2017 Interim results Disclaimer The information contained in these - - PowerPoint PPT Presentation

2017 Interim results

PAX Global – 2017 Interim results

Disclaimer

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The information contained in these presentation materials has been prepared by PAX Global Technology Limited ( “Company” or “PAX”) solely for use at the presentation to prospective investors for introduction of the Company. By accepting this document, you are agreeing to maintain absolute confidentiality regarding the information disclosed in this document. This document has not been independently verified. No representation or warranty, expressed or implied, is made as to, and no reliance should be placed

• n the fairness, accuracy, completeness or correctness of the information contained herein. The information contained herein shall be studied and

considered based on the circumstances at the time as the information has not and will not be updated to reflect progress of events after the date of the presentation. These materials contain statements that reflect the Company's current beliefs and expectations about the future as of the respective dates indicated herein. You should not place undue reliance on forward-looking statements. These forward-looking statements are based on a number of assumptions about the Company's operations and factors beyond the Company's control and are subject to significant risks and uncertainties. Accordingly, actual results may differ materially from these forward-looking statements. The Company expressly declaims any no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. There can be no assurance that the results and events contemplated by the forward-looking statements contained in these materials will in fact occur. The information contained in these materials may be of a price-sensitive nature and the provision of any such information shall constitute you and /or your representatives as “insiders” subject to the laws of Hong Kong or elsewhere. Accordingly, you may not deal in, and will inform your representatives of the restriction against dealing in, any shares in the Company in breach of any applicable laws.

PAX Global – 2017 Interim results

Agenda

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• 1. 2017 Interim financial highlights & results
• 2. Full year guidance

2017 Interim financial highlights & results

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PAX Global – 2017 Interim results

2017 interim highlights

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• Interim revenue: HKD 1,606M
• YoY change: +20.5%
• Overseas market, YoY change: +47.2%
• Interim gross profit margin: 41.7%
• YoY change: -190 basis points
• Interim R&D expenses: HKD 119M
• YoY change: +92.1%
• Interim profit attributable to the owners of the Company: HKD 265M
• YoY change: -14.7%
• 2017 1H M&A activities
• 4 completed/ contracted transactions
• Proposed 2017 interim dividend: HKD 0.04 per ordinary share

PAX Global – 2017 Interim results

36% 9% 7% 16% 32%

Financial results – Revenue by region

*Exclude China; **Constant currency basis

China

• 12.7%
• 8.4%**

LACIS

+146.8%

APAC*

+22.6%

USCA

+55.4% 1H 2017: HKD 519M 1H 2016: HKD 595M 1H 2017: HKD 149M 1H 2016: HKD 96M 1H 2017: HKD 570M 1H 2016: HKD 231M 1H 2017: HKD 105M 1H 2016: HKD 85M

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EMEA

• 19.2%

1H 2017: HKD 263M 1H 2016: HKD 326M

HKD KD 1,6 ,606M +20.5%

PAX Global – 2017 Interim results

Financial highlights – Regional updates

EM EMEA (HKD 263M)

Europe: i) Expanding European footprint by

acquiring CSC Italia S.r.l ii) Encouraging performance in Eastern European countries

Middle East: Shipments slightly slowed down

• 19.2%

LA LACI CIS (HKD 570M)

Brazil: i) Successful launch of traditional payment terminals

ii) Maintain dominant leading position in mPOS market

Argentina and Russia: meaningful growth expected in the

future

+146.8%

USC USCA (HKD 149M)

US: i) PAX is in growth stage

ii) Keeps on gaining more new customers iii) Will target three market segments:

• integrated multilane for large chain stores
• new generation cash registers for small to

medium sized merchants

• unattended petroleum solutions

+55.4%

APAC C (HKD 105M)

Korea: Expanding into Korea market by a proposed

acquisition of a Korean subsidiary

India and Indonesia: growth continues

+22.6%

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Notes: APAC (Asia Pacific exclude mainland China); LACIS (Latin America and Commonwealth Independent States); EMEA (Europe Middle East and Africa); USCA (the United States of America and Canada); China (the People’s Republic of China exclude Taiwan, Hong Kong, Macau).

Ch Chin ina (HKD 519M)

i) Market remains volatile:

• influence of the interchange rate policy
• keen market competition

ii) Shipment volume increased by 8% iii) Rapid change in technology and market’s needs

• 12.7%

PAX Global – 2017 Interim results

Financial results – Operating expenses

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For the period ended 30 June 2017 (HKD ‘000) For the period ended 30 June 2016 (HKD ‘000) +/- Selling expenses 195,083 125,759 +55.1% Administrative expenses 209,885 132,917 +57.9% R&D expenses (included in administrative expenses) 119,290 62,105 +92.1%

• Selling expenses +55.1%
• Increase in sales and after-sales service staff headcounts

1H17 average headcounts: approximate 600; 1H16 average headcounts: approximate 400

• Increase in advertising expense
• Administration expenses +57.9% ( R&D expenses +92.1%)
• Increase in R&D staff headcounts

1H17 average headcounts: approximate 950; 1H16 average headcounts: approximate 600

• Increase in certification expense

PAX Global – 2017 Interim results

Financial results – Key balance sheet items movement

Key Items As at 30 June 2017 As at 31 December 2016 As at 30 June 2016 (HKD ‘000) (HKD ‘000) +/- (HKD ‘000) +/- Trade and bills receivables 1,743,572 1,347,446 +29.4% 1,453,756 +19.9% Goodwill 87,026 64,583 +34.8% 69,157 +25.8% Prepayment for land use rights 83,333

• n/a
• n/a

Available-for-sale financial asset 18,282

• n/a
• n/a
• Trade and bills receivables +29.4%
• Comparing to the balance as at 30 June 2016, the increase is mainly driven by sales growth
• No significant change in credit risk and repayment pattern
• Goodwill +34.8%
• Acquisition of 60% equity stake of CSC Italia S.r.l
• Prepayment for land use rights
• Entered into an agreement on purchasing land use rights of a land at Shenzhen (will be China headquarters of the Group)
• Available-for-sale financial asset
• Invested in 20% equity stake of Onslip AB (a Sweden company providing software and solution services)

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Full year guidance

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PAX Global – 2017 Interim results

FY 2017 guidance

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• Topline: +5-15%
• Gross profit margin: 40%~42%
• Operating profit: approximate the trend as interim

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Q & A

PAX Global – 2017 Interim results

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QR 55 E500

• Launched in 1H 2017
• Configured with camera & color screen
• Target NFC & QR code payment market
• Launching by 2H 2017
• Facing small and medium merchants
• Address customers’ need for one-stop payment platform with

payment functions

Appendix: New products & services

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Omni-payment gateway service – PAXPAY Secured cloud-based SaaS platform – PAXSTORE

• Easily integrated with APPs
• Provides SDK for applications directing to WeChat Pay or Alipay

for payment

• A secured cloud-based (SaaS) platform based on amazon

web services

• Key features

➢ Application management ➢ Terminal management ➢ Value-added services

PAXPAY

Merchants

Alipay WeChat Pay

PAX Global – 2017 Interim results

Investor relations – IR contacts

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• Ethan Cheung, Chief Financial Officer
• Calvin Pei, Assistant Vice President - Corporate Strategy & Finance
• Steven Chen, Assistant Vice President - Corporate Strategy & Finance

Email: ir@pax.com.hk TEL: +852 2500 8510