PAX Global Technology (0327) H1 2024 earnings summary

Executive summary

• Revenue for 1H 2024 declined 15.6% year-over-year to HK$3,013.2 million, mainly due to reduced purchase orders amid global economic uncertainty.

• Profit for the period fell 30.3% to HK$459.8 million, with net profit margin at 15.3%.

• Gross profit margin improved to 46.8% from 44.0% year-over-year, driven by RMB depreciation and cost controls.

• Interim dividend per share increased 14.3% to HK$0.24, with a payout ratio of 56.5%.

• Robust cash inflow from operations, with net cash generated from operating activities at HK$430.7 million, up significantly year-over-year.

Financial highlights

• Revenue: HK$3,013.2 million (down 15.6% YoY); E-payment Terminals sales down 17.3%, services up 32.1%.

• Gross profit: HK$1,409.2 million (down 10.3% YoY); gross margin 46.8%.

• Operating profit: HK$537.5 million (down 22.0% YoY).

• Basic EPS: HK$0.425 (down 29.5% YoY); Diluted EPS: HK$0.416.

• Cash and cash equivalents stood at HK$2,794.1 million as of 30 June 2024.

Outlook and guidance

• FY24 revenue expected to decline by 5% to 15% year-over-year.

• Gross profit margin guidance set at 45% to 47%; operating profit margin expected between 17% and 19%.

• Management remains optimistic about long-term growth, focusing on Android SmartPOS, SaaS ecosystem, and value-added services.

• Plans to strengthen engagement with partners and pursue M&A opportunities in the payment sector.

• Positive momentum anticipated in 2H 2024.