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EQS-News / 10/11/2017 / 23:07 UTC+8 *AGTech Holdings Limited Announces Third Quarter 2017 Results* _Strong Growth in Games & Entertainment_ (10 November 2017, Hong Kong) - *AGTech Holdings Limited* (SEHK code: 8279) today announced its financial results for the nine month period ended September 30, 2017. "AGTech delivered strong revenue growth of 64% for the quarter, driven by our newly launched Games and Entertainment division, which grew 180% over last quarter, demonstrating early success in many of new initiatives since becoming a member of the Alibaba Group," said John Sun, Chief Executive Officer of AGTech Holdings Limited. "We are pleased that results from our higher margin and highly scalable businesses are beginning to deliver meaningful margin uplift and improved financial results during the quarter." "We are highly encouraged by the positive reception of our proprietary games and entertainment platform that integrates popular entertainment content with various resources on e-commerce and e-payment platforms, and believe its unique value proposition will continue to accelerate growth for the company going forward." "Importantly, we continue to focus on innovations in product, channel, and business model across all of our divisions, working to leverage and integrate with both online and offline resources across Alibaba and Ant Financials, and those of suitable third party partners in China, India and beyond." *Key Financial Highlights* For the three months ended September 30, 2017: - Revenue was HK$120.1 million, an increase of 64% over revenue of HK$73.1 million generated in the third quarter of 2016. - Importantly, the increase in revenue was primarily driven by our new Games and Entertainment division, launched in the first half of 2017. - This division generated revenue of HK$42.8 million, an increase of 180% over last quarter's revenue of HK$15.3 million. - Revenues from this division represented 36% of overall revenues. - Gross profit was HK$62.5 million, increasing 260% over last year's HK$17.4 million in the third quarter of last year. - Gross profit margin was 52%, improving from 24% recorded for third quarter last year. - The increased sales with higher margin from the Games and Entertainment division primarily drove the increase in gross profit and gross profit margin. - Selling, general and administrative expenses was HK$96.7 million, compared to HK$101.2 million for the corresponding period in 2016. - Selling, general and administrative expenses included HK$28.8 million in share-based compensation, as compared to HK$13.8 million recorded during the corresponding period in 2016. Key Business Updates _Games and Entertainment_ Since launching our new Games and Entertainment division earlier this year, we have helped over 80 participating merchants promote over 500 attractive products on our games and entertainment platform on Alibaba's mobile Taobao channel, which has been used by over 15 million unique users to date. As with our casual and competition poker platform on Ant Financials' mobile Alipay channel, it offers unique entertainment content, such as social and casual games, as well as highly popular mind sports. These platforms, integrated with various resources on e-commerce and e-payment platforms, provide a unique value proposition and create a dynamic and mutually beneficial environment for users and merchants to interact with one another, helping to increase the quality and frequency of user-merchant engagement. We continue to believe that our games, entertainment and mind sports platforms are highly complementary to our lottery activities. With revenues from this division now accounting for 36% of total revenues in the quarter, and growing 180% from the previous quarter, we continue to be encouraged by the growth and scalability potential of these new initiatives, and will continue to invest time and resources to grow this division going forward. *Lottery Distribution * We continue to focus on product, channel and collaboration innovations in our Lottery Distribution division, with the goal of improving upon the appeal and access of lottery products to the end consumers in China, thereby helping to expand the lottery industry as a whole. This is evidenced by our continued collaboration with SF Holdings on the SF-Themed Instant Scratch Lottery product, our industry breakthrough initiative designed to fully leverage the vast network of SF Holding's vast logistics network in China. Since launching in July, we have further expanded the offering, which is now fully available across the four provinces of Guangdong, Jiangsu, Hunan and Jiangxi. In the first months of operations, we continue to improve upon our operations, providing training to SF couriers on lottery products and related sales techniques to assist in the marketing and selling of lottery products to the end customers. In addition, we began collaborating with provincial lottery administrators to market and promote the product to the public through events and media campaigns to raise the profile and popularity of the offering. SF Lottery is working with additional provincial lottery administrators to roll out this innovative product more broadly throughout the country in the coming months. We will also continue to explore new ways to collaborate with Alibaba's vast network of physical retail stores in order to develop new physical lottery distribution models, further broadening the reach of lottery products to new and existing consumers across the country. *International Business* Looking forward, we will continue pursuing opportunities abroad, globalizing our business by offering our proprietary systems and platforms, as well as operational and technical expertise, and strategically working with leading local partners in overseas markets such as India, South East Asia and beyond. In that regard, since announcing our joint venture agreement with Paytm, India's leading mobile payment platform, we have begun working to deliver a high quality games and entertainment platform tailored to the Indian consumers, which is expected to be launched by the end of the year. This collaboration lays the foundation for further expansion in the future as we continue to globalize our business in the future. *Note: Please refer to the company's Third Quarterly Results Announcement For The Period Ending 30 September 2017 for complete information, available on the Hong Kong Stock Exchange website at www.hkex.com. * *About AGTech* AGTech was incorporated in Bermuda and its shares are listed on the GEM of the Hong Kong Stock Exchange (Stock Code: 8279). The Group is an integrated technology and services company, principally engaged in the lottery and mobile games & entertainment market with a focus on China and selected international markets. AGTech is a member of the Alibaba Group, and is the exclusive lottery platform of Alibaba Group and Ant Financial Group. AGTech has a team of over 300 employees, and the footprint of the Group's business now spans across China and in international markets. AGTech's businesses are broadly divided into two categories: * Lottery (including games & systems, hardware and distribution); and * Games and Entertainment. AGTech is an associate member of each of the World Lottery Association (WLA) and the Asia Pacific Lottery Association (APLA), an official organizer and operator of the competition card games Guan Dan and Two-on-One poker in China, and an official partner of the International Mind Sports Association (IMSA). For more information, please visit www.agtech.com [1] *For investor enquiries, please contact:* AGTech Holdings Limited Carrie Yu (852) 2599 7109 Email: carriey@agtech.com Document: http://n.eqs.com/c/fncls.ssp?u=KCUNSBEQIG [2] Document title: AGTech Holdings Limited Announces Third Quarter 2017 Results 10/11/2017 Dissemination of a Financial Press Release, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement. 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(END) Dow Jones Newswires
November 10, 2017 10:07 ET (15:07 GMT)
