REG - Intuitive Invests.Gp - Significant progress in delivery of Hui10 strategy

Intuitive InvestmentsAnnouncement

14/05/2024 07:00

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RNS Number : 2467O  Intuitive Investments Group plc  14 May 2024

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

 ●    PELT
      ○                  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;
 ●    UGO Scratch
      ○                  National contract with China Communications Information Co., to implement UGO
                         POSLot scratch card sales in all taxis;
      ○                  National Sports Lottery Centre and Shanxi Sports Lottery Centre have approved
                         UGO ride hailing scratch card sales;
 ●    Paperless Lottery Play Framework
      ○                  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
 ●    Lucky World
      ○                  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.

 

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:

 ●    design a complete product and technical solutions for China UnionPay POS
      paperless lottery sales;
 ●    develop a China UnionPay POS paperless lottery application technology system;
      and
 ●    launch a pilot paperless lottery sales business at China UnionPay POS

 

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                       www.iigplc.com (http://www.iigplc.com/)
 Sir Nigel Rudd, Non-Executive Chairman                Via FTI Consulting

 Robert Naylor, CEO

 Giles Willits, CIO

 Cavendish Capital Markets Limited                     +44 (0) 20 7397 8900

 James King / William Talkington / Daniel Balabanoff

 SP Angel Corporate Finance LLP - Financial Adviser    +44 (0) 20 3470 0470
 Jeff Keating / David Hignell / Kasia Brzozowska

 FTI Consulting                                        +44 (0) 20 3727 1000
 Jamie Ricketts / Valerija Cymbal / Jemima Gurney      IIG@fticonsulting.com

 

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.

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