Recently, a piece of news that "the lottery won 439 million and won 9.54 million one minute later" rushed to the hot search. The 22071st issue of Super Lotto was opened on 25th, with 47 bets in Zhaoqing, Guangdong, with a total prize of 448 million yuan. The winning lottery is divided into two pieces, one is a single additional ticket of 138 yuan with 46 times investment, with a single ticket winning 439 million yuan, and the other is a single additional ticket with 5 bets invested by 15 yuan, with a single ticket winning 9.54 million yuan. The time difference between the two lottery tickets is about one minute, which is most likely from the same lottery buyer.
The data shows that people in China seem to have stopped buying lottery tickets in recent years. Lottery sales experienced negative growth for two consecutive years in 2019 and 2020. Lottery sales decreased by 20.9% in 2020 and 17.5% in 2019. In 2021, the national lottery sales reached 373.285 billion yuan, up 11.8% year-on-year. In absolute terms, the lottery sales in 2021 decreased by nearly 50 billion yuan compared with 2019, and by nearly 140 billion yuan compared with 2018 at the peak.
The concept of Internet lottery in the A-share market is not a popular concept. According to the straight flush (300033), the market value of 17 Internet lottery concept stocks totaled 104.539 billion. The concept of Internet lottery has been declining since it recorded the highest point of 1407.33 points in 2015, and once fell to 263.38 points in 2018. In 2021, the concept of internet lottery went up all the way, with an annual increase of 38.86%. Since the beginning of this year, the concept of Internet lottery has shown a V-shaped trend.
The industrial chain of China’s lottery industry mainly includes R&D (distribution, color research and development), production (lottery sales system, terminal equipment, printing production), sales (entity sales, paperless sales, marketing services), derivative services (lottery information, lottery data, expert recommendation) and other links, among which R&D and sales are the core links of the industrial chain. Because the lottery industry belongs to the state’s strict supervision industry, the participants in most links are relatively concentrated, and most of them need the certification of third-party testing institutions and the permission of relevant regulatory authorities. The entry threshold is relatively high, and several large enterprises dominate the market in all links, which is an insufficiently competitive industry.
Guangdong Media (002181) is the leading stock of Internet lottery concept, and the lottery purchasing service platform "Cloud Lottery" jointly developed by the company and Tianxia Technology covers PC and mobile phones. Guangdong Media disclosed on May 23 that the company’s current account funds are maintained at around 2.5 billion yuan, with abundant cash flow and good liquidity. Since May 26th, Guangdong Media has been impressed by the changes in the media sector and other factors, and has successively won five daily limit.
Another leading company, Hongbo (002229), has the design, programming and production capacity of instant lottery tickets. Recently, Hongbo shares the cross-border robot (300024) industry "out of the circle". On the evening of February 14th, Hongbo said that it planned to pay cash to purchase 51% equity of Guangzhou Keyu held by Baole. It is estimated that the overall valuation of Guangzhou Keyu will not exceed 700 million yuan, and the corresponding 51% equity of Guangzhou Keyu will not exceed 357 million yuan. After the completion of this transaction, Hongbo shares will add R&D, production and sales of home intelligent cleaning service robots.
Tianyin Holdings (000829) is the largest lottery service provider in China, providing one-stop service of product research and development, production, sales and service, and has obtained many industry-specific qualifications. All the core products have independent intellectual property rights, and it is also the only terminal supplier in China that has obtained two network access licenses for Fu Sports Lottery. In 2021, the main income of Tianyin Holdings lottery business reached 316.4 million yuan, the main profit was 173.7 million yuan, and the gross profit margin reached 54.90%.
Chuancai Securities pointed out that Internet lottery plays a positive role in the development of lottery industry, which is conducive to promoting the steady growth of lottery and lottery sales in China, from the aspects of new sales channels, expanding lottery crowd and consumption potential, reducing lottery purchase cost, reducing lottery issuance cost, increasing the ratio of bonus to public welfare fund and improving the innovation potential of lottery varieties. In the future, as China’s lottery industry further clarifies government management functions, improves market operation norms, and strengthens the supervision of industry access qualifications, the lottery industry is expected to achieve sustainable development.
Chuancai Securities suggested paying attention to the advantages of industrial chain and resource barriers. In terms of industrial chain, we should pay attention to related companies that have strong competitiveness in R&D and sales channels of color varieties and are laid out around the whole industrial chain. In terms of resource barriers, we pay attention to related companies with government background resources and established good cooperative relations with national and provincial lottery centers. Related targets: China Sports Industry (600158), Hongbo, Tianyin Holdings, Donggang (002117), People’s Daily Online (603000) and Jinling Sports (300651).