GHL System Berhad Annual Report 2020

G H L S Y S T E M S B E R H A D 1 9 9 4 0 1 0 0 7 3 6 1 ( 2 9 3 0 4 0 - D ) 14 MANAGEMENT DISCUSSION AND ANALYSIS CONT’D 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 RM347.7m Total RM334.5m Revenue By Business Segment 2019 (RM’mil) 11.9 131.8 Solution Services 14.9 121.1 2020 (RM’mil) 204.0 198.5 TPA Shared Services a) Transaction Payment Acquisition (“TPA”) Segment The TPA business has two (2) distinct sub-segments, each in a different stage of development. They are: i) e-pay’s direct contractual relationships with merchants to provide Telco prepaid reloads and other top-up facilities as well as, bill collection services for consumers (“reload and collection services”) and ii) GHL’s direct contractual relationships with merchants to provide international and domestic card payment and e-wallet services (“electronic payment services”). With both sub-segments combined, the TPA business declined -2.7% to RM198.5 million in 2020 (2019 – RM204.0 million), contributing 59.3% of total revenue in 2020 (2019 – 58.7%). Within this, the e-pay business contributed 62.4% (2019 – 63.8%) of the total Group TPA revenue. The electronic payments business is smaller in absolute terms but is growing at a much faster rate. The electronic payments TPA gross revenue declined by -3.3% yoy to RM74.7 million (2019 – RM77.3 million) whereas the e-pay business declined at a lower rate of -2.3% to RM123.8 million in 2020 from RM126.7 million in 2019. The reason for the e-pay lower decline was due to many of the e-pay outlets such as petrol stations, pharmacies and convenience stores were deemed to be necessity services and thus allowed to remain open during the lockdown period. Despite a challenging 2020, there remains considerable untapped opportunity within ASEAN, hence the TPA business remains the main driver of growth for the Group in the near term. Each of the two (2) components within the TPA business is described in more detail, as follow: - (i) e-pay (reload and collection services) e-pay is the largest provider of reload and collection services in Malaysia. It has approximately 42,300 acceptance points nationwide, encompassing petrol chains, large convenience store chains and general retail stores. The e-pay brand is well known to consumers who use the service. With over 20 years of experience, e-pay is clearly the market leader in Malaysia within this industry segment.