more than meets the eye

Agree with the bounce back theory. Have been watching this since the SKG days.

The ann. could have been worded better, coming from an exp. Dir/Co.Sec. in Tan. Makes me believe it was deliberately done. When he mentions the software licensing revenues contributed 3.6 mill in net profit it’s not implying that EPY will lose that profit as it is earned from existing markets, merely to highlight that they will enter the Chinese market with a non licensing model. They will take a different strategy into China and highlighted their disappointment in not being able to so.
The fall in revenues from Indonesian operations wouldn’t be that "significant" when you compare revenue (not profit) earned in that market contributes 20% compared to Malaysia 80% and growing. Pakistan and Thailand growing steadily.

"The Board expects that the results for both the six months ended 30 June 2007 and for the full year ending 31 December 2007 will be significantly below expectations". Now, they are not saying earnings will be below previous corresponding period but below expectations. Basing that on the full year (06) net profit of $6.01 million and their projected expectations of 20% growth Year on Year the profit for 2007 would have been anticipated to be appx $7.2 million. So, how "substantial" can 20% of Indonesia revenues impact on the bottom line?

It was an "opportune" time for the company to announce an across the board cost reduction program which as claimed in the announcement to be substantial. So, "significant" impact on revenues from Indonesian market (repeat, 20% of group revenue, TEMPORARY effect) to be offset by "substantial" cost savings across the Group (FIXED/PERMANENT effect)

We have to remember that the Malaysian Ministry of Finance is a substantial shareholder in EPY and J/V's with Gov. Departments and Banking Institutions, so any job losses will need to be handled in a politically sensitive way.
Co founder of EPY, Dato Hassan bought just under 7 million shares at 30 cents each on June 18 2007. He is also "Director of Government and External Affairs
for e-pay Malaysia!!"

On the China issue. For EPY to concede that “The Company has decided to enter this market via a joint venture with a licensed operator" implies a deal has been done or close to being formalised and an announcement is imminent

Finances should not be an issue here with 10.6 mill in cash at end of March Q and 20 million in Credit Standby and another 13 million in Loan facilities available.
NTA at appx. 4.5 cents and dividends could very well be maintained bearing in mind Directors are also Substantial/Majority holders so they have the option to meet Capex from these standby facilities and pay dividends from earnings.

Regards
RBA