technology Development Co. Ltd. ("Harbin"), a division of Beijing New Net Science & Technology Development Ltd ("New Net")), has been selected by the Heilongjiang Sports Lottery Administration Center ("HSLC") to supply and operate a Sales-Assisting Administration System (offline-to-online, or O2O system) for HSLC sales outlets using the official Heilongjiang Jingcai website as the platform.
This new platform will create a link between the traditional offline lottery sales and the fast-growing online lottery channel by increasing access and availability of lottery games for players. This agreement has been entered into under the principle of growing sports lottery sales in Heilongjiang province, based on the Administrative Regulations on the Issuance of Lotteries promulgated by the People's Republic of China's ("PRC") Ministry of Commerce. It will allow the Company to transact directly with several hundred thousand new players who purchase lottery on a daily basis.
Heilongjiang province, located in the far north east of China, has approximately 5,000 independently operated sports lottery stores, many of which are hard to access in the extremely cold winter months. Although the O2O System was originally created to facilitate playing during this period, the commercial scope has been expanded considerably to be year-round and to include all sports lottery games, including Jincai (sports betting) games, which are currently available at fewer than 10 per cent of these outlets. Online Jincai is the fastest growing lottery offering in the PRC market today.
Under the two year agreement, Harbin is expected to share its commission with referring lottery store operators and will seek to increase that footprint further by expanding to include non-lottery retail outlets wishing to benefit from the sale of lottery products to their large customer bases. By introducing online sports betting and other lottery products to a much wider audience, while cooperating with store owners, New Net will be well placed to reach out to the circa 75 per cent of lottery players in China who, according to research by Forrester, would buy online, if accessible. Similarly, circa 40 per cent of players would like to buy on mobile.
In a separate important development, our previously mentioned high-frequency virtual horse-racing game has now been approved by HSLC to progress to the final pre-application stage. A live in-store trial is being set up in 40 outlets in Heilongjiang Province at the start of 2015.
Commenting on these milestones for the Company, Darren Mercer, Chief Executive Officer of DJI Holdings PLC, said:
"Both of these developments represent the continued execution of our strategy as outlined at the time of our IPO in July. Given our long term objectives to be a leading player in this industry, it is important that we continue to create opportunities for growth not only by increasing our channels to market (consumer convenience and access), but also by leading through the provision of new and valuable games (content).
These projects represent very exciting opportunities for DJI. Heilongjiang sports provides us with access to a significant number of daily lottery players and an excellent reference point to assist in our ongoing discussions with other provinces. We continue to benefit through new revenue opportunities building on our existing technology platform. We look forward to both of these initiatives contributing to our performance in 2015."
For further information please contact:
DJI Holdings plc | +44 (0) 1565 872990 |
Darren Mercer, Group Chief Executive Rodney Davis, Chief Financial Officer | |
IHA Consulting | +44 (0) 20 3393 1185 |
Stephen Benzikie | |
Canaccord Genuity Limited (NOMAD and Joint Broker) | +44 (0) 20 7523 8000 |
Simon Bridges/Cameron Duncan | |
Note to editors
DJI's strategy is to capitalise on the rapidly expanding Chinese lottery market and the opportunity to deliver lottery ticket fulfilment sales to its substantial client base of large Chinese corporations (B2B) and individual consumers via the Group's owned and operated websites (B2C), within the online and mobile environment.
Through the Group's long-standing relationships with the Chinese regulators, portfolio of lottery contracts and reliable technology platform, the Group is well-positioned to capture the market opportunity.
The principal activities of the Group are the development, promotion and distribution of authorised lottery products in China. DJI's subsidiaries are licensed and/or contractually authorised to distribute and promote Sports and Welfare lottery products online, via mobile and through physical retail outlets across China.
The Group has a differentiated approach to the Chinese lottery market in that DJI operates throughout the promotion and distribution value chain. The Group offers:
· front-end lottery ticket sales via websites owned and operated by the Group, third party websites, mobile applications and physical retail outlets; and
· back-office lottery ticket fulfilment services to large online and offline