On track for profit growth with Hainan sports quiz game business as the growth opportunity
HONG KONG, Aug. 26, 2021 /PRNewswire/ — Crazy Sports Group Limited (”Crazy Sports”, together with its subsidiaries collectively known as the "Group", stock code: 82) is pleased to announce the interim results of the Group for the six months ended 30 June 2021 (the ‘‘Period”).
Following the completion of the restructuring at the end of 2020, the Group endeavors the best of its efforts developing the digital sports entertainment business. It rejuvenated its brand and renamed as ”Crazy Sports Group Limited”. The Group has established the ”Events + Quizzes, IP + Sports Games, Crazy Red Insights + Lottery Sales” trio-pillar growth engine and has had a spectacular start for the year.
- The Group turned profitable with profit of HK$62.0 million and net profit margin of 27.1% for the Period, as compared with a net loss of HK$16.4 million over the corresponding period of last year.
- Revenue from continuing operations increased by 58.0% year on year ("YoY") to HK$229.0 million.
- Gross profit from continuing operations increased by 67.9% YoY to HK$103.7 million, gross profit margin widened 2.7% to 45.3%.
During the Period, the Group’s total investments in research and development ("R&D") and intangible assets amounted to HK$41.9 million. It made use of digital technologies to upgrade user experience and navigation across Crazy Red Insights APP and Crazy Sports PP, enhanced attractiveness of its sports and leisure games with top sports intellectual properties (”IPs”), and pursued R&D for the Hainan sports quiz platform and reward points system, driving the exponential growth of various business segments for Crazy Sports and achieved significant performances for these investments, resulting in an almost three-fold increase in the quarter-on-quarter revenue for the second quarter of 2021 from the first quarter.
As of 30 June 2021, the total number of user accounts on the sports entertainment platform operated by the Group increased by 63.4% YoY to 38.9 million, and the total number of monthly active users reached 2.62 million, representing a YoY increase of 275.2%. The surge in the number of users during the Period was attributable to successful implementation of the Group’s core strategies, the resumption of international sports events that stimulated the platform users’ demand for the Group’s core APPs, the launch of new games and online plus offline ecosystem that optimized conversion and consumption.
In 2021, with the successful launch of large-scale sports events worldwide including the top 5 European leagues, Chinese Super League (CSL), AFC Champions League, UEFA Champions League, NBA, CBA and UEFA Euro, the Group has enhanced its sports interactive entertainment communities by introducing new and innovative products surrounding these sports events and expanding its share in the digital sports entertainment market through unveiling of a series of ”UEFA Euro strategies". With these drivers, the Group significantly boosted its competitiveness and took its businesses to a new horizon.
In a nutshell, the Group achieved significant breakthroughs in all its businesses during the Period.
Crazy Red Insights + Lottery Sales
- Crazy Red Insights APP, a paid sports information platform, recorded revenue growth of 5 times YoY to HK$68.1 million, with half year revenue performance surpassing that of 2020 full year. The Group focused on new product R&D, user experiences innovations, featuring star sports experts and signed up with streaming platforms holding live event broadcast rights. Crazy Red Insights reinforced its leading position in paid sports information platform during UEFA Euro.
- Crazy Sports APP, a sports social interactive platform, recorded revenue growth of 57.1% YoY to HK$33.0 million, successfully optimized conversion and monetization between business lines. During the Period, the Group provides members with information update, game data update and team player update of more than 2000 leagues, allowing Crazy Sports APP to be one of the most competitive and influential databases in the market. As driven by sports events, the sports interactive live broadcasting platform has achieved remarkable progress as a result of high demand from soccer fans seeking for sports information.
- During the Period, commission income from sports lottery sales services reached HK$5.0 million, representing a 9-fold growth YOY. The number of sports lottery retail point of sales surpassed the 5,000 mark and covered 17 provinces and municipalities across the country. In the first half of 2021, the sports lottery retail business as a whole achieved rapid development. The Group saw significant increases in the number of new channels sized up, in the number of sports lottery terminals installed in stores, and in the sale turnover of lottery tickets, respectively.
