On November 22, Yabo Technology Holdings announced the latest interim results.

In the six months ended September 30, 2024, the company achieved revenue of HK$0.271 billion, which was basically the same as the same period last year, with a year-on-year decrease of about 2.3%; the company's net loss for the period was HK$1.6 million, which was a sharp decrease of about 85% compared to HK$10.5 million in the same period last year.

If you just skimp at the performance data, you might think that the performance in this interim report is mediocre, but in reality, the key information revealed behind this is that the company has formulated a clear and new strategic plan for its future development.

1. Steady+Growth = High Certainty

The lottery business has maintained consistent steady growth. During the period, the business achieved revenue of HK$0.126 billion, an increase of approximately 11% over the previous year.

Thanks to the natural “countercyclical” nature of the lottery business, in the context of macroeconomic pressure over the past few years, Yabo Technology Holdings' lottery and related businesses have acted as a ballast stone. Under the current realistic conditions of “weak recovery” in the macroeconomy, it is expected that it will continue to provide support for the Group's steady growth.

Electronic payments are worth focusing on. During this performance period, due to the expiration of the government's 2022 e-discount program subsidy and the return to normalization of the number of travelers, the revenue of this business declined year-on-year. This is consistent with the overall macroeconomic consumption environment performance and is within expectations.

Looking forward to the future, with the introduction of a series of stimulus policies, Macau's location advantages should give priority to enjoying marginal improvements in the consumer environment, bringing positive feedback. More importantly, Yabo Technology Holdings has an excellent electronic payment platform such as mPay, and the cumulative number of registered users increased by about 17% during the performance period.

As we all know, the best business model is to satisfy humanity. In the digital economy era, social networking, search, e-commerce, and electronic payments are the easiest business models to give birth to unicorns, solving the human quest for friendship, knowledge, materials, and convenience, respectively. Among them, payment is not only the closest to “money” and has the most efficient monetization method, but can also continuously expand business boundaries and create more commercial value through value-added services such as data analysis and financial services.

The prerequisite for making really good payments is to have a high enough market share, and the total number of mPay e-wallet transactions already accounts for 80% of the number of electronic payment transactions in Macau.

Rationally speaking, with this “monopoly” market position, Yabo Technology Holdings can just sit and wait to count money, but adhering to the concept of “repairing the roof on a clear day,” Yabo Technology Holdings continues to add more functions to mPay. Whether it is normal demand for takeout, travel, catering, etc., or extraordinary needs such as concert ticketing, deposit and financial management, and cross-border business, it can be achieved on mPay. Predictably, mPay wants to turn itself into a “super app” through continuous expansion of scenarios to further enhance customer stickiness and strengthen market position.

From a macro perspective, electronic payments can improve the speed of payment settlement, improve the efficiency of the use of funds, promote the digital transformation of traditional industries, and cultivate new digital economic growth points. It is an essential piece of the puzzle for the Macao government to complete the 1+4 economic moderately diversified framework. It will drive the development of electronic payments from the top down.

Well, as electronic payments in Macau become more and more popular, mPay will undoubtedly become the core beneficiary. In order to better accommodate this part of the market growth, mPay is also continuously increasing transaction limit. Starting September 20 this year, mPay will comprehensively increase transaction and transfer limits for 3A, 3B, and JR level users. Among them, 3B level users enjoy unlimited annual transaction limits and annual transfer limits.

The “robustness” of lottery tickets and the “growth” of electronic payments can actually bring high enough certainty, but this is not the most imaginative place.

II. The final piece of the puzzle for M&A banks to complete their new strategic positioning

If you only take a quick look at the data in this interim report, it is easy to overlook one key point. That is, Yabo Technology Holdings acquired Ant Bank (Macau) during the period. Since the acquisition took effect on September 2, Ant Bank (Macau)'s results for less than a month were incorporated into the group's table. It can be said that the results reported this time are equivalent to a significant loss.

Just looking at the business situation of Ant Bank (Macau) itself, it cannot be described as unimpressive. In the six months ended September 30, 2024, the retail customer base of Ant Bank (Macau) increased by about 33%, driving deposit growth of about 142%; loan balances for corporate customers increased sharply by 193%.

