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| Wednesday, 22 March 2017, 13:00 HKT/SGT | |
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| Sized-up and Judged the Situation, Packed Light to Take the Field and Being Future-oriented to Recreate Greatness |
HONG KONG, Mar 22, 2017 - (ACN Newswire) - V1 Group Limited (the "Company" or "V1"; Stock code: 82.HK) is pleased to announce the results of the Company and its subsidiaries (the "Group") for the full year of 2016. Turnover of the Group for the year ended 31 December 2016 amounted to HK$0.15 billion, representing an increase of around 24.7% as compared with last year. Profit of the Group for the full year of 2015 amounted to HK$0.22 billion, loss for the full year of 2016 was HK$0.98 billion, it is mainly due to significant impairment losses of intangible assets, goodwill, interest in an associate and amount due from an associate. Here are the composition of the loss and its specific reasons:
The actual operating loss of the Group in 2016 amounted to HK$0.22 billion. As the Group disposed its mobile game business and its domestic partner decided to put an end to the lottery selling business due to policy influences, the Group's business structure and income stream were thereby affected. In response to the new market situation and industry development direction, V1 Group timely adjusted its business layout. The launch of new businesses and new market cultivation increased costs and expenses, which was the main reason for the Group's actual loss. Once the new businesses become mature, the Group's earning capacity will become much stronger, and in turn its operating revenue will be improved.
According to the 2016 annual results announcement, impairment goodwill of lottery-related business which amounted to HK$0.16 billion and the impairment of intangible assets of lottery-related business which amounted to HK$0.25 billion were the main reason for the Group's loss in 2016. It has been more than 2 years since the government suspended the sales of lottery through internet in 2015, and in response the Group's business partners in Mainland China suspended the operation of its relevant business. Since national policies related to sale of lottery tickets through internet were still not issued, there are high degree of uncertainties in the policies and regulation and market conditions regarding the resumption of the operation of the sales of lottery tickets through internet. Non-cash impairment losses were recognized based on the prudential assessment of the lottery-related operations. Impairment losses related to the internet based lottery-related business including goodwill, intangible assets and amount due from an associate amounted to HK$0.44 billion.
Following the internet based lottery-related goodwill and intangible assets were impaired, the carrying amounts of certain lottery-based tele-media cash generating units were written down to their recoverable amount or fully impaired due to the effect of suspension of the lottery-related business operations. Intangible assets, interest in an associate and amount due from an associate that were related to the Group's lottery-based tele-media services were fully impaired amounted to HK$0.32 billion. At the same time, in response to the rapid development of internet technology, the Group invested heavily in internet audio-visual new media, Internet medical and a series of new Internet Plus businesses for upcoming future, corresponding to the higher development and promotion costs.
Overall, although the Group's results announcement stated a loss of HK$0.98 billion, only HK$0.22 billion of it was actual loss apart from the impairment loss treatment of internet based lottery-related goodwill and intangible assets and lottery-based tele-media services goodwill, intangible assets and etc.. We can see that after the impairment, V1 Group still has a solid foundation on funds which allows the Group to move forward with a light pack in face of the newly-developed business layout in the future. Once the new business revenue generation is on track, the Group will have a fast development momentum.
Since the Group has been listed in 2006, its businesses maintained a profitability and growth trend for most of the years. Our lottery business was developed rapidly in past years. At the same time, the Group's subsidiary China Mobile Games and Entertainment Group (CMGE) has contributed huge profit contribution to the Group. Since CMGE's listing in Nasdaq, the United States, it developed and expanded rapidly. In 2015, the management of V1 Group decisively grasped the opportunity to privatize it in 83 days. This created a new record of China concept stock privatization, and brought HK$2.3 billion cash consideration and HK$0.93 billion profit to V1 Group. Therefore, we can see that even a significant amount of impairment was made, the Group still retains sufficient funds to sustain our future development.
2016 was the beginning year of V1 Group's new 10-year development plan. Promoted by the domestic trend of "Nationwide Entrepreneurship and Innovation", the Group's management examined and judged the situation, took into account the characteristics and trends of internet development, and formed a forward-looking layout for the Group's future businesses in the new form of "Internet Plus". Under our business structure, the new media business segment has been basically set up centering on V1 Quick-Comment and V1 VR Show; the Internet Finance segment is mainly made of V1 (China) Investment, V1 Factoring, China Prosperity Capital Mobile Internet Fund and the Bank of Asia; the new game business segment includes V1Game, as the core, combining with V1H5 Platform and Liu Lian VR Platform; and the "Internet Plus" business segment is focused on Healthcare Home and Quick To. Although the current business segments are still in the input stage, they are consistent with the development trend of internet business, closely connected with future technology and possess foresight and huge market potential. At present, all business segments are in healthy conditions, and therefore, the Company is confident that V1 Group will make another miracle and achieve greater success in its future development.
About V1 Group Limited
V1 Group Limited is one of the largest Internet enterprises in China, the first listed online video media enterprise and one of the top 100 Internet companies in China. V1 Group has been committed to expanding its mobile internet services and has accumulated a large number of loyal mobile internet users through the provision of new media services. V1 Group has formulated a series of forward looking plans in respect of the "Internet Plus" businesses of the Group, including Internet Plus Finance, Internet Plus Healthcare, Internet Plus Elderly Care and etc.. The "Internet Plus" business will be a key business of the Group that is close to public and cater for the needs of internet users directly and will become the momentum of further development and source of revenue growth of the Group in the future.
V1 Group IR website: http://ir.v1group.com.hk
Topic: Press release summary
Sectors: Media & Marketing, Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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