The Zhitong Finance App learned that Dongwu Securities released a research report saying that according to data from the Ministry of Finance, in 2023, China Lottery's cumulative sales volume was 579.696 billion yuan, an increase of 36.51% over the previous year. It is worth mentioning that the 2023 growth rate was achieved based on the high base of the 2022 World Cup. The bank believes that the lottery industry will grow rapidly in the consumer sector in 2023. The current level of lottery ticket consumption per capita in China still has some room for growth compared to some overseas developed countries. With the development of new lottery varieties, it is expected that it will continue to grow in the future. Related targets: Songyang Resources (603863.SH), China Sports Industry (600158.SH), Hongbo Co., Ltd. (002229.SZ), etc.

The views of Soochow Securities are as follows:

In 2023, China's lottery industry was booming. Under the high base of the World Cup, lottery sales still achieved a high increase.

According to data from the Ministry of Finance, in 2023, China Lottery's cumulative sales volume was 579.696 billion yuan, an increase of 36.51% over the previous year. It is worth mentioning that the 2023 growth rate was achieved on the basis of the high base of the 2022 World Cup (November and December 2022, benefiting from the World Cup, monthly lottery ticket sales were +57% and +92% year-on-year). Since 2021, lottery sales in China have maintained double-digit growth, and the lottery industry continues to be booming.

Sports lotteries have been growing faster than welfare lotteries in recent years.

Lottery tickets licensed by China's State Council include welfare lotteries and sports lotteries. Among them, the Ministry of Civil Affairs is responsible for welfare lotteries, and the General Administration of Sports is responsible for sports lotteries. Sports lottery is a type of lottery that is larger in scale and has recently been growing at a higher rate. In 2023, sports lottery achieved sales of 385.3 billion yuan, +39% year on year; welfare lottery sales reached 194.4 billion yuan, +31% year over year. Against the backdrop of a high base in 2022, sports lotteries still achieved a higher year-on-year growth rate in 2023.

By type of lottery: The growth rate of traditional lotteries is slowing down, that is, open lotteries are growing faster; pay attention to the development of new lottery types such as video lotteries.

The main types of lottery tickets in China include lotto, quiz, instant play, keno, and video. Among them, sports lottery mainly includes quiz, lotto, instant play, and video types; lottery mainly includes lotto, instant play, and keno types. Lotto and quiz lottery are the main types. The cumulative sales volume for lotto, quiz, instant play, keno, and video games in 2023 was 1768/2465/1190/374/02 billion yuan; year-on-year growth rates were 14%/36%/100%/30%/156%, respectively. As can be seen, the growth rate of traditional mainstream lottery games such as lotto and quiz is lower among all categories; the opening of the category benefited from the recovery of offline consumption, and there was a good recovery in 2023; the growth rate of new types in the early stages, such as the video type, was higher, achieving sales of 1.53 million yuan in 2023, which is a significant increase from 600,000 yuan in 2022.

Risk warning: residents' willingness to spend falls short of expectations, changes in lottery management policies, decline in residents' willingness to buy lottery tickets, etc.