Intuitive Investment Group Regulatory News (IIG)

14 May 2024

Intuitive Investments Group plc

("IIG" or the "Company")

Significant progress in delivery of Hui10 strategy

Intuitive Investments Group plc (SFS: IIG), the closed-end investment company focussed on fast growing and high potential opportunities in the Technology and Life Sciences sectors, announces the following update in respect of its largest single investment, Hui10 Inc. ("Hui10"). This follows the significant investment in Hui10 Inc by IIG in October 2023.

Hui10 is a technology company with two operating businesses, Huishi Dehua and Huishi Chunyuan ('Lucky World'), involved in the digital transformation of the Chinese lottery.

The agreements, contracts and approvals outlined below are key stages of Hui10's roll-out plan to deliver Hui10's strategy for the digital transformation of the Chinese lottery. Successful execution of the strategy will enable the delivery of significant revenue growth and value upside for IIG investors.

Summary of Hui10 progress

Sir Nigel Rudd, Chairman, said: "Since the transaction with IIG in October 2023, Hui10 has successfully executed its strategic roll-out plan, positioning the business for the key next stages of the digital transformation of the lottery. We look forward to Hui10 delivering significant revenue growth through PELT, HongBao, UGO and Lucky World, while also building the foundations for paperless lottery play in China."

PELT

Hui10 has signed an agreement with China's largest travel company, Qunar, and will commence PELT promotions to their over 500 million customers from mid-June 2024. This follows the announcement on 27 February 2024 that Huishi Dehua has secured official authorisation from the National Sports Lottery, alongside contracts with UnionPay, to allow their PELT platform to be deployed nationally. This marks the start of a series of agreements expected to be signed with UnionPay member merchants, as the pace of the PELT roll-out accelerates.

PELT enables all UnionPay's member merchants, including banks, mobile phone network operators, insurance companies, utilities, travel companies, airlines, food chains and retailers operating loyalty programmes, to provide their customers with the ability to redeem their loyalty points for digital QR code vouchers for lottery play. The PELT platform is now fully functioning and available in all Sports Lottery shops in China, meaning users exchanging their loyalty points for digital QR code Sports Lottery vouchers can redeem them for lottery play at any one of the c. 175,000 Sports Lottery shops. PELT is a significant opportunity for new customer acquisition, allowing Hui10 to grow a substantial registered user base to which it can offer additional products and services.

UGO Scratch

Hui10 has signed a national contract with China Communications Information Co., part of the Ministry of Transport and China Civil Aviation Information Co., who oversee the running of all public ride hailing services, including taxis, intercity buses and coaches and ferries, to implement UGO POSLot scratch card sales in all taxis. Alongside this, the National Sports Lottery Centre and Shanxi Sports Lottery Centre have also approved UGO ride hailing scratch card sales.

This development allows Hui10 to roll out terminals into taxis to sell scratch cards across China, initially in Shanxi. It is expected that by December 2024 there will be over 25,000 terminals installed with the target to increase to over 1.5 million over the next 3 years. UGO is an opportunity to expand the POS terminal lottery sales network infrastructure to provide new previously geographically excluded players the ability to participate in lottery play generating incremental income, whilst also building a network of UnionPay POS terminals, capable of processing paperless lottery sales.

Paperless Lottery Play Framework

Framework Cooperation Agreement dated 7 May 2024 with CFCA to:

This follows the signing of key agreements with China UnionPay and both the Sports and Welfare Lotteries to develop and launch the UnionPay QuickPass POSLot platform.

This is a fundamental stage in the development of paperless lottery play in China and the foundation to the delivery of the necessary regulatory changes to facilitate fully online, anywhere, lottery play for the first time in potentially the world's largest lottery market.

The CFCA is the national authoritative security certification agency established in 1998 under the leadership of the People's Bank of China and approved by the National Information Security Management Agency and Ministry of Finance, responsible for financial information security infrastructure. As of now, more than 2,400 financial institutions use CFCA's electronic certification services, accounting for 98% of the banks using digital certificates and is the largest electronic certification service organization in China.

Lucky World

Lucky World was created to help the network of c. 175,000 dedicated lottery shops to increase their revenues, by providing each lottery shopkeeper with an omni-channel store, in order for them to sell Lucky World sourced Fast Moving Consumer Products ("FMCG") to their existing c. 100 million customers.

Lucky World has commenced its roll-out, connecting to all lottery shops equipped with a UnionPay HongBao POSLot terminal. Lucky World has also created a franchise model for its flagship lottery stores, the first being the capital city in Hebei province with a population of c. 11 million people. China Mobile and China State Farms Alliance have taken floorspace and where global and domestic brands will be ranged.

Furthermore, Lucky World has entered into a contract with China Agricultural Reclamation Group Co., Ltd a state-owned enterprise also known as China State Farms Alliance ('CSFA') and is the largest landowner in China. CSFA is a trusted brand in China, well known for selling good quality reasonably priced products. It is licensed to import foreign products, from wine and liquor to rice, pulses and dairy products.

This Agreement gives product range access and brand usage rights for Lucky World omni-channel lottery shops, and import and customs clearance for foreign goods, together with access to CSFA supply chain and logistics. CSFA also wish to participate in Lucky World Flagship Stores nationwide.

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About Intuitive Investments Group plc

IIG is an investment company seeking to provide investors with exposure to a portfolio concentrating on fast growing and/or high potential Life Sciences and Technology businesses operating predominantly in the UK, continental Europe, the US and APAC, utilising the Board's experience to seek to generate capital growth over the long term for shareholders.

About Hui10

Hui10 is a technology company with interests in two operating businesses, Huishi Dehua and Huishi Chunyuan ('Lucky World'), involved in the digital transformation of the Chinese lottery. Huishi Dehua enables the market expansion of the Chinese lottery through its proprietary technology platform. Huishi Dehua is integrated into China's national card settlement system and payment platform, UnionPay. Hui10 holds a 33% share in Huishi Dehua. Lucky World is an ecommerce platform which provides China's existing lottery shops access to a wider fast-moving consumer goods product offering. Hui10 owns 60% of Lucky World.