Hong Kong-listed AG Tech Holdings, part of China’s Alibaba Group, has reported a profit of HK$29 million for the year ended 31 December 2023, reversing a HK$131.1 million loss a year earlier thanks to strong growth across its Macau payment services and its China lottery services segments.
In a filing, the company revealed that group-wide revenues had increased by 69.7% year-on-year to HK$596.4 million, including a 43.3% year-on-year improvement in Q4 to HK$148.8 million.
Its electronic payment, comprising the provision of payment card services and ancillary services and the provision of e-wallet services in Macau, grew by 94.4% in FY23. This AG Tech said, followed the 2021 acquisition of Macau Pass, whose results were only fully incorporated into the group’s financial statements from March 2022, while an increase in Macau tourist arrivals lats year also boosted revenues.
The lottery segment, comprising lottery hardware sales and lottery distribution through physical channels and ancillary services across mainland China, grew by 40.7% to HK$232.8 million in FY23 and by 134% to HK$66.6 million in 4Q23. This, the company explained, was “mainly due to the increases in revenue from the sales of lottery hardware … [and] the provision of lottery distribution and ancillary services … as a result of the Group’s continuous effort in expanding its network of collaboration with retail sales outlets for lottery distribution and increase in lottery sales volume after the recovery from pandemic.”
Group-wide EBITDA of HK$39.5 million reversed a 2022 EBITDA loss of HK$37.7 million.
Looking ahead, AG Tech said it plans to “develop and create more diverse business scenarios within the e-commerce and digital media and entertainment landscape [and to] provide support for more electronic payment tools from overseas countries and regions to further facilitate the consumption of visitors to Macau, helping Macau’s economic development and digital transformation of merchants, in addition to exploring commercialization opportunities within the Macau electronic payment ecosystem and cultural and entertainment market.”
It will also continue to build on its market presence in the Chinese lottery industry, noting that efforts to partner with additional provincial lottery authorities of China in areas such as technology and business innovation, channel expansion and distribution, smart hardware terminals, data services, and other value-added ancillary services are all part of its lottery initiatives. “The Group will continue to explore lower-tier markets with its platform which is expected to be well equipped for applications within the Alibaba digital ecosystem, in addition to any potential change in distribution channels other than the current retail model,” it said.
“While the Group believes that the potential of internet and mobile distribution channels in the PRC lottery markets are promising, there is still uncertainty as to the timing of the potential re-opening of the online lottery distribution market under the applicable PRC laws and regulations. In this respect, the Group will continue to closely monitor policy developments.”
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