vodone now seeks licence to sell lottery

It seems China is restructuring its lottery business by issuing licences to suitable retailers and seems that VODone is now seeking a Licence in order to sell lottery.

The chairman seems positive they will be granted a licence and predicts that the revenue will surpass the tele media business.

"Once we have the license, our income from lottery related business could easily surpass the income from tele-media business and become a major revenue source."

So from the report:

"For the six months ended June 30, VODone's tele-media business recorded revenue of HK$93.27 million, down 68 percent from a year ago"

From this VODone makes on average $100m per annum from telemedia. Zhang predicts the lottery business will surpass this so say $150m per annum.

Smarttrans will receive a percentage of 5-7% (based on previous company reports).

So as an estimate based on these figures as a minimum Smarttrans should see revenue of around $5m per annum as a minimum from future sales. This alone is a company changer and based on this we could see a SP of around 11-12c in 12 months as a very speculative prediction.


http://www.chinadaily.com.cn/hkedition/2012-11/09/content_15898897.htm


VODone, a state-affiliated new media company in China, will launch a new platform for news videos on November 15, expecting it to give a major boost to its online advertising revenue, its chairman Zhang Lijun told China Daily.
Zhang said the company, which currently has over 50 editing stations across the country to download and edit news programs provided by TV stations of over 30 provinces and 300 cities, expects to increase the editing stations to around 300 by the end of June 2013.
"These videos will be uploaded to our new platform, the Cloud (a model of networked online storage where data is stored in virtualized pools of storage), so, technically, our audience can watch almost any aired news program from our portal," said Zhang.
Zhang said that in the first half of this year, the company received 60 percent of its advertising revenue from traditional advertising, such as billboards advertisement in subway stations.
"The business of traditional advertisement is only temporary ," he said, "after all, we are a new media company, (and) we want to focus on our main (new media) business."
Zhang said the company will fade out from the traditional advertisement business after the Cloud platform is launched.
For the six months ended June 30, VODone's tele-media business recorded revenue of HK$93.27 million, down 68 percent from a year ago, the company said, adding that the revenue plunge was mainly due to the deterioration of the general business environment on the mainland during the period, resulting in a decline in the relevant advertising and service income.
Zhang said that during an economic downturn, companies usually cut their spending for traditional media advertising, but not for online media, which is the reason VODone wants to focus on the online business.
Aside from tele-media business, VODone also engages in the lottery business. During the first half of this year, its lottery-related income dropped 87 percent to HK$17.64 million as the Chinese government had released certain policies to regulate the internet lottery industry.
Zhang said that the central government is currently straightening out the lottery market and is preparing to issue licenses for mobile phone and internet lottery sales.
He stressed that the Ministry of Civil Affairs is the largest shareholder of VODone, indicating that the company's lottery business is supported by the government.
"Actually, the performance of our lottery related business in the second half is much better than it was in the first half," he said, pointing out that he has great confidence in China's lottery industry, as the market is vast and the potential is huge.
In 2011, China's total lottery sales was around 230 billion yuan, of which, the sales through internet and mobile phone was less than 5 percent, said Zhang, adding that the Chinese government is supporting the formal lottery sales as part of its efforts in combating underground lottery.
The lottery market in China will expand to around 500 billion yuan a year within two to three years, and once the license for mobile and internet lottery sales is issued, the paperless lottery industry could account for up to 50 percent of the total lottery market, said Zhang.
"Once we have the license, our income from lottery related business could easily surpass the income from tele-media business and become a major revenue source."
VODone has spun-off its mobile gaming unit (China Mobile Games and Entertainment Group Limited) and listed in the NASDAQ by introduction in September this year. The company is very optimistic about its mobile gaming business and has high hopes for it.
Zhang said that in the first half of this year, the mobile gaming market in China was 1.7 billion yuan, and the market is expected to reach 5 billion yuan for the full year.
"China Mobile Games and Entertainment Group (CMGE) owns 18 percent of the market share in terms of the total mobile gaming sales in China for both 2010 and 2011," Zhang said, adding that, "we are already well positioned for the future growth of domestic mobile gaming market."
Zhang projected that by 2015, the mobile gaming market in China may reach 26 billion yuan.
He said that currently, CMGE has no financial pressure, which is also one of the reasons that it chose to be listed by introduction.
"But we are engaging in negotiations of potential acquisitions, and when we need capital, we will issue new shares to raise funds in the US, just like other listed companies," said Zhang.
Zhang said CMGE's acquisition targets include other domestic mobile game developers as well as distributors.