China Vanguard said its revenue fell 68.5 percent in the six months to end-December due to a slowdown in lottery sales in China and no contribution from its property-related businesses.
The group had revenue of HK$21.2 million ($2.7 million) in the period, compared with $67.2 million in the same period the year before. It posted an unaudited loss attributable to the equity holders of HK$25.8 million, compared with a net profit of HK$15.1 million the prior year. Selling and distribution costs and administrative expenses increased by 9.3 percent to HK$47.4 million.
China’s lottery sales for 2015 fell by 3.8 percent year-on-year to RMB 367.9 billion, harmed in part by the slowing Chinese economy. Sales revenues from the Sports Lottery fell by 5.7 percent and revenues from the Welfare Lottery declined by 2.2 percent.
Although not directly involved in Internet lottery sales, China Vanguard said the ongoing review by the central government into online sales was also affecting market sentiment, with service income from store rollouts and new store openings slowing down.
However, China Vanguard remains optimistic about future prospects for China’s lottery market.
“The group is of the view that the slower growth is only temporary to the extent that it shall foster a key opportunity for the group to tap into potential collaborations between industry players, and shall enable the group to take advantage of potential acquisition or expansions opportunities should they present themselves.”