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1
Company Overview
Growth Strategies
Appendix
Investment Highlights
Financials
Who are we?
2
is China's #1 online sports lottery service platform*
is the only government approved private online lottery service provider
provides the most comprehensive, sophisticated and trusted services
has 13+ years of operational history since 2001
1
* In terms of purchase amount in 1H2013
Our business model
3
Highly Efficient Business Model
Prize
Collection
Service fee
Purchase100% purchase price
100% of prize
Service fee
100% purchase price
100% of prize
Operation 100% online No logistics / No inventory No principal risk No counterparty risk
Lottery games offered on our platform
Source: Company
Sports Match Games Lotto GamesHigh Frequency
Games
4
Bet on the outcome or scores of one
or a combination of sports matches
Choose N numbers out
of M numbers, results
announced every 10 or
15 minutes
Select N numbers out
of M numbers, results
announced daily or
every 3 days
Not applicable
…Not applicable
Lottery games
Underlying sports matches
How to play
Investment Highlights
Appendix
Company Overview
Financials
Growth Strategies
Investment Highlights
Huge market potentials1
Leading online sports lottery platform in China2
Comprehensive and innovative service enhancing user experience 3
Experienced and dedicated management team6
5
Innovative and reliable technology5
Large and active user base4
27.2
50.7
73.6
2010 2013 2015E
China’s Total Lottery Market China's Sports Lottery Market China's Online Sports Lottery Market
6
0.4
1.5
3.2
2010 2013E 2015E
(US$ bn) (US$ bn) (US$ bn)
Huge market potentials1
Source: iResearch
3.3 % 6.9 % 10.1%Penetration
%
11.4
21.9
31.3
2010 2013 2015E
7
Huge market potentialsGrowth trend resilient to economic cycles
Macau Gaming Industry Income
China Total Sports Lottery Sales Breakdown
(US$ bn)
(US$ bn)
Source: Ministry of Finance
Source: Ministry of Finance Source: Gaming Inspection and Coordination Bureau Macau SAR
1
China Total Sports Lottery Sales
(US$ bn)
6.47.5
9.4
11.5
15.5
18.3
21.9
2007 2008 2009 2010 2011 2012 2013
10.5 13.8 15.1
23.8
33.8
38.3
45.4
2007 2008 2009 2010 2011 2012 2013
1.0
0.9
1.1
2.4
3.6
4.4
5.6
-
1.7
2.5
2.7
3.3
3.0
2.7
-
4.9
5.8
6.3
8.6
10.9
13.6
2007 2008 2009 2010 2011 2012 2013
Sports Match Instant Lotto
Leading online sports lottery platform in ChinaMarket leader with government approval
8
2
* Online sports lottery only, in terms of purchase amount in the first half of 2013
Source: iResearch
1H 2013
The only MOF-approved privately owned online lottery sales service provider with an operational track record
Largest Market Share in China*MOF- Approved Online Lottery
Service Provider
9
Leading online sports lottery platform in ChinaLeading brand name closely associated with sports events
2
10
Global sports
match informationComprehensive
lottery information
74Lottery
Products
973Odds
Sources
---------------------------------------------------------------------------------------------------------------------------
61 provincial
lottery products
13 national
lottery productsMatches from 60 countries
450,000+ soccer and basketball
matches
Comprehensive and innovative service enhancing user experienceComprehensive lottery information services
3
11
Track record:
Accumulative winning:RMB 150+ million
Jackpot winnings:3 X RMB 5m+ , 37 X RMB 1m+, 148 X RMB 100k+
Number of fans:179,197
Auto tag-along purchasers:4,474
The star player and the followers fund
the purchase plan together
The star player gets a pre-set % from the prize for
his work and the rest is shared among all
purchasers
10%+Star
Followers
Purchase plan
Pool purchase vs.
total purchase
17%
3 Comprehensive and innovative service enhancing user experience Innovative purchase modes – pool purchase case study
A “purchase plan” initiated by a star player
Pool purchase
Share the prize
Enhances user
stickiness
Creates a sense
of community
“ Insights on Lotto”
In-depth “analyst reports”
To better choose
underlying matches
To facilitate
purchases
To project prize
amount
Intelligent betting
Probability analysis of sports match outcome based on
proprietary database
12
Comprehensive and innovative service enhancing user experience Innovative purchase tools
3
Help customers:
Prize calculatorInstant calculation of prize
amount based on sports match outcome
Adopted by Taobao lottery Adopted by Taobao lottery
“Lock –in numbers” purchase
Automatic purchase for a number oftimes with “lock –in numbers”
13
In 2013, mobile purchases represent15% of our total purchase amount.
In the 4th quarter of 2013, mobile purchases represent 18% of our total purchase amount.
In the 1st quarter of 2014, mobile purchases represent 26.4% of our total purchase amount.
