14
May 2024
Intuitive Investments Group plc
("IIG" or the
"Company")
Significant progress in
delivery of Hui10 strategy
Intuitive Investments Group plc
(SFS: IIG), the closed-end investment company focussed on fast
growing and high potential opportunities in the Technology and Life
Sciences sectors, announces the following update in respect of its
largest single investment, Hui10 Inc. ("Hui10"). This follows
the significant investment in Hui10 Inc by IIG in October
2023.
Hui10 is a technology company with
two operating businesses, Huishi Dehua and Huishi Chunyuan ('Lucky
World'), involved in the digital transformation of the Chinese
lottery.
The agreements, contracts and
approvals outlined below are key stages of Hui10's roll-out plan to
deliver Hui10's strategy for the digital transformation of the
Chinese lottery. Successful execution of the strategy will
enable the delivery of significant revenue growth and value upside
for IIG investors.
Summary of Hui10 progress
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PELT
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Agreement with China's largest
travel company, Qunar, to commence Points Exchange for Lottery
Tickets ("PELT") with over 500 million customers from mid-June
2024;
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UGO
Scratch
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National contract with China
Communications Information Co., to implement UGO POSLot scratch
card sales in all taxis;
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National Sports Lottery Centre and
Shanxi Sports Lottery Centre have approved UGO ride hailing scratch
card sales;
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Paperless Lottery Play Framework
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Framework Cooperation Agreement with
China Financial Certification Authority Co. Ltd., ("CFCA") to
design a complete product and technical solutions for China
UnionPay POS paperless lottery sales; and
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Lucky World
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Agreement with China Agricultural Reclamation Group Co., Ltd a state-owned
enterprise also known as China State Farms Alliance ('CSFA'), for
selling goods through Lucky
World.
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Sir
Nigel Rudd, Chairman, said:
"Since the transaction with IIG
in October 2023, Hui10 has successfully executed its strategic
roll-out plan, positioning the business for the key next stages of
the digital transformation of the lottery. We look forward to Hui10
delivering significant revenue growth through PELT, HongBao, UGO
and Lucky World, while also building the foundations for paperless
lottery play in China."
PELT
Hui10 has signed an agreement with
China's largest travel company, Qunar, and will commence PELT
promotions to their over 500 million customers from mid-June
2024. This follows the announcement on 27 February 2024 that
Huishi Dehua has secured official authorisation from the National
Sports Lottery, alongside contracts with UnionPay, to allow their
PELT platform to be deployed nationally. This marks the start of a
series of agreements expected to be signed with UnionPay member
merchants, as the pace of the PELT roll-out accelerates.
PELT enables all UnionPay's member
merchants, including banks, mobile phone network operators,
insurance companies, utilities, travel companies, airlines, food
chains and retailers operating loyalty programmes, to provide their
customers with the ability to redeem their loyalty points for
digital QR code vouchers for lottery play. The PELT platform is now
fully functioning and available in all Sports Lottery shops in
China, meaning users exchanging their loyalty points for digital QR
code Sports Lottery vouchers can redeem them for lottery play at
any one of the c. 175,000 Sports Lottery shops. PELT is a
significant opportunity for new customer acquisition, allowing
Hui10 to grow a substantial registered user base to which it can
offer additional products and services.
UGO
Scratch
Hui10 has signed a national contract
with China Communications Information Co., part of the Ministry of
Transport and China Civil Aviation Information Co., who oversee the
running of all public ride hailing services, including taxis,
intercity buses and coaches and ferries, to implement UGO POSLot
scratch card sales in all taxis. Alongside this, the National
Sports Lottery Centre and Shanxi Sports Lottery Centre have also
approved UGO ride hailing scratch card sales.
This development allows Hui10 to
roll out terminals into taxis to sell scratch cards across China,
initially in Shanxi. It is expected that by December 2024 there
will be over 25,000 terminals installed with the target to increase
to over 1.5 million over the next 3 years. UGO is an
opportunity to expand the POS terminal lottery sales network
infrastructure to provide new previously geographically excluded
players the ability to participate in lottery play generating
incremental income, whilst also building a network of UnionPay POS
terminals, capable of processing paperless lottery
sales.
