AGTech’s Hardware division primarily supplies both Sports Lottery and Welfare Lottery, and has lottery hardware deployed in multiple provinces, cities, municipalities and autonomous region across China. The Group is one of the leading manufacturers and suppliers in China of traditional lottery terminals, and paper scratch card sales hardware (instant ticket verification terminals, “IVT(s)”). The Group’s Hardware division continues to focus on research and development in order to broaden and improve its product spectrum and develop new hardware ranges.

In 2019, the Group won 12 lottery hardware tenders, accounting for over 32% of the overall sports lottery terminal tenders in China during the same period, calculated by the number of terminals. We did especially well in new android sports lottery terminal tenders in China, winning over 43% of such tenders during the same period, calculated by the number of terminals. These winnings further strengthened the Group’s top-tier position in China’s lottery hardware market and demonstrated the continued competitiveness of the Group’s lottery terminals. Looking forward, the Group will continue to pursue tenders to supply to the lottery hardware market as opportunities to bid for new contracts arise throughout the year.

Alibaba Group’s new retail initiatives present a great opportunity for the further development of the Group’s hardware business. Many of the hardware supplies required under such new retail initiatives share similar technology and components that underlie the lottery hardware products supplied by the Group throughout the years. We believe our Hardware division continues to be well positioned to take advantage of such opportunities in the foreseeable future.

In December 2020, AGTech’s intelligent POS won the first prize in China Household Appliances User Experience-Intelligent Payment 2020. Under the circumstances of Chinese economy being transformed from high-speed development to high-quality development, the upgrading and transformation of intelligent hardware industry is facing the opportunity and challenge of how to strengthen generic technology platform construction, to promote industry-wide and cross-industry technical exchange, to facilitate connection and innovation of upstream and downstream sectors of the industry chain and large, medium and small-sized enterprises.