V1 Group Ltd
Interpretation on the Results of V1 Group for the Full Year of 2015

Immediate Release 18 March, 2016

V1 Group Limited
(Stock Code: 82)

Interpretation on the Results of V1 Group for the Full Year of 2015

V1 Group Limited (the “Company” or “V1”) is pleased to announce that the results of the Company and its subsidiaries (the “Group”) for the full year of 2015. Turnover for the year amounted to HK$123,561,000 representing a decrease of around 62.1% as compared with last year, primarily due to the suspension of the sales of lottery tickets with effect from March 2015. Income from tele-media business amounted to HK$96,338,000 representing an increase of around 15% as compared with last year. The profit attributable to the owners of the Company amounted to HK$142,666,000, as compared with a loss of HK$131,590,000 last year.

Lottery-related Business

The main source of income for V1 Group’s lottery-related business derives from the websites set up and operated by the partners of the Group, including Lottery 365（彩票365）, a strategic cooperative mobile application developed by the business partner of the Group, “Zhongguozucaiwang”（中國足彩網）(www.zgzcw.com) and “Diyicai”（第一彩）(www.diyicai.com). Such commercial cooperation also resulted in relevant income structure.

Income from lottery-related business amounted to HK$27,223,000, representing a decrease of around 88.8% as compared with the corresponding period last year. Segment loss for the whole year was HK$45,604,000 (2014: profit of HK$78,964,000). The unsatisfactory result for the period was mainly attributable to the adverse effects of the suspension of the operations of online sale of paperless lottery tickets and sale of lottery tickets through mobile phones of the Group’s business partners in Mainland China with effect from 1 March 2015. Accordingly, the Group’s lottery-related business has been suspended simultaneously. It is uncertain when the operation of the Group’s lottery-related business will resume.

The Group’s business partners will observe and comply with any new rules and regulations promulgated by the relevant PRC regulatory authorities and make adjustments to their operations of online sale of lottery tickets and sale of lottery tickets through mobile phones where necessary. The Group will actively cooperate with its business partners with an aim to have lottery-related business of the Group back on the track as soon as possible.

In early 2015, the monthly lottery sales at Zhonguozucaiwang and Lottery 365 reached another historical high, stimulated by the Asian Cup and game bets on fixed single matches. In March 2015, the Ministry of Finance, the Ministry of Civil Affairs and the General Administration of Sport of the PRC jointly promulgated the Notice on Issues Regarding Conducting Self-examination and Self-correction Activities of the Unauthorized Sale of Lottery through Internet（關於開展擅自利用互聯網銷售彩票行為自查自糾工作有關問題的通知）, leading to the full suspension of internet sale of lottery tickets.

Thus, the Chinese internet lottery industry is facing the fifth time of rectification, and again the entire industry entered into a period of confusion on development. During the rectification period, the lottery-related business partners of V1 Group decided to develop through three main aspects, including “Information and Data”, “Game Entertainment and Value-added Services” and “Innovative Service Models”, exploring an efficient operating approach to boost user activity.

The website of Diyicai has undertaken an upgrade project, in order to enhance users loyalty and activity towards the website of the Group’s lottery-related business. It is mainly focusing on the innovation on presenting lottery results, we are the first to present lottery results in forms of graphs, enabling the users to search for all kinds of lottery information such as the dividends, lottery pools and sales conveniently. Meanwhile, we have improved the user experience with a new website interface by modifying various interface designs such as the information modules, odds centers and real-time scores with respect to the website style and the channel features on website.

In April 2015, Zhongguozucaiwang launched a “Lottery Information” channel and its brand-new HTML5 version, with a precise focus on seven key matches, namely, “Five European League Matches”, “UEFA Champions League”, “AFC Champions League”, “Copa America”, “FIFA Women’s World Cup”, “UEFA Euro Qualifying tournament”, and “Chinese Football Association Super League”. The website has concentrated its resources on building a leading matches center of the industry and rolled out special features, schedule points, key rivals and matches analysis for important matches, with full coverage of the homepage search results of three main search engines – Baidu（百度）, 360 and Sogou（搜狗）. Furthermore, in respect of scores and information, Zhongguozucaiwang and Lottery 365 have introduced the real-time scores and odds data from Sportradar, encompassing more than 70 league and cup matches of such countries as England, Germany, Italy, Spain, France, Portugal, Switzerland, Norway, Brazil and China. The two websites lead the industry in terms of the speed and accuracy of real-time scores and odds changes, substantially enhancing the user experience of information access.

