YPB Gets Boost After Partnering with PanPass

On Monday (September 16), product authentication company YPB Group (ASX:YPB) announced it had signed its first commercial client agreement with PanPass, a major security label supplier in China. 

PanPass prints upwards of 15 billion security documents per year. This includes three billion QR codes that hold scannable information about a given product. In line with company expectations, YPB’s authentication technology is slated to be commercialized for the second half of 2019.

Fraudulent activity surrounding the misidentification of QR codes has been known to happen on the continent. According to the South China Morning Post, QR scams have resulted in as much as US$13 million in stolen goods in the Guangdong province alone.

What’s more, QR codes often spread viruses, and fake codes are placed on top of the originals as an additional layer of fraud.

In turn, YPB’s services are being employed to prevent counterfeit QR practices. As part of its initial six month agreement, YPB will be providing its Motif Micro 1 smartphone technology to work in line with PanPass’s security labels. Following the introductory agreement, YPB has the potential to enter a minimum two year agreement with PanPass at the company’s request.

The Motif Micro 1 includes embedded tracing properties that are not visible to the eye. YBP has recently made breakthroughs, and the technology is now operable on smartphones with greater agility. By comparison, its former models were unable to scan QR codes at a distance, on uneven surfaces or in abnormal lighting.

“It greatly expands our addressable market by shifting from our historical B2B (business to business) sales to a B2C (business to consumer) marketing sales,” YPB executive chairman John Houston said in a press release.

Along with Motif Micro 1, YPB offers businesses anti-counterfeit services such as Covert Tracer, Vintail, ProtectCode and forensics consulting.

As YPB ramps up its technology breakthroughs, earlier in September it signed a three year product identification agreement with existing client PT Combiphar. The pharmaceutical company, based in Indonesia, will be integrating YPB’s services across its new product suite. The three year deal is valued at approximately AU$1 million in revenue.

While the shift from using barcodes to QR codes has risen particularly in pharmaceutical and healthcare industries, a report from Future Market Insights expects that the QR code market will have an 8.7 compound annual growth rate until 2027. The report adds that QR features such as durability and the ability to withstand extreme weather conditions will be key to successful integration and distribution.

YPB’s shares opened on Monday at AU$0.006 and closed at AU$0.008, climbing over 33 percent to cap off the trading day.

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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.