Pax Global Technology Limited · HKEX:327
Pax Global Technology — FY2019 Earnings Presentation
23 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
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 this document,
Slide 3: 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 • Corporate strategies 3 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 4: 2019 annual results snapshot
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% dividend FY 2017 FY 2018
Slide 5: Revenue, gross profit and net profit
• 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: 15.5% • Profit for the year: H
Slide 6: Overseas revenue: LACIS and EMEA regions
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 and Russia USCA HK$ +32% 346 M EMEA
Slide 7: Overseas revenue: APAC and USCA regions
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 growth momentum, with a record high o
Slide 8: Android smart solutions contribution
• 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 Smart Mobile – A50 8 PAX Global Technology Limi
Slide 9: Effect from coronavirus disease
• 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 • Customers’ orders (Uncertainty remains) ➢ COVI
Slide 10: Revised strategy in China in 2019
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 ➢ 2019 one-off cost: ~ HK$ 6 million ➢ E
Slide 11: Corporate actions: buyback, dividend, share option scheme
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 expense: ~ HK$ 39 mi
Slide 12: Corporate strategies
Corporate strategies 12 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 13: Corporate strategies overview
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
• 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 partner conferences 2019 World
Slide 15: Accelerate overseas business layout
• 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 Technology Limited (327.HK) – 2019 Annual resu
Slide 16: Broaden channel sales networks
• 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 cloud-based technical information
Slide 17: Increase investment in R&D: hardware and software
• 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-based technical info exchange
Slide 18: 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 results
Slide 19: 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 19 PAX Global Technology Limited (327.HK) – 2019 Annual results
Slide 20: Revenue by region FY2019 vs FY2018
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 and Canada 20 PAX Global Technology Limite
Slide 21: Income statement
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) Administrative expenses (743,466) (5
Slide 22: 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 2,160,192 Trade and bills receivables 1,513,374 1,
Slide 23: Working capital and turnover days
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 December 2019 2018 +/- Trade