The net revenue for the 12 months ending December 31, 2020, was RMB21.8m, showing a 45.9% decrease compared to the same period in 2019. The operating loss for the supplier was RMB190.8m, down 70.3% from 2019, after deducting operating expenses of RMB222.6m. However, excluding irregular or non-cash expenses, the operating loss stood at RMB135.4m, down 46.3%. The net loss attributable to 500.com was RMB223.2m, down 65.7% from 2019. Excluding irregular expenses, the net loss amounted to RMB138.5m, compared to RMB245.7m in 2019.
For the three months ended December 31, 2020, net revenue was RMB9m, a slight increase from the RMB8.6m generated in Q4 2019. The main contribution to net revenues during Q4 2020 came from the company’s online lottery betting and online casino in Europe through its TMG subsidiary, accounting for 62.2% of the total net revenues, amounting to RMB5.6m. This increase in revenue was primarily due to a rise of RMB2.3m in revenue contribution from TMG and an increase of RMB600,000 in sports information services in China.
Operating expenses for the fourth quarter amounted to RMB60.9m, down 34.2% from RMB92.5m in Q4 2019, but up 8.4% from RMB56.2m in Q3 2020. The reduction in operating costs in Q4 2020 was mainly due to a decrease of RMB13.7m in bad debt provision and a decrease of RMB11m in depreciation related to an office lease in Shenzhen and impairment of acquired intangible assets in 2019. Other savings in operating costs include a decrease of RMB6.1m in rental expenses and RMB4.9m in employee expenses due to a reduction in headcount. Additionally, there was a decrease of RMB1.2m in traveling expenses and RMB1.1m in marketing costs due to a change in TMG’s marketing strategy.
Excluding irregular and non-cash expenses, the net loss attributable to 500.com for Q4 2020 was RMB37.5m, compared to RMB69.4m in Q4 2019 and RMB31.6m in Q3 2020.
Recently, the supplier shifted its business model to focus on the cryptocurrency and blockchain industries. Xianfeng Yang was appointed as the new chief executive in January, bringing in his experience from leading the construction and operation of the big data center for 500.com’s subsidiary, Loto Interactive. In January, 500.com announced its intention to acquire a majority stake in Loto Interactive for around HK$105m (£9.9m/€11.2m/$13.5m). Additionally, the company decided to purchase Bitcoin mining machines worth $14.4m from undisclosed sellers, with plans to acquire up to 15,900 more machines in 2021.
