China Vanguard Group Ltd
China Vanguard to acquire equity interest in Caimi (Beijing) Science and Technology Co., Ltd. for an aggregate cash consideration of RMB 13,000,000 To actualize its ‘O2O’ strategies for Sports and Welfare lottery operations

[For Immediate Release]

China Vanguard to acquire equity interest in
Caimi (Beijing) Science and Technology Co., Ltd.
for an aggregate cash consideration of RMB 13,000,000

To actualize its “O2O” strategies for Sports and Welfare lottery operations

(28 June 2015, Hong Kong) China Vanguard Group Limited (“China Vanguard” or the “Company”, which together with its subsidiaries, collectively as the “Group”; Stock Code: 8156.HK), is pleased to announce that on 27 June 2015, the Company, through a wholly owned subsidiary, has entered into a Capital Increase Agreement (the “Agreement”) whereby the Company has conditionally agreed to acquire equity interest in Caimi (Beijing) Science and Technology Co., Ltd. (“Caimi”) through capital injection, for an aggregate cash consideration of RMB13,000,000 (equivalent to approximately HK$16,229,713), representing 51% of the enlarged share capital of Caimi.

Caimi is primarily engaged in providing data marketing, data analytics, software and application development and consultation services. Upon completion of the Agreement, the Company will become the controlling shareholder of Caimi, and is expected to enhance resource allocation while actively assist Caimi in expanding its operations.The existing business and technological capabilities of Caimi to be highly complementary to the Group’s core business in lottery-related operations. Through its proven expertise in mobile applications development and application based data marketing for lottery operations, actualize the Group’s offline-to-online (“O2O”) strategies for Sports and Welfare lottery operations in the future, should it become accessible within the regulatory and legal framework in the People’s Republic of China (the “PRC”.)

As the PRC’s Internet penetration rate continues to grow, over half of the Chinese population is expected to become internet users in 2015 with a significant portion expected to access the Internet through mobile phones. Hence Internet Lottery will be a key industry trend within the realms of the regulatory framework. And the existing customer base from Sports and Welfare lottery distribution channels will serve as a strong base and prime potential clients for enriched services provided through mobile applications, as part of the Group’s vision to build a comprehensive, end-to-end lottery solution.

The Group is committed to strictly adhere to guidance and requirements as provided by the relevant regulatory and authorized bodies. The Group is not engaged in Internet lottery operations at present and do not plan to be engaged in Internet-related lottery services until it is provided for within the regulatory and legal framework in the PRC.

Mr. CHAN Ting, Executive Director and the Chief Executive Officer of China Vanguard Group Limited said, “The experience, technology know-how and credentials of Caimi’s current management to be capable and credible and beneficial to help the Group in achieving certain business and strategy objectives in the future. We believe that the combination of the Group’s market coverage and expertise in self service lottery coupled with Caimi’s technology and O2O implementation expertise will create substantial value to the Group’s core business in lottery operation. “

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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