Hong Kong, China – 11th August, 2015
PAX Technology, a global leader in the provision of secure electronic payment terminal solutions, its parent company – PAX Global Technology Limited (“PAX” or the “Company,” together with its subsidiaries collectively known as the “Group” , HKSE stock code: 00327.HK), published half-year results for the 6 months ended 30 June 2015 (the “Period”).
In the first half of 2015, revenue of the Group rose 10.1% to HK$1,107.6 million, and net profit surged 55.9% to HK$309.0 million with basic earnings per share at 27.9 HK cents (1H2014:18.7 HK cents). Revenue from overseas markets increased by HK$102.7 million to HK$555.4 million, representing a gain of 22.7%. The Board of Directors of the Company resolved to declare an interim dividend of HK$0.02 per ordinary share for the first time. Revenue from the People’s Republic of China excluding Hong Kong, Macau and Taiwan (“China Market”) slightly decreased 0.1% year-on-year or by HK$0.7 million to HK$552.2 million. Gross profit margin for the period was 41.5%, a rise of 3.7 percentage points compared to 37.8% for the six months ended 30 June 2014. This was mainly due to an increase of contribution from overseas sales and successful cost reduction. In addition, PAX was recognized as a High and New Technology Enterprise under the CIT Law and is eligible to enjoy a preferential tax rate of 15% for 3 years from 2015 to 2017.
During the Period, the sales of E-payment Terminal generated the majority of the Group’s revenue. Total sales revenue of E-payment Terminals rose 11.6% to HK$1,050.4 million. The period sales volume of E-payment Terminal was close to 1.5 million units. The number of distributors and partners increased to nearly 90 from approximately 30 in 2012. PAX has been recognized as one of the three major international mainstream brands. According to the Nilson Report published in July 2015, PAX is the third largest E-payment Terminal supplier in the world, with a market share of 10.0%, up from 9.2% for the previous year. In 2014, PAX Global’ s terminal shipments exceeded three million, surging by 46.9% compared to 2013, representing the highest growth rate among the top three suppliers in the world and showing the sustained and steady growth of PAX.
Revenue from overseas markets was HK$555.4 million in the period, representing an increase of 22.7% as compared to HK$452.8 million in the first half of 2014. Most overseas business units recorded notable growth especially in Latin America and the Commonwealth of Independent States and the United States of America and Canada Region business units. North Africa, the Middle East and South America have become new focal points for business growth of PAX. Leveraging the experience of continuous overseas markets expansion in the past 14 years and the well-developed sales channels, PAX’s branding, product techniques, quality and its good reputation have been affirmed in the international markets. PAX has become the only Asian listed company in the league with other top competitors worldwide. Subsequent to the encouraging results achieved in Brazil and the Middle East in 2014, the overseas sales revenue of PAX surpass China for the first time and reached 50.1% compared with 45.0% in the first half of 2014.
During the Period, revenue from China Market slightly decreased by 0.1% to HK$552.2 million (1H2014: HK$552.9 million) .The growth in the China Market turned flattish in the first half of 2015, and is expected to pick up in the second half. China Market revenue contributed 49.9% of total revenue (1H2014: 55.0%). Shipment to the third party payment service providers accounted for major revenue contribution.
Net profit margin for the period was 27.9%, a substantial rise of 8.2 percentage points compared to 19.7% for the six months ended 30 June 2014. This was mainly due to improvement of gross profit margin, increase of other income and income tax credit. As of 30 June 2015, the Group maintained strong financial position with cash and short-term bank deposits of HK$ 1,686.8 million and zero borrowing. Based on the established advantages in the E-payment Terminal market, PAX would actively seek M&A opportunities and continue the expansion in the payment value chain.
PAX made its first international acquisition in July 2015, buying 70% of its Italian channel partner, PAX Italia S.r.l, part of a wider strategy to further penetrate the Eurozone region. Being the system integrator, PAX Italia integrates patent software of numerous European banks into the Points-of-Sales platform of the Group and offers after sales services for a wide range of product models under the Group. Through providing strong financial support and various assistance to the local distributors, with hardware and software services, the deal will facilitate the Group’s business expansion in Europe, Middle East and Africa.
Mr. Jack Lu, Chief Executive Officer of PAX, said: “International markets account for 80% of global sales of secure electronic payment terminals, therefore the strategic focus for PAX is to continue investing heavily in R&D, to maintain a solid product roadmap and to ensure we continue delivering the highest levels of product quality and technical support to our partners and customers”.
About PAX (www.pax.com.cn)
PAX Technology Limited (“PAX”) is an innovative global provider of electronic payment solutions, offering world-class, cost-effective and superior quality products. Building on its service excellence and proven leadership position, PAX is one of the fastest growing payment industry suppliers with state-of-the-art manufacturing facilities, excellent R&D capabilities and a worldwide network of sales and channel partners. PAX is listed on the Hong Kong stock exchange as PAX Global Technology Ltd. (0327.HK).