In May 2015, Zhongguozucaiwang and Diyicai saw a full recovery of their pageviews; in June 2015, the pageviews of both websites surpassed the record prior to the sales suspension. “Information and Data” played a key role in retaining users and maintaining user activity for the two websites.

In respect of game entertainment, Lottery 365 successively launched two main guessing games “Guessing PK Game”（猜猜猜PK賽）and “Virtual Guessing of Football Game”（競彩足球虛擬競猜）, provide users with a chance of winning cash and prizes. Besides, “Racetrack”（賽馬場）, a Lottery 365’s self-developed high frequency game is very popular among users, during the first week of its launch, its simultaneous users reached more than ten thousand.

In respect of innovative service model, the Group’s lottery-related business partner has collaborated with “Football” newspaper, No.1 professional print media of sports in China, together with other business partners jointly roll out a platform for paid expert recommendations. A large number of famous domestic experts, such as Su Qun（蘇群）, Boshu（波叔）, and Ding Weijie（丁偉傑）are invited to join the expert recommendation platform through the Lottery 365 and Zhongguozucaiwang, providing users with expert recommendations subscription service. It is intended to be developed as the biggest expert recommendations platform in the PRC.

In respect of product cooperation, Lottery 365 has been pre-installed in full range of Huawei “Honor Play” mobile phones（華為「榮耀暢玩」全系列）in form of “Cloud Folder” and has also been listed on Huawei Application Market’s recommended list as one of “The Most Promising APP in 2015″（「年度最具潛力應用」）. Meanwhile, Lottery 365 has become a lottery content provider for Baidu Application Platform, offering lottery results, lottery pools and related information on main lottery types such as Shuangseiqiu（雙色球）, Qixingcai（七星彩）, Qilecai（七樂彩）, Pailiesan（排列三）, Pailiewu（排列五）for Baidu mobile application users.

In the first half of 2015, as a pioneer in the development of mobile internet industry, Lottery 365 won recognition from organizations and distribution platforms in mobile internet industry, winning successively “The Most Popular APP in 2015″（「年度最受歡迎應用」）award by Android Market, “Popular APP Award”（「人氣應用獎」）by WoStore of China Unicom, and “Top 50 in Innovation Competition”（「創新大賽Top 50」）by Global Mobile Internet Conference and etc.

Tele-media Business

Income from tele-media business amounted to HK$96,338,000 representing an increase of around 15.0% as compared with last year.

V1 Portal

V1 Portal is one of the largest micro video aggregation platforms in the PRC which gathers mini-videos across the PRC. With its intelligent personalized recommendation service, the website recommends headline videos for users according to their viewing habits. V1 Portal covers a wide range of program contents, including news, military, entertainment, film, comedy, sports, lifestyle, finance, technology, movie, TV drama and all kind of mini-videos. Users can stay home and easily get access to their needed information or entertainment programs. Moreover, V1 Portal website has integrated with its mobile application, achieving the real-time synchronization between computer and mobile platform, yielding the greatest publicity effect for the website. During the year of 2015, V1 Portal has two key news programs, namely the 70th Anniversary of the Victory of the Chinese People’s War of Resistance against Japan and the second World Internet Conference.

On 24 June 2015, V1 New Media announced the launch of the largest Professionally Generated Content (PGC) platform project in China together with over 500 content providers, including Trends Group（時尚集團）, Modern Sky（摩登天空）, Feidieshuo（飛碟說）and Zhengyun TV（鄭雲工作室）, with an aim to establish the largest “Chinese YouTube” platform in the world for millions of video creators in China to get rich ahead. Such transformation is regarded by the industry as a milestone in the development of Chinese video business.