Paperless Lottery Play Framework
Framework Cooperation Agreement
dated 7 May 2024 with CFCA to:
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design a complete product and
technical solutions for China UnionPay POS paperless lottery
sales;
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develop a China UnionPay POS
paperless lottery application technology system; and
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launch a pilot paperless lottery
sales business at China UnionPay POS
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This follows the signing of key
agreements with China UnionPay and both the Sports and Welfare
Lotteries to develop and launch the UnionPay QuickPass POSLot
platform.
This is a fundamental stage in the
development of paperless lottery play in China and the foundation
to the delivery of the necessary regulatory changes to facilitate
fully online, anywhere, lottery play for the first time in
potentially the world's largest lottery market.
The CFCA is the national
authoritative security certification agency established in 1998
under the leadership of the People's Bank of China and approved by
the National Information Security Management Agency and Ministry of
Finance, responsible for financial information security
infrastructure. As of now, more than 2,400 financial institutions
use CFCA's electronic certification services, accounting for 98% of
the banks using digital certificates and is the largest electronic
certification service organization in China.
Lucky World
Lucky World was created to help the
network of c. 175,000 dedicated lottery shops to increase their
revenues, by providing each lottery
shopkeeper with an omni-channel store, in order for them to sell
Lucky World sourced Fast Moving Consumer Products ("FMCG") to their
existing c. 100 million customers.
Lucky World has commenced its
roll-out, connecting to all lottery shops equipped with a UnionPay
HongBao POSLot terminal. Lucky World has also created
a franchise model for its flagship lottery stores, the first being
the capital city in Hebei province with a population of c. 11
million people. China Mobile and China State Farms Alliance have
taken floorspace and where global and domestic brands will be
ranged.
Furthermore, Lucky World has entered
into a contract with China Agricultural
Reclamation Group Co., Ltd a state-owned enterprise also known as
China State Farms Alliance ('CSFA') and is the largest landowner in
China. CSFA is a trusted brand in China, well known for selling
good quality reasonably priced products. It is licensed to import
foreign products, from wine and liquor to rice, pulses and dairy
products.
This Agreement gives product range
access and brand usage rights for Lucky World omni-channel lottery
shops, and import and customs clearance for foreign goods, together
with access to CSFA supply chain and logistics. CSFA also wish to
participate in Lucky World Flagship Stores nationwide.
Enquiries:
Intuitive Investments Group
plc
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www.iigplc.com
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Sir Nigel Rudd, Non-Executive
Chairman
Robert Naylor, CEO
Giles Willits, CIO
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Via FTI Consulting
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Cavendish Capital Markets
Limited
James King / William Talkington /
Daniel Balabanoff
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+44 (0) 20 7397 8900
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SP Angel Corporate Finance LLP -
Financial Adviser
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+44 (0) 20
3470 0470
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Jeff Keating / David Hignell / Kasia
Brzozowska
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FTI Consulting
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+44 (0) 20
3727 1000
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Jamie Ricketts / Valerija Cymbal /
Jemima Gurney
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IIG@fticonsulting.com
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About Intuitive Investments Group plc
IIG is an investment company seeking
to provide investors with exposure to a portfolio concentrating on
fast growing and/or high potential Life Sciences and Technology
businesses operating predominantly in the UK, continental Europe,
the US and APAC, utilising the Board's experience to seek to
generate capital growth over the long term for
shareholders.
About Hui10
Hui10 is a technology company with
interests in two operating businesses, Huishi Dehua and Huishi
Chunyuan ('Lucky World'), involved in the digital transformation of
the Chinese lottery. Huishi Dehua enables the market expansion of
the Chinese lottery through its proprietary technology platform.
Huishi Dehua is integrated into China's national card settlement
system and payment platform, UnionPay. Hui10 holds a 33% share in
Huishi Dehua. Lucky World is an ecommerce platform which provides
China's existing lottery shops access to a wider fast-moving
consumer goods product offering. Hui10 owns 60% of Lucky
World.