Against the backdrop of poor overall performance in the banking industry, Ant Bank (Macau)'s ability to achieve such rapid growth is inseparable from Internet banking's greatest advantage - innovation.

For example, in terms of account opening, Ant Bank (Macau) pioneered the use of EKYC and EKYB technology to enable retail users and business users to open an account online, which can be completed as soon as the same day; in terms of deposits, Ant Bank (Macau) launched a high-yield deposit account deposit that combines daily dividend payments and pay-as-you-go; in terms of transfers, it is the first to provide T+0 Australian remittance services for retail users. Not only is it fast and the cost is low, enterprise users can also enjoy T+0 remittance services in 30 countries and regions around the world. In addition, there are various services such as convenient and fast online credit loans, securities investment, and supply chain financing, which continue to attract retail and corporate users.

After completing the bank merger and acquisition, the vision of Abo Technology Holdings changed to “become a leading global bank and integrated digital fintech group”. From this, it is not difficult to see that globalization is the future mature form of the company.

Before truly globalizing, it is also necessary to have a mature local business template. For Yabo Technology Holdings, it is a “banking+payment+local life” three-wheel drive, forming a comprehensive digital ecosystem.

Simply put, Yabo Technology Holdings is a “big steward”. It is not only responsible for your various financial needs such as savings, withdrawals, transfers, and loans, but also helps you pay all kinds of expenses, while also being able to easily enjoy all kinds of local services. Both individual users and merchants can save time, effort, and worry.

In fact, only after the M&A banking business is completed can the digital ecosystem of Yabo Technology Holdings be considered the final piece of the puzzle.

This is not only because of the license advantages brought by banks, which give them more room for imagination to expand their business, but also because in the digital economy, data and technology are the most valuable assets of enterprises, and M&A banking businesses can obtain large amounts of customer data and financial transaction data, which is conducive to optimizing payment algorithms, improving risk management capabilities, and developing new products and services. At the same time, it can better access the ecological resources of ants and ants, connect more consumption scenarios, and expand the scope of services.

It is worth mentioning that with the release of inter-business synergy effects, Yabo Technology Holdings is leaving Macau and embracing the mainland.

On December 4, Macau Express Co., Ltd. (“Macau Pass”) announced the official sale of the “Macau Pass - National Pass”. With this card, users can use public transportation covered by “transport links” in more than 300 cities in the mainland, and can also be used in nearly 0.03 million terminal spending scenarios across Macau, enabling them to enjoy the mainland and Macau with one card.

As a result, Yabo Technology Holdings has further expanded its business scope in the field of payment services, from within Macau to the whole country. As demand from Macau residents to work and travel to the mainland increases, and the number of mainland visitors continues to rise, this move is expected to bring a new growth engine to Asia Expo Technology Holdings.

Furthermore, while vigorously expanding the domestic market, Yabo Technology Holdings is also accelerating the implementation of a global strategy.

On November 26, Macau Express Group Holdings Co., Ltd., a subsidiary of Abo Technology Holdings, and Hungary's Cardnet Group jointly signed a letter of intent to cooperate on the bilateral retail digital gateway ecosystem (hereinafter referred to as “BRIDGE”) to promote cross-border, cross-system payments and seamless transactions for users in China and Europe.

Cardnet Group is a leading digital payment integrator and service provider in Hungary, mainly providing services for networks of banks, retailers and merchants in Central Europe, Eastern Europe and the Gulf region. If the cross-border payment system established in cooperation with it has a good demonstration effect, it will help Yabo Technology Holdings to fully enter Europe and other markets around the world in the future.

III. Concluding Remarks

At this point, we can also take a more complete look at what Yabo Technology Holdings wants to do. Traditional businesses such as lotteries only need to be stable. With excellent countercyclical properties, this is not difficult to achieve. “Banking+Payment+Local Life” forms the Group's future core growth engine, opening up a closed loop of digital finance and lifestyle services by linking rich scenarios such as food, shopping, lodging, travel, entertainment, payment, financial management, and cross-border.

Asia Expo Technology Holdings has implemented a new business model in Macau. There is no need to worry about hard power requirements such as qualifications and technology. The key is whether it can integrate into the local political, economic, and cultural background in advancing the global strategy in the next few years. This will take time to test, and it will also require more patience from the market.