In addition, regarding our self-produced programs, V1 Portal is producing programs under the principle of “fine-quality strategy, in-depth interpretation, high-class entertainment and trendy style” and based on the original programs such as “National Spitslot”（全民大吐槽）, “World of Soldiers”（兵論天下）and “Big Coming”（大牌來襲）, V1 Portal has tailor-made for users certain new programs such as “Influential TV Series”（影響劇大）and “Interpreting History”（解舊歷史）. As of November 2015, thousands of excellent PGC users have participated in the V1 PGC platform and there are quantities of quality video contents uploaded every day.

To better demonstrate the leading position of V1 Portal and its objective of transforming to PGC platform, V1 Portal has started its homepage revamp in May 2015. Based on the operation experience accumulated over years with reference to YouTube model and combined with Chinese elements, V1 Portal introduced the new v1.cn with a clean and user-friendly homepage. Meanwhile, with the assistance of our technical staffs, the operation team of the homepage has established a more responsive process to ensure rich and timely content delivery and offering users with better services.

V1Game Business

Due to the disposition of many web game producers or their transformation to mobile games area, the year of 2015 witnessed a significant decrease in number of new web games. However, the total number of web game users has remained almost unchanged at 330 million, which still demonstrating a healthy growth trend. Because of such decreased number of new web games, the joint operation platforms have to put more efforts in promoting the quality prime games. V1Game has quality prime web games such as “Legend of Dominance”（傳奇霸業）, “Master God of War”（大戰神）, “Great Ruler”（大主宰）, and “World of the Sealed Book”（天書世界）, all of which are under vigorous promotion by each joint operation platform. We have also entered into strategic cooperation with Shang Fang Wan（上方網）, which will carry out publicity with regard to our brand, exhibition, and channels for us, and V1Game will be responsible for platform set up, game operation and customer services. Moreover, we have joined hands with overseas operators to explore the foreign markets. We also leveraged our official WeChat account of V1Game as our key promotional strategy, and so far has attracted over 100,000 fans. It is convenient not only for the users to log on without registration, users can also experience and recharge for the games via our official WeChat account. In addition, V1Game has also offered exclusive VIP customer services to the high consumption users, with providing excellent personal services to VIP users constantly. This is the main reason why V1Game could accumulate users more rapidly and record more revenue than other competitors. Now, the user base is growing at approximately 15% month-on-month.

In terms of product category, the product mix of V1Game was generally in line with the industrial practices. Currently, 90% of its products are role play game (RPG). Among the categories of web game operating in the market, the number of RPG games is accounted for over 80% of market share. RPG games can stimulate players’ consumption at a greater extent, as they have a stronger vicarious feeling, easy to play and with simple game battle mechanism. V1Game has variety types of games ranging from legend, mythical realm, magic and the three kingdoms to martial arts, which able to meet the needs of different users largely.

Apart from the continual endeavors on web games, V1Game has also launched its own HTML5 (H5) game platform (www.v1h5.com) riding on the development trend of the industry. The platform has now gathered approximately 1,000 high quality H5 mini-games. No matter mobile or computer users, after they logged on the game platform, users can play their favorite games immediately without downloading.

Currently, V1H5 Platform has begun to take shape. In the 2015 HTML5 Annual Awards（二零一五HTML5年度頒獎盛典）held by “HTML5 DreamWorks”（HTML5夢工廠）, the most reputable organization among peers, V1H5 Platform was honored with “2015 New Company with Greatest Potential”（「二零一五年度最具潛力新銳企業獎」）. Moreover, the self-developed game “Candy Bumpers”（糖果碰碰車）was honored the award of “Product with Greatest Development Potential”（「最具發展潛力產品獎」）in “China Original Android Game Competition”（中國原創Android遊戲評選大賽）co-organized by “China Telecoms e’ game”（中國電信愛遊戲）and “Game channel of People.cn”（人民網遊戲頻道）. Now, “Candy Bumpers” talks to cooperate with well-known platforms such as Baidu Tieba Platform（百度貼吧平台）, Tencent Wanba Platform（騰訊玩吧平台）, and Sina Weibo Platform（新浪微博平台）have been kicked off.

