Pax Global aims at better margin

Business | 7 Apr 2021 4:59 pm

Chinese payment terminal solution supplier, Pax Global Technology (0327), expects gross profit margin to range between 39 percent and 41 percent this year and revenue to grow by over 10 percent this year.

Gross profit margin for 2020 was 41.4 percent, up by 190 basis points from a year before.

Revenue from Europe, the Middle East and Africa, grew by 36.8 percent last year.

Chief financial officer, Ethan Cheung Shi-yeung, said one competitor went private, which aroused misgivings among many clients in Europe and prompted them to look for substitutes.

He said replacement demand is also an important driver of POS terminals sales growth, as POS terminals need to be replaced every three to five years, due to changes in the requirements of Visa and MasterCard and security needs of governments.

As of December 31, Pax had cash and cash equivalents and short-term bank deposits in an aggregate amount of HK$3.80 billion.

Cheung said the major uses of cash include purchasing materials, dividend payout or stock repurchases.

When asked about mergers and acquisitions plans, Cheung said some software partners in Europe and America are a priority.

Research and development costs grew by 15.6 percent to HK$460.77 million last year.

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