February 27, 2015
HONG KONG, 27 February 2015 – Advanced Card Systems Holdings Ltd. (SEHK; 8210) (“ACSH”) and its subsidiaries (“ACS” or the “Group”), one of the major suppliers of PC-linked smart card readers, today announced its audited annual results for the year ended 31 December 2014.
The year 2014 was a rewarding year for ACS as the Group has achieved an excellent performance in all aspects of its businesses. During the year under review, the Group reported a record high sales revenue of HK$246 million, surging 27% over the same period last year. Gross profit and net profit also rose 8% and 2% to HK$122 million and HK$24 million respectively. Driven by the fast-growing AFC solutions business in the region, the Group’s business in the Asia Pacific region performed exceptionally well with a remarkable revenue growth of 73%. Basic earnings per share were HK8.352 cents. To reward shareholders for their support, the Board recommended payment of a final dividend of HK2.0 cents per share (2013: HK2.0 cents).
Mr. Wong Yiu Chu, founder and CEO of ACS said, “ACS has sustained its growth momentum during the last year, further cementing its position in the smart card and smart card reader sectors to generate steady revenue streams which will be in part reinvested to develop other products and end-to-end smart card related solutions over the long term. By providing new products such as mobile card readers and end-to-end solutions such as automated fare collection systems, retail and loyalty systems, as well as other electronic purse and payment systems, the Group is gaining entry to emerging as well as larger markets.”
Sales revenue generated from smart cards more than doubled compared to 2013. During the year, the Group has secured several impressive projects. For example, ACS was chosen as the smart card supplier for a social security smart card project in Ghana, a western African country. The Group supplied 1.7 million smart cards capable of securely storing and processing sensitive information for managing pensions and similar forms of national social insurance. Furthermore, ACS is capable of supporting public key infrastructure applications, which would facilitate long-term plans of the government to use smart cards for a wider variety of government services.
In addition to the traditional PC- based products, the Group has launched new products for mobile platforms in 2014. To cater to the increasing demand for mobile banking, mobile payment, e-healthcare, and loyalty applications, the Group has successfully developed two new readers for SIM-sized smart cards and two new mobile card readers with audio-jack interfaces during the year under review. As the Monetary Board of the Philippines has mandated all ATM cards to implement an end-to-end triple DES encryption and EMV chips, the Group has set up a joint venture company, with two independent third parties to establish an EMV-certified smart card personalization center in the Philippines in order to capture the business from all local banks.
On top of its hardware business, ACS has also successfully entered the end-to-end solutions business in recent years. Since the successful launch in 2013 of our e-PLUS Tap to Pay loyalty program for SM, one of the biggest shopping mall operators in the Philippines, more than 1,300,000 contactless smart cards have been issued. Building on this success, the Group has extended its service to SM Cinema by installing 128 ticketing kiosks and 253 turnstiles in 48 SM-operated shopping malls across the Philippines in 2014. In addition, the Group has also helped SM retrofit its turnstiles system in the MOA Arena in Manila, an indoor event venue in the SM MOA Complex for music concerts and sporting events with a seating capacity of up to 20,000. ACS is leveraging this initial success with SM to expand this business model to partners elsewhere in Southeast Asia such as Thailand, Indonesia, and Malaysia.
Additionally, in the year under review the Group has acquired certain business assets of Daming Wuzhou, one of the largest AFC system suppliers in the PRC. With AFC systems deployed in more than 40 cities across the PRC, the Group can further leverage Daming Wuzhou’s existing customer network as well as its other experience to further penetrate the AFC and payment solutions market there. Furthermore, by integrating ACS’ existing technical knowledge and operational experience with that of Daming Wuzhou, the Group could then provide advanced technologies incorporating sophisticated operational techniques in the PRC.
Mr. Wong concluded, “Moving forward, ACS will continue to develop a wide range of smart card operation systems and readers to capture the opportunities arising from the rapid take-up of digitalization and e-commerce, especially in the payment and AFC segments. ACS is accumulating technical expertise through constantly reinvesting in research and development and acquisitions, and forging partnerships with companies globally. We are confident that ACS would be able to enter and compete in previously unserved markets that are larger and have higher gross profit margins. With its increasingly sophisticated technology offerings backed by strong technical expertise and reputation, the Group is in a good position to expand its business in the short- as well as the long-term.”
About Advanced Card Systems Holdings Ltd.
Founded in 1995, ACS is one of the major suppliers of PC-linked smart card readers. ACSH’s wholly-owned subsidiary, Advanced Card Systems Limited, was a winner of the Asia Pacific Product Quality Leadership Award for Smart Card Readers from Frost & Sullivan in 2009. In 2010 and 2014, ACSH was included within Forbes Asia's “Best Under a Billion", an inter-industry selection comprising the 200 top-performing publicly listed companies in Asia Pacific, with sales between US$5 million and US$1 billion. ACS develops a wide range of high quality smart card reading/writing devices, smart cards and related products and distributes these products in more than 100 countries worldwide. Visit ACS at http://www.acs.com.hk/.