AGTech Holdings, a leading provider of games and systems to China’s Sports Lottery market, saw revenues fall 9% in 2013 to HK$208.4 million.
The Hong Kong-listed group (HKSE: 8279) blamed the decline on the decision to move away from its legacy lottery management business and into higher-growth technologies. The strategy has entailed higher costs as well as the company spent to expand on the mainland last year across a number of platforms. Gross profit declined 10% year on year to $91.3 million on a dip in gross margin of about 50 basis points, but Chairman and CEO John Sun said, “We are confident in the strong foundations of the business and are excited about the growth opportunities we see ahead in 2014 and beyond.”
By its own count, AGTech supplies approximately 50% of the Sports Lottery’s betting terminals and recently won bids to supply its new M6 terminal in Hebei and Tianjin. The company launched two virtual sports games into China last year—Lucky Racing and e-Ball Lottery—and is preparing to extend its reach into mobile games and sales.
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