This morning, AGTech announced a framework agreement with Sports Lottery Center of Guangdong Province. AGTech's wholly owned subsidiary will carry out marketing and promotion activities as well as sales and operations for sports lottery throughout offline channels of Alibaba Group (i.e., Alibaba Group Holding Limited and its subsidiaries) in Guangdong Province.
This news is significant in two ways:
1. Guangdong is one of the wealthiest provinces in China with $12,000 GDP per capita and a population of more than 110 million people. Guangdong is also one of the biggest market for lottery sales.
2. Sales for Sports Lottery throughout offline channels of Alibaba Group means retail sales of the lottery products. Retailers get up to 10% commission for every lottery product they sell.
I am sure we will get more details as these agreements are executed. Slowly but surely the pieces are falling into place for AGTech's lottery business.
Perhaps this was the reason for 10% move in the stock two days ago?
Disclosure: I am/we are long BABA. AGTEF.