AMONG all the late-reporting dross spluttering into the ASX, the...

AMONG all the late-reporting dross spluttering into the ASX, the pre-paid and loyalty cards operator unveiled a maiden $1.4 million profit on revenue of $6.7 million, compared with the previous $1.1 million loss.

OnCard has already achieved its 2010 target of having 10 million cards on issue, 8 million of which have been issued across 33 cities in mainland China.

As all of this was filed on Sunday, the good news fell on the deaf ears of pampered dads enjoying their annual exemption from mowing the lawn.

According to chairman Peter Abotomey, the tardiness was more about gathering the data across the seven countries in which it operates.

"We had a much better result than we anticipated," he says.

Given the recent market, we wouldn't expect a payments minnow targeting the quixotic mainland China market to be flavour of the month. Sure enough, OnCard's share price has halved since late February.

Sceptics should note the OnCard register, where they'll find James Packer, D ick Pratt, Peter Scanlon and polo enthusiast David Calvert Jones (also Rupert Murdoch's nephew).

There's nothing ground-breaking about OnCard's business, in that the stored-value technology is old hat and there are plenty of global rivals. "We are not a technology company, we are a marketing company which uses technology to sell our product," Abotomey says.

Within 18 months OnCard has become China's biggest non-bank cards issuer, competing against two earlier French entrants.

Unlike the bears' porridge, OnCard got the timing just right.

"If we had gone earlier it would have been too early and if we had gone later we would have missed the boat," Abotomey says.

While OnCard operates locally and in New Zealand, almost all of the growth has been spurred by its two China companies: a Shanghai-based joint venture offering a pre-paid card to corporations for the tax benefit of employees; and a wholly owned subsidiary, OnCard China Co.

OnCard also owns 27 per cent of Coverdrive, which runs loyalty schemes for hotel chains such as Le Meridien; and a 75 per cent stake in the British-based OneRewards.

Under the current model, OnCard derives revenue from investing the funds held on behalf of the card holder, as well as commissions and merchant service fees.

Another handy revenue source is when forgetful or apathetic holders forfeit their benefit by not redeeming the entitlement on time.

OnCard has $10 million and no debt, but a capital raising is inevitable if it reaches its potential. OnCard wants to grow its card numbers by a compound 20 per cent a year and is talking about spending $50-100 million in China alone.

We rate OnCard a speculative buy, if only because the prospect of upsetting the big boys on the register means management wouldn't dare to fail.