DJI Holdings to set up joint venture with Heilongjiang Sports Bureau

Saturday 12th of September 2015

DJI Holdings plc, a licensed promoter and distributor of Chinese sports and welfare lottery products, announced it has entered into a cooperation agreement with Heilongjiang Sports Bureau to establish a joint venture and a placing of new ordinary shares to raise £5.6 million ($8.6 million) before expenses.

DJI and HSB intend to establish a joint venture company, with 40 percent owned by DJI and 60 percent by HSB, and intend to seek a listing on a New York stock exchange in the foreseeable future.

DJI will provide funding of RMB20 million ($3.1 million) cash to the JV and HSB will provide a further RMB 30 million.

The aim of the HSB Joint Venture is to provide funding and support services to all of HSB’s commercial activities, especially football and winter sports.

The HSB joint venture will include a business-to-business online booking system for sports.

Based on DJI’s technology, the system is expected to generate significant incremental revenue and both partners believe the online booking market to be substantial, DJI said in a press release.

The JV has agreed terms with three of China’s largest online portals to sell and promote its B2B system from November 1, giving it direct access to their customer bases. A full e-commerce platform for the HSB is expected to follow in 2016.

Heilongjiang, located in the north east of China, is the country’s sixth largest province by area with a population of approximately 40 million.

HSB operates or is responsible for all sports lottery activities in the province: in 2014 sales were RMB 7.03 billion, an increase of more than 60 percent per on 2013. HSB also owns and/or operates an extensive portfolio of sporting venues and facilities across the province, including Yabuli, China’s largest ski resort.

Beyond the online booking system, it is expected that the HSB Joint Venture will have exclusive lottery contracts with HSB for its lottery distribution channels including its official web site, mobile platform, and lottery stores.