PAX Global Technology Limited · HKEX:327
PAX Global Technology — FY2019 Earnings Presentation
24 slides from PAX Global Technology's earnings presentation, 2020
Slide 1: PAX Global Technology Limited 2019 Annual Results
PAX Global Technology Limited (327.HK) 2019 Annual results 1
Slide 2: Disclaimer
Disclaimer The information contained in these presentation materials has been prepared by PAX Global Technology Limited ( “Company” or “PAX”) (incorporated in Bermuda with limited liability) solely for use at the presentation to prospective investors for introduction of the Company. By accepting thi
Slide 3: Agenda
Agenda ❖ Year 2019 highlights • Key milestones • 2019 annual results snapshot ❖ Year 2020 recent updates • Effect from coronavirus disease • Corporate actions • China business strategic adjustment ❖ Strategies & targets • Corporate strategies • Financial targets 3 PAX Global Technology Limited (327.
Slide 4: Key milestones in 2019
Key milestones in 2019 Record-high Strong contribution Improved Outperformed from Android smart AR turnover days financial targets Revenue solution HK$ 4,926 million (Day) Revenue contribution 158 Net profit 20%+ 155 Topline +11.6% HK$ 625 million GP margin 39.5% Proposed final 134 OP margin 15.5% d
Slide 5: 2019 Annual results snapshot
2019 Annual results snapshot • Revenue: HK$ 4,925.7 million YoY up 11.6%, driven by strong overseas market performance (+21.3%) • Gross profit: HK$ 1,944.8 million YoY up 19.6%, gross profit margin: 39.5% (FY 2018: 36.8%) • Operating profit: HK$ 761.6 million YoY up 19.1%, operating profit margin: 1
Slide 6: Robust growth of overseas markets
Robust growth of overseas markets HK$ 4,529 M (+21.3% yoy) LACIS region Record-high overseas revenue Accounted for more than 90% of the Group’s revenue • Gained significant market traction from newly launched smart solutions A930 and A50 in Brazil • Captured more market shares in Mexico, Argentina a
Slide 7: Robust growth of overseas markets
Robust growth of overseas markets HK$ 4,529 M (+21.3% yoy) APAC region Record-high overseas revenue Accounted for more than 90% of the Group’s revenue • Selected as one of the main smart terminal solution suppliers by many local acquiring institutions & payment service providers • Continued high gro
Slide 8: Increasing demand of Android smart solutions
Increasing demand of Android smart solutions • Contributed more than 20% of the Group‘s total revenue in FY 2019 Smart ECR – E800 • Launched more than 15 Android models Smart Mobile - A77 Smart Tablet - AR8 • Increasing interests for PAX SmartPOS & Smart ECR solutions globally Smart Mobile - A920 Sm
Slide 9: Effects on Coronavirus disease (COVID-19)
Effects on Coronavirus disease (COVID-19) • Supply chain management (Short-term impact on shipment) ➢ EMS manufacturing in China ❖ More than 90% of its production capacity has been recovered ➢ Major suppliers in China ❖ More than 90% of the suppliers have recovered their production capacities • Cust
Slide 10: China business strategic adjustment
China business strategic adjustment Revised strategy in China in 2019 • Focus more on serving reputable and strong banks and third-party payment processors Structural adjustments • Optimize and streamline the operating structure of China business ➢ Headcounts reduction as of 30 March 2020: ~160 ➢ 20
Slide 11: Corporate actions
Corporate actions Shares buyback Cash dividend Share option scheme • Granted to employees in 2019 In Jan & Feb 2020 + 50% • ~ 82.5 million shares Repurchased 12.6 million shares Proposed final dividend of (7.5% of total number of shares) (1.15% of its ordinary shares) HK$ 6 cents per share • 2019 ex
Slide 12: Corporate strategies
Corporate strategies 12 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 13: Corporate strategies