By virtue of the comprehensive strength of V1 Group, V1Game has already been recognized by various peers in the industry and has been in very close cooperative relationship with most of research and development companies and joint-operating companies. Meantime, V1Game has successfully developed a web game operation alliance which is exclusive to V1H5 Platform. Through this web game operation alliance, all individuals, companies and webmasters of game sites can join us for operation and promotion of the web games.

In terms of H5 games, V1Game has already decided to take the brand-new concept of “Interaction between Sports and Games”（體遊互動）as its core product strategy of 2016. At present, V1Game has entered into an exclusive cooperative agreement with Beijing Happy New Games（北京歡樂新遊）to develop a H5 game on sports competition named “It’s up to Fans”（球迷製造）. The preparations for its operation have commenced after the Spring Festival of 2016. The game feature is the users can participate in the sports matches in real time through a game mode, aiming to build the first platform for social sports games in China with the concept of “Interaction between Sports and Games”. With the Europa League on and the Olympic Games to be held in Rio de Janeiro, Brazil in 2016, “Interaction between Sports and Games” is definitely to be driven to a new climax.

V1Game has currently launched new functions of “One Yuan for Treasure”（一元奪寶）and “Platform Points”（平台積分）. By offering users an opportunity winning remarkable bonus with limit budget, “One Yuan for Treasure” encourages users to play in small amount but high frequency, in order to enhance user activity and stickiness of the platform. “Platform Points” is also design for enhancing the user activity. By completing certain tasks, the users can obtain points for exchanging different items or game recharging cards on the platform. These functions have positive role in promoting products on the platform. Additional functions will be rolled out in the future, with a view to improve the platform and provide users with new experience continuously.

Healthcare Home

In December 2015, V1 Group launched a new mobile application named “Healthcare Home”（醫護到家）, the most subversive “Internet Plus” medical product in the PRC, this mobile application is differentiated from those online diagnosis model in the market, it is a brand new service philosophy with providing healthcare information services in respect of, among other things, doctors’ appointment, nursing home care, Chinese medicine therapy and follow-up consultation for chronic disease according to patients’ real needs.

Nursing home care services are provided by Healthcare Home platform in cooperation with Grade A Class III Nurses Group, which is the first nurses group in the PRC consisting of more than 1,000 registered nurses from Grade A Class III hospitals such as Peking Union Medical College Hospital（北京協和醫院）, Peking University People’s Hospital（北京大學人民醫院）, Ruijin Hospital Shanghai（上海瑞金醫院）and The First Affiliated Hospital of Sun Yet-sen University in Guangdong（廣東中山一院）, etc. The nursing home care services involve the provision of injection, infusion, urinary catheterization, nasal feeding, and wound dressing services by nurses authenticated by the platform on site. At present, Healthcare Home has authenticated over 3,000 registered nurses who are certificated by National Health and Family Planning Commission of China (NHFPC)（國家衛生和計劃生育委員會）, 80% of which have 3 years or above practicing experience, covering 76 large and medium sized cities including Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing, Hangzhou, Jinan and Chongqing. Authenticated nurses would “grab” （「搶約」）orders on Healthcare Home information platform and provide nursing home care services for the patients hereby.

Doctors’ appointment service is working through an authenticated open platform for hospital companion services operating on Healthcare Home platform. It provides hospital companion and doctors’ appointment services for patients across the PRC, the authenticated companion groups including doctors, nurses, and student groups near hospitals. Users can send their appointment or hospital companion service requests via our Healthcare Home mobile application and the hospital companion professionals will get the order by a “grabbing”（「搶約」）mode, and will provide doctor appointment and hospital companion services for users. By now, Healthcare Home has authenticated more than 900 hospital companion professionals in 39 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Nanjing, Hangzhou, Chengdu and Xi’an, who will provide hospital companion services such as hospital guide, doctor appointment, classified treatment and information about hospital surroundings.

