China Vanguard Group Ltd
CHINA VANGUARD: China Vanguard Announces Results for the Third Quarter and the Nine Months Ended 31 March 2015 – Profit attributable to equity holders of the Company surged 230% for the first nine months on the back of strong growth in revenue from the lottery business

[For Immediate Release]

China Vanguard Announces Results for the Third Quarter
and the Nine Months Ended 31 March 2015
* * *
Profit attributable to equity holders of the Company surged 230% for the first nine months on the back of strong growth in revenue from the lottery business

(14 May 2015, Hong Kong) China Vanguard Group Limited (“China Vanguard” or the
“Company,” together with its subsidiaries as the “Group;” Stock Code: 8156.HK), is pleased to announce today its results for the third quarter and the first nine months of 2015.

For the nine months ended 31 March 2015, the Group’s unaudited consolidated revenue rose 47.6% year on year to HK$122.4 million. The increase in revenue was predominantly due to a substantial increase in revenue from the Group’s lottery business in the People’s Republic of China (“PRC”). Gross profit margin for the nine months ended 31 March 2015 was 97.3%, similar to that for the same period of 2014. Unaudited profit attributable to the equity holders of the Company for the nine months ended 31 March 2015 surged 229.5% year on year to HK$31.21 million. Basic earnings per share were 0.97 HK cents, up by 212.9% compared to that for the same period of 2014.

For the third quarter ended 31 March 2015, the Group’s revenue increased by 9.0% year on year to HK$55.1 million, while profit attributable to the equity holders increased by 2.5% year on year to HK$16.1 million.

Domestic lottery network covered 21 provinces and regions
For the first nine months ended 31 March 2015, the Group’s revenue from lottery-related business increased 54.7% year on year to HK$117.7, which accounted for 96.2% of its total revenue. The Group continued to strengthen its position as a leading provider of a comprehensive, end-to-end solutions that comprises both hardware and software for marketing and distribution services as well as downstream channel management services for Sports Lottery Authorities and Welfare Lottery Authorities located across 21 provinces and regions throughout the PRC.

– Cont’d –

The Group continued to expand its business presence during the reporting period by entering into two more agreements respectively with Shanxi Province Sports Lottery Administration Centre and Sichuan Province Sports Lottery Administration Centre over the provision of comprehensive, end-to-end services related to the roll-out interactive self-service lottery in the two provinces.

Interactive self-service lottery continues to be the strategic focus of the Group during the reporting period and as we remained fully-compliant with the PRC government’s policies to regulate the lottery industry. The Group is not engaged in Internet lottery, and is therefore not affected by the Chinese government’s policy which forbids the sales of lottery tickets through the Internet.

Since gamified content in lottery solutions encourage more user involvement, the Group has been adopting more gamified content in lottery solutions for its interactive self-service lottery settings. The Group has continued to deploy internal resources to develop more diverse content and has also been seeking to collaborate with leading content developers with an accurate understanding of the specific needs of the PRC market.

Systematic workflow developed to smoothly rollout operation
As the Group continues to roll out its interactive self-service rapidly in more provinces in China, it has also developed a systematic workflow as part of the onboarding process that involves full service and procedural training which will enable our local partners to quickly set up their operation while adhering to the Group’s operational standards.

The Group have also recently started to offer our VIPs more flexibility and comfort in VIP lounges over traditional store settings. The Group will gradually launch more VIP lounges in selected stores to attract high spending customers.

Mr. CHAN Ting, the Chief Executive Officer and Executive Director of China Vanguard Group Limited said, “The Group will continue to focus self-service lottery and strengthen its services to support different sports and welfare lottery centres across the country by rolling-out its market coverage to new regions and provinces. We will also continue to explore new distribution channels and continue with our efforts to achieve the best returns for our shareholders and investors.”

– End –

About China Vanguard Group Limited
China Vanguard Group Limited was founded in 1999, and was successfully listed on the GEM board of The Stock Exchange of Hong Kong Limited in November 2002. At present, as a leading lottery solutions provider in China’s sports and welfare lottery industry, China Vanguard , provides lottery equipment, software, related services and a comprehensive lottery distribution network for China’s Sports and Welfare Lottery authorities located in 21 provinces and regions across China. In order to establish a solid foundation in the traditional lottery industry, the Group introduced revolutionary self-service lottery solutions and developed one-stop shop business model from providing lottery programs to lottery operations to expand market share. In the future, the Group will continue focusing on the high margin, interactive self-service lottery business and comprehensive license portfolio with diversified virtual distribution channels to expand the potential of lottery business; and leveraging international cooperation with software and hardware developers to enhance the R&D capability. The Company strives to become a leading lottery solutions provider in China.

For further information, please contact:
iPR Ogilvy LTD.
Callis Lau/ Molisa Lau/Kiki Zhang
Tel: (852) 2136 6952/ 2136 6953/ 3920 7639
Fax: (852) 3170 6606
Email: cvg@iprogilvy.com