PAX Global Technology Limited (“PAX” or the “Company” or the “Group”, HKSE stock code: 00327.HK), one of the world’s leading providers of electronic payment terminal solutions and related services, is pleased to announce the unaudited interim financial results for the six months ended 30th June 2018 (the “Period”).
The Group achieved impressive international growth during the period, contributing to the Group’s revenue increase of 16.8% to HK$1,875.6 million. Profit attributable to the owners of the Company decreased by 2.4% to HK$258.5 million. The basic earnings per share were HK$23.5 cents (1H2017: HK$23.8 cents). The Board of Directors of the Company resolved to declare an interim dividend of HK$0.04 per ordinary share.
PAX has consistently expanded its international footprint in recent years and the Group’s international markets (i.e. outside of China) accounted for 84.8% of total turnover during the first half of 2018, with sales revenue from international markets increasing by 46.4% to HK$1,591.2 million (1H2017: HK$1,087.0 million), with particularly impressive performance coming from the EMEA, LACIS, and APAC regions.
PAX maintained steady growth momentum in Europe, the Middle East, and Africa. More acquiring banks, payment service providers and retail groups switched to use PAX’s innovative solutions, with particular interest growing for the innovative A-series series, a family of state-of-the-art Android payment terminals.
The growing demand for PAX's Linux platform payment terminals was enhanced by increasing popularity among merchants for MiniPOS devices, standalone compact ‘paperless’ terminals. In particular, large volume orders were placed for MiniPOS deployment in Poland where the government launched a ‘cashless’ initiative earlier this year.
In the Middle East, PAX maintained a leading position and in Africa growing market share was recorded where a shift is taking place towards usage of higher performing Android and MiniPOS terminals.
The Group’s PAXSTORE software solution, a combination of an open platform appstore marketplace with an advanced terminal management system, has been successfully piloting in more than 25 countries worldwide, most of which are within the EMEA region.
In Latin America and the CIS (Confederation of Independent States) region, strong demand continued for all PAX terminal models, with strong sales recorded yet again in Brazil, where our wide distribution network further strengthened market penetration.
During the 2018 FIFA World Cup in Russia, PAX’s mobile terminals enabled thousands of football fans to conduct cashless transactions at stadium locations. PAX also began deploying the E-series family of new generation electronic cash register products, in Russia as well as many other countries.
In the United States and Canada, stable orders continued to be taken for the E-series products which were launched in late 2017. During the first half of 2018, PAX was engaged in ongoing business negotiations with prospective new customers, and substantial orders are expected to materialise during the second half of this year.
In the Asia Pacific region, the newly formed subsidiary in Japan is developing a country-wide sales network, with the first orders having being won during the first half of this year. PAX expects the Japanese market to become an important one in the APAC region.
Following the acquisition of Kwang Woo Information & Communication Co., Ltd., a Korean payment terminal provider, the Group leveraged its extensive sales network to tap into the Korean market, with plans now well underway to accelerate product integration and grow our local market share.
Across most APAC countries, demand for PAX's new-generation Android smart terminals continues to grow.
Shipments of PAX terminals in China demonstrated an upward trend in the first half of this year, where fast moving market changes are creating new opportunities for the Chinese payment terminal industry in general, and where competition is also intensifying. Riding on the trend of mobile payments using Quick Response (QR) code technology, PAX successfully launched a new generation of QR code-reading payment terminals at the beginning of the year, delivering new and streamlined payment experiences to Chinese customers.
Mergers & Acquisitions
PAX continues to proactively pursue merger & acquisition opportunities. The Group further optimized the business structure by enhancing the diversity of payment related products and services of the Group’s hardware and software divisions. In 2017 and 2018, the Group completed a number of M&A projects, including subsidiary acquisitions, minority stake investment and fund investment in Korea, Italy, Sweden, Shanghai and Beijing, as well as establishing subsidiaries in Japan and India.
In the first half of 2018, the Group increased its investment in a Beijing based fund to a total of RMB 85 million. This fund primarily invests in high-quality emerging technology and start-up projects. The Group believes that an increase in the fund’s investment will help strengthen the financial technology advantages of PAX, so as to be better positioned to respond to the rapidly changing market environment in China.
Mr. Jack LU, Chief Executive Officer of PAX, commented:
“As FinTech develops at a fast pace worldwide, the increasing popularity of innovative payment methods such as mobile wallets, Near Field Communication (NFC) and QR code payment is fuelling rapid growth in electronic transactions. As a leading company in today’s global payment terminal industry, PAX is dedicated to the pursuit of excellence, adhering to a corporate culture of continuous innovation and excellence so that we can offer best-in-class product quality and a continually evolving product roadmap for our customers"
"During the first half of 2018, PAX launched a new family of smart Android terminals and QR code-reading devices, offering innovative features which are helping to deliver new payment experiences to consumers and merchants alike. The Group is now also deploying our new generation electronic cash register products, the E-series, in many countries around the world, delivering an all-in-one integrated retail payment solution to merchants."
"Looking to the future, the Group will continue to focus on product innovation to meet growing market demand, while flexibly grasp the opportunities presented by market development, thereby enabling us to expand global presence of business and enhance the Group's leading position in the international payments industry."
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