(Hong Kong, PRC, 28 April 2016) PAX Global Technology Limited (“PAX” or the “Company”, together with its subsidiaries collectively known as the “Group”, HKSE stock code: 00327.HK), one of the world’s leading Electronic Funds Transfer Point-of-Sale Terminal (“E-payment Terminal”) Solutions Providers, published unaudited consolidated revenue of the Group for the 3 months ending 31 March 2016 (the “Period”).
The Group revenue increased by 13.3% to HK$672.4 million for the Period as compared to HK$593.3 million for the corresponding Period in 2015.
Mr. Jack LU, Chief Executive Officer of PAX, commented, “We are increasing our research and development (“R&D”) spending and enlarging the R&D team.” He added, “PAX is also proactively seeking for project initiatives and potential acquisitions that will create synergies and add value to our business, in order to further elevate the leading market position of PAX in the global market.”
During the Period, PAX revenue from overseas markets were up by 24.5% to HK$383.5 million, compared to HK$308.0 million in the first 3 months of 2015. In the United States and Canada (“USCA”) region, the ongoing Europay, MasterCard and Visa (EMV) migration shift and PAX’s diversified portfolio of multimedia and mobile payment terminals, contributed to robust sales. In Europe, the acquisition of Pax Italia S.r.l. in July 2015 continued to bear fruit. Sales in Germany and Eastern Europe are also on the increase. PAX management expects to win considerable and sustainable market share in Europe in coming years. Growth in Middle East was attributable to the launch of high-end payment terminal models, while growth in Asia Pacific (Except for Mainland China) (“APAC”) region was attributable to the introduction of mobile payment terminals in India. Growth in these overseas markets helped offset the impact of order delays in Brazil.
Overall, overseas markets contributed to approximately 57% of the total turnover of the Group for the Period, compared to 52% for the prior period in 2015.
During the Period, revenue from People’s Republic of China (excluding Hong Kong, Macau and Taiwan) (“China Market”) increased by 1.3% to HK$288.9 million, as compared to HK$285.3 million in first 3 months of 2015. Total volume of sales recognition increased but revenue growth was partly offset by the depreciation of the Renminbi (“RMB”). The average exchange rate of the RMB to the Hong Kong dollar (“HK$”) depreciated by 5.9% as compared to the corresponding period of last year. This devaluation affected the Group’s consolidated revenue that was denominated in HK$. China Market turnover contributed to approximately 43% of the total turnover of the Group for the Period, compared to 48% for the same period in 2015.
Nevertheless, the depreciation of the RMB is of positive benefit to the Group’s operations, especially toward the levels of profitability in overseas markets, due to the fact that the majority of sales and administrative costs (including research and development expenses) are denominated in RMB.
For mergers and acquisitions strategy, the Group proactively seeks service income in developed markets and sales channels in major overseas markets with an aim of becoming the forerunner in the payment industry. Turnover for a particular quarter is not representative for full year performance as sales of E-payment Terminals is associated with seasonality, policy changes and the concentration of customers’ order book.
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