MANAGEMENT DISCUSSION AND ANALYSIS 1.0 OVERVIEW OF THE GROUP’S BUSINESS AND OPERATIONS GHL Systems Berhad and its subsidiaries (“the Group” or “GHL”) is a leading ASEAN payment services provider with operations in Malaysia, Philippines, Thailand, Indonesia, Singapore and Australia. The Group provides endto-end payment services encompassing in-store, online, and QR payments acceptance, and is one of the region’s top merchant acquirers. GHL manages and oversees more than 480,000 payment touchpoints across its ASEAN footprint. These touchpoints facilitate a wide range of services including credit/debit cards, e-wallets, contactless payment, loyalty, prepaid credit top-up, and bill collection payment services. The Group has also recently introduced SME lending as another value-added service to its merchant base. The Group has three (3) core business pillars: (a) Transaction Payment Acquisition (“TPA”) mainly comprises revenue derived from two distinct sub segments: (i) GHL’s merchant acquiring and electronic payment services (“Electronic Payment Services”); and (ii) e-pay services which include Telco prepaid and other credit top-up facilities and bill collection services for consumers (“Reload and Collection Services”). (b) Shared Services comprises revenue derived from the sale, rental, and maintenance of Electronic Data Capture (“EDC”) terminals and other payment acceptance devices. (c) Solution Services comprises revenue derived from proprietary payment solutions, which include customised online platforms, loan collections, loyalty systems and other bank or merchant specific applications. 2.0 DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND CONDITIONS 2.1 Revenue In 2023, the Group recorded revenue of RM460.4 million, a 12.2% YoY increase, compared to RM410.4 million in 2022. The primary driver of this growth was the TPA segment, which exhibited strong performance across the key markets of Malaysia, the Philippines, and Thailand. In the Shared Services segment, there was a marginal 2.2% YoY increase, whereas the Solution Services segment saw 26.4% YoY growth. 2.2 Net Profit In 2023, the Group’s gross profit margin decreased to 33.1% from the previous year’s 34.8%, mainly due to shifts in business pillars, payment types, and merchant mix. Despite top-line revenue growth, net profit remained flat at RM28.8 million, up slightly from the 2022’s figure of RM28.3 million. This was due to increased Operating Expense (“OPEX”) related to the Direct Acquiring business, IT security, and cloud infrastructure. Furthermore, a provision of RM4.8 million for the Expected Credit Loss (“ECL”) linked to the newly launched lending business impacted the net profit. 2.3 Taxation The effective tax rate for 2023 was at 28.2% (2022: 30.2%), which is higher than the statutory tax rate mainly due to non-tax allowable expenses. 2.4 Profit Attributable to Equity Holders The profit attributable to equity holders recorded a marginal improvement to RM28.8 million, which was slightly higher than 2022’s RM28.3 million. Fully diluted earnings per ordinary share for the year amounted to 2.52 sen (2022: 2.48 sen). The year’s earnings performance reflects benefits from the Group’s continued investment into growing its merchant footprint as well as its investments into the Group’s IT infrastructure. 09 ANNUAL REPORT 2023
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