PAX Technology announces 2021 interim financial results

PAX Global Technology Limited (HKSE stock code: 00327.HK), the world’s leading provider of electronic payment terminal solutions, published impressive financial results for the six months ending 30th June 2021. 

With COVID-19 significantly impacting the global economy, governments and financial institutions all over the world focused, more than ever before, on initiatives to promote increasingly cashless societies, resulting in record levels of electronic payment acceptance as retailers and merchants  accelerated their adoption of payment terminal technology, such as PAX Android SmartPOS products connected to the industry-leading PAXSTORE platform (a cloud-based terminal management system with appstore functionalities).

PAX demonstrated stability in supply chain management and product delivery, enabling acquiring banks and payment service providers to accelerate terminal deployment during the first half of the year, resulting in worldwide PAX sales revenues growth of 30.6% in the first half of 2021, to HK$ 3,318.7 million (circa US$ 426.3 million).

PAX Android SmartPOS & SaaS PAXSTORE deliver new capabilities for merchants

The challenges created by the pandemic meant that merchants increasingly recognised the value of  digitalized business intelligence and, thanks to PAX’s innovative Android devices and the cloud-based PAXSTORE platform, even the smallest of merchants can now fully embrace such digitization under the 'new normal'. Sales of PAX Android SmartPOS devices increased by 86% compared to the same interim period last year. 

The PAXSTORE ecosystem continues to gain traction globally. There are currently well over 3 million terminals connected, via which payment service providers allow millions of their merchants all over the world to access an increasing array of over 5,000 software apps covering payment, ordering, ticketing, inventory handling, marketing & loyalty initiatives, tax refunds, etc.

Revenues generated from SaaS solutions surged by 319.6% in the first half of 2021. As global shipments of PAX Android terminals increase, the contribution from PAXSTORE's SaaS solutions will also increase in future. 

Jack Lu, Chief Executive Officer of PAX, stated: “Continuous innovation with a superior quality-oriented approach is the cornerstone of the PAX brand. The Group will prioritize Android payment terminal solutions as the key pillar of our Research & Development, and will roll out more innovative products for diversified business application scenarios. PAX will be investing more in SaaS solutions with a view to strengthening cooperation with more acquirers and value-added software application providers to continue building a global SaaS ecosystem.” 

PAX strengthens its international leadership position

Products and solutions designed by PAX are used by acquiring banks and payment service providers in over 120 countries, mainly delivered through the company's well established network of reputable and experienced global channel partners. Strong sales performance resulted in a 63.2% revenue increase in the EMEA region and 71.7% in North America.

Europe, Middle East and Africa (EMEA)

The competitive edge offered by the cloud-based PAXSTORE platform and the company's elegant range of Android SmartPOS products contributed to EMEA revenues of HK$ 881.1 million (circa US$ 113.2 million) during the first half of 2021, a 63.2% increase on the same period last year.

In Europe, PAX performed particularly well in countries such as Italy, the United Kingdom, Greece, France, Germany and Poland. The lifting of contactless payment transaction limits during the pandemic helped drive demand for PAX payment terminal solutions, as is the ongoing market shift toward Android SmartPOS solutions. Demand for PAX solutions will continue to grow, also thanks to the upgrade of large estates of legacy devices with older PCI 3.0 certification, now being gradually replaced by acquiring banks and payment service providers.

Many countries across the Middle East and Africa also accelerated adoption of digital financial services, with PAX achieving strong sales in countries such as Nigeria, Egypt and Saudi Arabia. 

Latin America and the Commonwealth of Independent States (LACIS)

Revenues of HK$ 1,480.6 million (circa US$ 190.2 million) were achieved in the LACIS region during the first half of 2021, a 17% increase on the same period last year.

Brazil continued to be the key market for PAX in this region. Since the onset of the pandemic, financial regulators and financial institutions initiated a series of reforms to build up the country’s electronic transaction acceptance infrastructure, which coupled with the expanding merchant network of local acquirers provided strong growth for PAX’s terminal business in Brazil. In the first half of 2021, PAX successfully launched its first M-series product in Brazil, the M30 Android PayPhone. 

In Argentina and Russia, PAX achieved significant sales growth and continued to strengthen its commitment to other promising markets such as Mexico and Chile.

Asia Pacific (APAC)

The increasing global recognition of the PAX brand and China’s digital transformation provide huge market opportunities. PAX therefore decided to bring in China as part of its overall APAC division. APAC revenues were HK$ 570 million (circa US$ 73.2 million) during the first half of 2021, an 11.7% increase on the same period last year. (China revenues represented 24.7% of the region's revenues).

Demand for PAX Android SmartPOS terminals continued to rise in markets such as Malaysia, Vietnam and particularly in India where PAX is already considered the leading payment terminal supplier and where sales more than doubled during the interim period. 

The United States of America and Canada (USCA)

The adoption of contactless payments has been booming in North America since the outbreak of the pandemic. According to the eMarketer report, the number of instore mobile payment users in the United States is expected to surpass 100 million by the end of 2021. As the number one provider of Android SmartPOS terminals in the USCA region, PAX delivered these new-generation devices to thousands of merchants through the continent's extensive network of Independent Sales Organizations (ISOs).

Revenues of HK$ 386.9 million (circa US$ 49.7 million) were achieved in North America during the first half of 2021, a 71.7% increase on the same period last year. 

The A920 was the best-selling model in the region, with widespread adoption from an increasing number of top-tier retailers and Quick Service Restaurant (QSR) chains. 

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In conclusion, Jack LU, Chief Executive Officer of PAX, commented: “In view of the bright prospects offered by the international payment terminal market, PAX is investing heavily in a new industrial base to increase production capacity and long-term business development support. In July 2021, PAX signed contracts for the construction of new facilities, which are expected to be completed during or soon after Q4 2022. This will greatly enhance the production capacity of PAX terminal products and strengthen our competitiveness.”