Chinese medicine therapy and follow-up consultation for chronic diseases are provided by Grade A Class III Traditional Chinese Medicine Group, which co-founded by Healthcare
Home and more than 600 Chinese medicine practitioners from Grade A Class III hospitals
such as Beijing Hospital of TCM（北京中醫醫院）, Guang’anmen Hospital（廣安門中
醫院）, Xiyuan Hospital CACMS（西苑醫院）, Dongzhimen Hospital Beijing University
of Chinese Medicine（東直門醫院）, Shanghai Shuguang Hospital（上海曙光醫院）and
Guangdong Provincial Hospital of Traditional Chinese Medicine（廣東省中醫院）. The
services including the provision of home care manipulation, massage, scrapping therapy, and
cupping therapy, and follow-up consultation for chronic diseases such as diabetes, high blood
pressure, cardio-cerebrovascular disease etc., as well as health guidance service to the patients nearby. By establishing an information service platform connecting doctors and patients, it aims to promote initial diagnosis of chronic diseases like diabetes, high blood pressure, cardio-cerebrovascular disease in grassroots level. In addition, the Healthcare Home platform also offers information service on nursing workers, maternity matrons and prolactin experts.

In order to implement the Guiding Opinions of the State Council on Actively Propelling the Internet Plus Action (《國務院關於積極推進「互聯網+」行動指導意見》) and Guiding Opinions of the State Council on Advancing the Combining of Medical and Health Services and Elderly Care Services (《國務院關於推進醫療衛生與養老服務相結合的指導意見》), Healthcare Home and National Aging Information Center（全國老齡辦信息中心）entered into a strategic cooperation agreement, whereby product series of Healthcare Home officially become the first internet healthcare service pilot product in the PRC.

As a key mobile health information service platform built by V1, Healthcare Home has entered into a strategic partnership with PICC Property and Casualty Company Limited（中
國人民財產保險股份有限公司）, whereby providing free accident comprehensive protection services to doctors, nurses and patients who are using Healthcare Home, freeing them from worries for accidents. Healthcare Home information service platform has built up a healthcare sharing economy business model, which offers all-rounded rehabilitation services such as doctor’s appointment services, nursing home care services, Chinese medicine therapy and follow-up consultation for chronic diseases, by integrating social resources including doctors, nurses, students and residents near hospital and reconstructing the healthcare service supply chain, and thus help solving the insufficient healthcare service supply problem to certain extent.

With differentiated product service, Healthcare Home was specially recommended by Apple App Store and swiftly jumps to top among its “Medical” category in China. Besides, on the first day of launching the Android version of Healthcare Home, it was recommended by various application distribution platforms such as Tencent Myapp（騰訊應用寶）, Baidu Mobile Phone Assistant（百度手機助手）, 360 Mobile Phone Assistant（360手機助手）, Huawei Application Market（華為應用市場）, Xiaomi App Store（小米應用商店）. At present, Healthcare Home mobile application has achieved over 1 million downloads, becoming the most fast-growing healthcare-related mobile phone application in China and gradually becoming an industry parvenu building brand-new business model for mobile healthcare.

Mobile Games Business

For the year of 2015, the mobile games business segment revenue decrease to HK$1,168,121,000, representing a decrease of around 27.9% as compared with the corresponding period in 2014.

Decrease in revenue was attributable to the Company disposed of its entire interest in CMGE on 10 August 2015. After that CMGE ceased to be a subsidiary of the Company. The Group’s mobile games business has discontinued and the revenue and profit of mobile game business were not recognized in the Group’s revenue and result since then.

Nevertheless, segment profit of mobile games business increased by 230.5% to HK$846,315,000 when compared with HK$256,061,000 in the year of 2014. The strong financial performance was driven by the profit arising from the disposal of the interest in CMGE during the year.

– END –

About V1 Group Limited
V1 Group (www.v1.cn) is one of the largest new media enterprises and top 50 internet company in China, which principally engage in the production and broadcasting of internet video news, web TV and mobile video news, as well as online advertising. Besides, we also engage in lottery-related business.

V1 Group IR website: http://ir.v1group.com.hk

This press release is distributed by Wonderful Sky Financial Group Limited on behalf of V1 Group Limited.

For further information, please contact:
Wonderful Sky Financial Group Limited
Alice Wang / Jessica Wong
Tel：(852) (852) 3970 2133 / (852) 3970 2195
Fax：(852) 2865 1638
E-mail：alicewang@wsfg.hk / jessicawhy@wsfg.hk