IP + Sports Games
- The sports and leisure games business achieved a 9.6% YoY increase in revenue to HK$123.0 million, thereby maintained organic growth and accomplished qualitative advancement in new game launches. During the first half year, Crazy Sports released a blockbuster soccer esports game in mainland China — ”Ace Soccer” — with official authorization from the International Federation of Professional Footballers (FIFPro), constituting the most sought-after soccer mobile game during the peak of UEFA Euro 2020.
Mr Peng Xitao, CEO of Crazy Sports, said: "Since completion of the restructuring, we have focus on three major areas to enhance the unique and sustainable competitive edges of Crazy Sports. In 2021, we invested in R&D and added value to our intangible assets to enrich our core resources. With our industry leadership and strong brand strength, we expanded our relationships with leading industry partners, such as CCTV and Migu, to capture more market share. We have increased the market share of Crazy Sports platform in the digital sports entertainment market. The total number of platform users and active users have both recorded growth, which greatly improved the competitiveness of the Group and took its businesses to the new horizon."
"The 2022 World Cup in Qatar is just around the corner. With the continuous holding of mega sports events, the offline retail point of sales will attract ongoing user foot traffic and new lottery fans and redirect to our online platform, Crazy Red Insights will become a powerful engine driving the Group’s revenue growth. In the games business, the Group will unleash full potential of the edges of the Chinese Super League and FIFPro IPs through releases of more sports games to accelerate the Group’s revenue growth. The ‘Events + Quizzes‘ segment, in conjunction with a new round of local, intercontinental and large-scale international events, will drive the Group’s business opportunity in this area. The ‘Fantasy Sports Events Platform‘ empowers sports events and will introduce innovative prize-winning quizzing games to the sports games and Crazy Red Insights user groups, which will greatly increase platform users’ paying efficiencies and ratios, underscoring the strong profit potential of the Crazy Sports’ entertainment platform. In the future, Crazy Sports will introduce more events to Hainan, and leveraging the ‘DuoDuo Reward Point System’ to effectively promote development of cultural and sports tourism with Hainan characteristics, and to provide sports fans with more interactive quiz services for the events. I believe Crazy Sports will continue its growth trend ascribed from the first half year. With the enhanced brand competitiveness and opportunities in 2022, the Group will score new heights in its results."
Dr Zhang Lijun, Chairman of Crazy Sports, said: "According to China’s ‘14th Five-Year Plan’, the value of the nation’s sports industry market will reach RMB5 trillion by 2025, and the market size is huge. ‘Building a Leading Sports Nation‘ has become one of China’s four major national policies with strengthening policy support. As China’s leading digital sports entertainment community operator and a leading enterprise in the Internet sports industry, Crazy Sports has kicked on the right track of development. We strive to tread farther on this track to achieve stronger profit growth. The strong growth of the Group’s interim results proves the success of the business model and strong profitability. The interim results performance has also proven that subsequent to the restructuring, the management and operation teams have been improving their efficiencies and capabilities persistently. Therefore, we believe Crazy Sports’ potential for further development is tremendous."
About Crazy Sports Group Limited
Crazy Sports Group Limited is a leading digital sports entertainment community operator and a leading enterprise in the internet sports industry in China. It is listed on the Main Board of HKEX (Stock code: 82.HK). Laying our strategy on China’s policy to "Build a Leading Sports Nation", we deeply engage into the trillions-worth digital+ sports entertainment market. Leveraging its unique and enormous sports user database, artificial intelligence and blockchain technology to empower sports events, we have established the ”Events + Quizzes, IP + Sports Games, Crazy Red Insights + Lottery Sales” trio-pillar growth engine. With the mission of ”Let Sports Create Happiness”, we are committed to serve the users with a digital entertainment platform that enables multi-dimensional and real-time participation in sports events.