Corporate strategies Raise PAX brand recognition Investment and M&A Increase resources in key overseas markets Increase investment in R&D Reinforce global sales network 13 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 14: Raise PAX brand recognition
Raise PAX brand recognition • Roll out diversified Android product series and software products • Introduce dedicated market strategies and channel agency policies • Support global partners to become superior local companies • Exhibit in global payment and fintech events, host global and regional pa
Slide 15: Increase resources in key overseas markets
Increase resources in key overseas markets • Riding on the global cashless trend, accelerate the overseas business layout and boost PAX’s market share North America Europe Asia Pacific Market: United States Markets: UK, France, Spain Markets: India, Japan, Australia and New Zealand 15 PAX Global Tec
Slide 16: Reinforce global sales network
Reinforce global sales network • Broaden channel sales networks in Asia Pacific, Middle East, Africa and other regions • Set up subsidiaries or acquire local distributors to further expand sales channels • Explore the feasibility of setting up R&D teams and production bases overseas • Construct a cl
Slide 17: Increase investment in R&D
Increase investment in R&D • Diversify revenue stream from single hardware business through R&D investment Hardware Software ➢ Focus on the next generation ➢ Software: gateway products of smart product series ➢ Platform: PAXSTORE, PAXPAY ➢ Broaden the application scenarios of self-service ➢ Cloud-ba
Slide 18: Investment and M&A
Investment and M&A 1 Incubate potential companies through PAX’s investment 2 Set up overseas subsidiaries in consideration of the market conditions 3 Invest in potential distributors and partners 4 Acquire companies with synergies globally 18 PAX Global Technology Limited (327.HK) – 2019 Annual resu
Slide 19: 3 years financial targets
3 years financial targets FY 2020 Topline： Flattish Gross profit margin: Above 39% Operating profit margin: Above 15% FY 2021 Topline： Low double-digit growth Operating profit margin: Above 15% FY 2022 Topline： Low double-digit growth Operating profit margin: Above 15% 19 PAX Global Technology Limit
Slide 20: Investor relations contacts
Investor relations contacts • Calvin Pei, Assistant Vice President - Corporate Finance & Strategy • Mina Pang, Investor Relation Manager Email: ir@pax.com.hk Tel: +852 2500 8510 20 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 21: Appendix: revenue by geographical region
Appendix: revenue by geographical region FY 2019 FY 2018 18.8% 15.5% 51.1% HK$ 4,926 54.6% HK$ 4,415 million 15.0% +11.6% million 15.4% 8.1% 8.6% 7.0% 5.9% Latin America and the Commonwealth of Independent States China Europe, the Middle East and Africa Asia Pacific (excluding China) United States a
Slide 22: Appendix: financial summary
Appendix: financial summary For the year ended 31 December Income statement 2019 2018 HK$’ 000 HK$’ 000 Revenue 4,925,733 4,415,409 Cost of sales (2,980,900) (2,788,728) Gross profit 1,944,833 1,626,681 Other income 79,056 76,929 Other gains 12,774 7,577 Selling expenses (465,657) (437,809) Administ
Slide 23: Appendix: condensed consolidated balance sheet
Appendix: condensed consolidated balance sheet As at 31 December 2019 2018 HK$’ 000 HK$’ 000 Non-current assets 522,520 431,818 *Right-of-use assets 221,347 - Property, plant and equipment 69,610 72,368 Others 231,563 359,450 Current assets 6,196,703 5,343,736 Cash and cash equivalents 3,230,005 2,1
Slide 24: Appendix: working capital
Appendix: working capital As at 31 December 2019 2018 +/- HK$ ‘000 HK$ ‘000 Trade and bills receivables 1,513,374 1,919,408 -21.2% Inventories 1,301,459 1,182,015 +10.1% Trade and bills payables 1,382,487 1,190,447 +16.1% Cash and cash equivalents 3,230,005 2,160,192 +49.5% Turnover days As at 31 De