Comprehensive and innovative service enhancing user experience Superior mobile Internet services across technology platforms
3
Wap Version iOS & Android HTML5 iOS & Android
Lottery purchase applicationSports match
info application
High User Activity Level Purchase Amount Breakdown
Active
Accounts(1)
14
(USD Millions)
4 Large and active user base
2013
purchase orders per
active user
$33441spending per active
user
158
243212
303
136
168
61
201
2010 2011 2012 2013
Existing customers New customers
294273
411
504
Reliable + Fast
is a true
15
Peers are pure companies
company
Full control of process =
5 Innovative and reliable technology
Internet
Internet
lottery
Entrepreneurship and Strategic Vision
LAW Man San
Founder, Chairman & CEO
Founded Shenzhen E-Sun Network Co., Ltd. in 2001
Pioneer in online lottery service industry in China for 10+ years
Executive MBA degree from Cheung Kong Graduate School of Business, Bachelor’s degree from
Wuhan University
Expertise in Internet / IT Industry/Gaming Industry
ZHENG Lei
COO
Joined in 2009
10 years of experience in the IT industry
Bachelor’s degree from Wuhan University
TIAN Zhaofu
CTO
Joined in 2012
Over 10 years of experience in information technology industry
MBA degree from Hong Kong University of Science and Technology
YU, Wensheng
Director of International
Business
Joined in 2013
Over 10 years of experience in sports and gaming industry
Bachelor’s degree from University of Westminster in UK
Know How in Finance & Capital Markets
PAN Zhengming
CFO
Joined in 2011
Over 8 years of experience in finance and legal industries
JD degree from University of Columbia Law School
LIU Punleung
CRO, VP – Finance & IR
Joined in 2011
Member of Hong Kong Institute of Certified Public Accountants and Institute of Internal Auditors
Bachelor’s degree in accountancy from City University of Hong Kong
16
Experienced and dedicated management team6
Financials
Company Overview
Investment Highlights
Growth Strategies
Appendix
27.1
40.2
30.2
54.9
18.5
25.7
38.0
28.0
42.9
14.5
2010 2011 2012 2013 1Q2014
Service Fee (Gross Revenue) Net Revenue
40.154.0
65.2 69.0 62.073.6
85.1105.9 97.2
51.232.6
48.6
88.0
114.0 120.2
177.0 169.7
11.3
17.417.3 18.8
17.6
20.520.0
25.321.1
9.3
7.6
5.151.4
71.482.5
87.879.6
94.1105.1
131.2
118.2
60.6
40.2
53.6
1Q2010 2Q2010 3Q2010 4Q2010 1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Welfare Lottery
Quarterly Purchase Amount
Voluntary suspension*
FinancialsSustainable high growth
17
(US$ mn)
* Between March and November 2012, we voluntarily scaled down our business and migrated our users
Quarterly Purchase Amount ComparisonRevenues
(US$ mn)
17.5% 19.4%
43.3%
17.5%
2010 2011 2012 2013
Q1
22.134.0
25.0
38.3
13.4
86.00%
89.50% 89.20%89.30%
92.85%
2010 2011 2012 2013 1Q2014
Gross profit Gross margin
6.32.2
0.7
17.5
4.5
24.30%
5.80% 2.50%
40.90%
31.59%
2010 2011 2012 2013 1Q2014
GAAP net income GAAP net margin
3.4 3.1 3.24.2 4.4
1.0
(0.8)
0.3 0.2 1.3*2.1
4.35.2
44.70%34.90% 33.60%
35.20%37.10%
17.40%
(22.50)%
4.80% 3.70%
16.30%19.60%
27.10%36.10%
1Q2011 2Q2011 3Q2011 4Q2011 1Q2012 2Q2012 3Q2012 4Q2012 1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Quarterly Non-GAAP Net Income***
* Gross profit = Net revenue – Cost of service
** Between March and November 2012, we voluntarily scaled down our business and migrated our users
*** Excluding one time tax refund and Donation
FinancialsStable gross margin and recovering net margin
Stable Gross Margin*
(USD in millions)
(USD in millions)
(USD in millions)
GAAP Net Income
18
Voluntary suspension**
Sales and marketing
FinancialsRecovering operating margin
19
Sales and
marketing
Operating
income
G&A and other
operating
expense /
income
R&D
Cost of service
* Total service fee as 100% and expenses excluding share-based compensation
Cost Structure - QuarterlyCost Structure*
49.3%
37.3%
18.9% 20.3%
18.2%
19.0%
26.4%
15.8%
5.6%
7.2%
13.4%
8.4%
13.3%
9.8%
9.9%
8.3%
13.5%
26.7%31.4%
47.2%
2010 2011 2012 2013 (1.4%)
15.6%
22.3%
32.1%
38.6%
24.2%
13.1%
15.1%
14.0%
19.2%
10.4%
8.1%
8.0%
7.9%
7.6%
9.5%9.0%
9.1%
6.9%
6.3%57.3%
54.2%
45.6%
39.1%
28.3%
1Q2013 2Q2013 3Q2013 4Q2013 1Q2014
Growth Strategies
Investment Highlights
Financials
Appendix
Company Overview
20
TechnologyEnhance infrastructure and security system
to ensure reliability and better user
satisfaction
Lottery purchase servicesFurther enhance specialized and
sophisticated services
Mobile servicesFocus on mobile services development
Strategic partnershipsPursue strategic partnerships and
acquisitions
Strengthen
brand name
Growth strategies
Appendix
Financials
Growth Strategies
Company Overview
Investment Highlights
China Lottery Market OverviewRegulatory framework and value chain
21
Source: iResearch
100
Ministry of Finance
(Regulator)
50 – 69
Prize pool for lottery
buyers
18 – 35
Fund for public
interests
Administration CostSales Commission Promotion Cost
Ministry of Civil Affairs
(Issuer) General Administration of Sports
(Issuer)
China Sports Lottery
Administration CenterChina Welfare Lottery Issuance
and Administration Center
LottoInstant Sports
MatchInstant Lotto
13 – 15
Distribution Cost
Social Welfare Lottery Sports Lottery
Provincial welfare lottery
issuance
and administration centers
Provincial sports lottery
administration centers
Regulatory Framework Lottery Revenue Sharing Scheme