PAX Technology Announces 2024 Interim Results

PAX Global Technology Limited (“PAX” or the “Group”, stock code: 00327.HK), one of the world’s leading providers of electronic payment terminal solutions and related services, published unaudited interim results for the six months ended 30 June 2024 (the “period”).

In the first half of 2024, the global economic recovery has been tepid due to a robust US dollar and high-interest rates, impacting market demand. PAX Technology, with its extensive global presence, has effectively managed business and financial risks by primarily ensuring customer payments are settled in US dollars. In light of these economic conditions, which could delay client payments, PAX has adopted a stringent credit management strategy for product shipments to further mitigate risk.

Financial Results

During this period, PAX generated revenues of HK$ 3,013.2 million (c. USD 387 million) with Android SmartPOS devices growing to represent over 50% of sales. A profit of HK$ 459.8 million (c. USD 59 million) was posted, with a gross profit margin of 46.8% and net profit margin of 15.3%. The board of directors declared an interim dividend of HK$ 0.24 per ordinary share for the period.

New Manufacturing Facilities

Earlier this year, PAX opened a new Smart Terminals Industrial Park in Huizhou, China. Representing an investment of HK$ 760 million (c. USD 98 million), which will enhance PAX Technology's supply chain efficiency and strengthen delivery capabilities, the new state-of-the-art facility spans 261,000 square metres, featuring modern production lines, research and development laboratories, engineering labs, testing centres, and well-equipped staff accommodation.

Regional Global Performance

Europe, the Middle East and Africa (EMEA)

The largest revenue contribution during the first half of 2024 came from the EMEA region.

European sales were robust, especially in the United Kingdom, Italy, and Southeastern Europe, where the flagship model A920 PRO remains extremely popular throughout the region.

With the European Union’s Alternative Fuels Infrastructure Regulation (AFIR) coming into effect in April 2024, the payment landscape for EV charging stations is also evolving rapidly. PAX unattended payment terminal models IM15, IM20, IM25 and IM30 all enable seamless integration with existing EV chargers, supporting diverse payment options and operating systems.

Middle East & South African sales resumed an upward trend, while exchange rate volatility in North & West Africa continued to pose cashflow challenges for our customers.

Latin America and the Commonwealth of Independent States (LACIS)

PAX experienced lower demand in Brazil, not only because of the country's slowdown due to fluctuating interest rates and a conservative economic landscape, but also because of the high number of payment terminals previously installed.

Conversely, Mexico and Argentina have proven to be strong growth drivers in South America, with PAX has expanding its sales channels, and achieving certifications with more Payment Service Providers (PSPs). The adoption of PAX IM30 devices by local vending machine operators, airlines, and public transit systems has strengthened the PAX brand in the self-service and transportation sectors.

Asia Pacific Region (APAC)

PAX strengthened its market share across the APAC region, and experienced considerable growth across various markets, driven by our innovative products and increasing brand recognition.

In India, PAX continues to lead the market as the preferred supplier for major banks and PSPs, with the first half of 2024 experiencing a recovery in sales, contributing significantly to the region's overall growth.

Japan is fast becoming another key country for PAX in the region, broadening our deployment of smart payment terminals across various market segments. The A920 SmartPOS is increasingly popular with Japanese acquiring institutions, recognised for its unique form factor, high performance and excellent user experience. The upcoming launch of the next-generation A920 MAX is anticipated to generate considerable market excitement.

The United States of America and Canada (USCA)

The retail sector in North America faced challenges in the first half of 2024 due to high interest rates, leading several major retail chains to close physical stores. This trend caused many Independent Sales Organizations (ISOs) and financial institutions to slow their deployment of payment terminals, adversely affecting PAX sales in the region.

In response, PAX introduced the Elys Series of Android EPOS solutions - by our Retail Division called ZOLON - to meet growing demand for value-added services in retail & hospitality. The Elys Station was the first model to be launched in the USA and has been receiving positive customer feedback.

PAX will be investing more resources to strengthen EPOS sales channels, collaborating closely with Independent Software Vendors (ISVs) to provide more customized solutions for this emerging market segment.

Mr. Jack LU, Chief Executive Officer of PAX, commented, “As consumer and merchant demand for electronic payment solutions is evolving far beyond mere transactional services, Android smart payment terminals are emerging as more effective payment solutions that better fulfil market needs. By capitalizing on our expertise in Android smart payment terminal technology, PAX is dedicated to offering a wider product portfolio for all merchant segments, as well as ongoing innovation in SaaS solutions.”

About PAX Global Technology Limited

PAX Global Technology Limited (Stock Code: 00327.HK) is a leading provider of electronic payment terminal solutions worldwide. As one of the fastest-growing suppliers in the payment industry, PAX has advanced manufacturing facilities, robust R&D capabilities, and a global network of reputable channel partners. The company has deployed over 80 million payment terminals in more than 120 countries