Baifu Global is expected to accelerate sales in the second half of the year

PAX Global has previously issued a profit alert and expects its performance to increase significantly in the first half of the year, mainly due to the significant increase in sales volume in overseas markets and the improvement in the overall gross profit margin of the company. The company is principally engaged in the development and sale of electronic payment (EFT-POS) terminal solutions, including desktop and mobile terminals, consumer operating equipment, contactless card reading equipment.

The company has a good customer base in the Mainland, including UnionPay, the three major state-owned banks, as well as third-party payment service providers such as Tonglian, Remittance, Lakara, Accompany, and China Mobile. The PBOC and the Bank of China Superintendent issued a document at the beginning of the year to regulate the cooperation between commercial banks and third-party payment. During the period, the company will stop accessing new merchants nationwide, and the city will resume operations within the month, which will benefit the performance of PAX in the second half of the year.

In addition, the mainland NFC standard determines that China Mobile accepts UnionPay's 13.56GHz mobile payment technology. It is expected that the NFC mobile payment market will grow rapidly, driving the growth of NFC mobile phones and new POS machines. The growth of overseas business is also quite strong. Last year, the company's overseas revenue accounted for 29% of total revenue. The management expects that the proportion of overseas business revenue will increase to nearly 50% within three years, with the fastest growth in emerging markets. The North American, European, Brazilian, Indian and Middle Eastern markets will be the main growth drivers, and sales are expected to accelerate in the second half of the year. The gross profit margin of overseas markets is also higher than that of the Mainland. The gross profit margin is over 40%, which is conducive to the overall gross profit margin. The market expects that the company's earnings growth in the next three years will reach more than 20%, and the current P/E ratio is about 16 times, and the valuation is reasonable.