Interview: GOLDPAC GROUP Striking Gold With Card Campaign

BANK CARD PLAY Goldpac Group Ltd (03315) is leading the pack thanks to burgeoning big bank business, a sector expert told Asia Fund Space.

Management recently said it was reinforcing its core bank card business, expanding into overseas markets and accelerating innovation for the diversification of payment solutions.

"In 2015, being the global leader in payment solutions, we developed along core strategic initiatives and both turnover and net profit recorded double-digit growth, and our core business of payment solutions was ranked as one of the global leaders and the first in China in terms of financial payment card shipments.

"Leveraging on the internationalization of the RMB and adhering to China's 'One Belt One Road' initiative, we continuously expanded our overseas market presence and successfully entered into a number of emerging markets in South Asia, Mideast and Africa, and in order to satisfy market demands in an era of payment solutions diversification and assist clients in enhancing their core competitiveness, we delivered a continuous stream of innovative operation systems and products, which significantly bolstered our financial performance."

Asia Fund Space: Goldpac's FY 2015 turnover rose 10.8% to 1.685 billion yuan and net profit was up a healthy 13.3% at 242 million.

These are presumably robust numbers amid a so-called sluggish economic recovery.

Did these annual results come as a surprise to you?

Ms. Angela Qin, Analyst, China Investment Securities :  Goldpac's annual financial performance was within our expectations.

They had tipped the market that they would have a strong financial year and we were on board.

This is part of the reason why I recently reiterated my "Strong Buy" recommendation on the firm as it's a significant player in its sector.

Asia Fund Space:  Is Goldpac an example of a PRC-based software-related firm that hopes to compete with traditional software powerhouses -- the US and India? And how is it doing so?

Ms. Angela Qin:  It does have software components and elements to its business, but Goldpac is more a purely dedicated bank card play.

I am quite bullish on this firm vis-a-vis its competitors, including China Smartpay, because Goldpac has managed to accumulate an impressive client list, including most of China's major commercial banks.

Management said that Goldpac's FY2015 top and bottom line growth rates were "distinctly above the industry average."

"China is one of the largest financial IC card markets in the world, and although hindered by the slowing economic growth in 2015, China achieved a stronger GDP (Gross Domestic Product) growth than most countries in the world and China's banking card market still saw significant development.

"In 2015, Goldpac's market share of China UnionPay payment card's worldwide shipments remained to be the largest at approximately 15.5% while Goldpac's financial IC card shipments recorded an increase of 36.4% as compared with the preceding year," Goldpac added.

Goldpac Group Limited manufactures, supplies and distributes financial cards, card personalization services, on-side card insurance system solutions, magnetic strip cards and authentication smart cards. The Company offers its products and services throughout China.

(Note: This story is contributed by Andrew Vanburen. Mr. Vanburen has served as a
government official focused on international trade at the American Institute of Taiwan in
Taipei, and worked in financial journalism for nearly a decade in both Beijing and
Shenzhen. He holds a Master's Degree from New York University. He is currently Director at
Hong Kong-based Asia Fund Space. For more information, please visit:
www.asiafundspace.com)