PAX Global (0327.HK) (OTC:PXGYF) continues to disappoint. None of the major point-of-sale (POS) terminal providers have done particularly well since the time of my last update on this Chinese POS vendor, but PAX's 25% drop (the ADRs) is still notably worse than the 12% decline at VeriFone (NYSE:PAY), the 6% drop in the ADRs of Ingenico (OTCPK:INGIY), and the 1% rise in the local shares of Fujian Newland (000997.CH).
In
the case of PAX, the company is getting squeezed by significant
weakness in Brazil and a challenging (and perhaps changing) market in
China while emerging growth opportunities in Europe and the U.S. are
still much too small to offset those pressures. While I still believe
that PAX Global can become a viable #3 in large markets like the U.S.,
the problems in China could be more structural and there's more risk now
in what was already a high-risk story. My fair value has declined by
only 10% since February, but I will be paying close attention to the
upcoming first-half earnings report before deciding whether there is
enough of a discount here to merit the risk.
Read the full article here:
PAX Global Caught In An Uncomfortable Squeeze
