GHL System Berhad Annual Report 2019

A N N U A L R E P O R T 2 0 1 9 13 2. DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS (Cont’d) 2.6 Liquidity and Capital Resources (Cont’d) (iv) The Group increased its share capital by RM15.9 million (2018 – RM106.2 million) due to the issuance of 1.2 million (2018 – 125,000) shares upon the exercise of Employee Share Scheme (“ESS”) and special issue of 10.1 million (2018 – 13.4 million) shares pertaining to the Share Subscription Agreement (“SSA”) with Paysys Group Holdings Sdn. Bhd. and Rica Holdings (M) Sdn. Bhd. 2.7 Trends and Events The ASEAN region’s central banks and regulators have advocated the move towards greater adoption of e-payments as a means of payment for goods and services. The progress made in different countries have been encouraging, given the increasing number of e-payment acceptance points in the key markets that GHL operates in, namely Malaysia, Thailand, Philippines, Indonesia, and Cambodia. This push to greater use of non-cash methods to transact sync perfectly with GHL’s TPA business strategy in enabling greater proliferation of non-cash acceptance, especially amongst the small merchant and mobile merchant segments. As we acquire more merchant footprints in line with the regulatory environment’s push for a greater cashless society, the need for more coverage becomes obvious. The growing number of debit card/ATM card holders in ASEAN will benefit from the growing number of merchant acceptance points where the former will be able to use their cards. As for the remaining unbanked segment, the emergence of local e-wallets will serve as a temporary bridge to enable the unbanked to participate in the cashless trend, for both online as well as offline purchases. The need to grow acceptance points and payment infrastructure is critical in enabling financial cohesiveness for the fast growing ASEAN consumer market. ASEAN central bank initiatives and e-payment promotions are in sync with GHL’s objective and is expected to provide a cohesive environment for a sustainable growth, moving forward. For example, in Malaysia, the government announced e-tunai, a RM450m initiative to encourage higher usage of e-wallets whereby the government credited eligible citizens with RM30 into their e-wallet accounts. 3. PERFORMANCE BY BUSINESS SEGMENT AND GEOGRAPHY 3.1 Performance By Business segment As indicated earlier, the core business segments of the Group comprise the following: - 1) Transaction Payment Acquisition (“TPA”); 2) Shared Services; and 3) Solution Services. An analysis of the performance of all three business segments are as per below: - Total RM299.1m Total RM347.7m Revenue By Business Segment 2018 (RM’mil) 14.6 182.4 TPA Solution Services 11.9 204.0 2019 (RM’mil) 250.0 300.0 350.0 200.0 150.0 100.0 50.0 0% 102.1 Shared Services 131.8 MANAGEMENT DISCUSSION AND ANALYSIS CONT’D