A pioneer in China has taken a beating, writes David Potts.

NO DISRESPECT to Stephanie Rice but Australia's first gold medal - won for sheer persistence - was awarded in China well before the Beijing Olympics started.

In a unique case of small poppy syndrome, since Oncard International's breakthrough into China as the biggest payment card provider, the market has chopped down its share price.

Despite, mind you, even having some heavy hitters - think Packer and Pratt for starters - on its register. Or an almost debt-free balance sheet, a pile of cash in the bank, 17 million cards on issue through China and the Asia Pacific (including a fuel card in New Zealand which offers a 36 cents a litre discount up to 30 litres, Coles and Woolies or better still the ACCC might like to note) and a small but growing profit.

Perhaps best of all, one of the partners in its two joint ventures in China has just one degree of separation from the central bank.

Oncard supplies pre-paid cards - they're tax-effective for employees, cheaper for companies than paying cash and most of all a boon for it because it gets the cash in advance plus a merchant's fee - and is moving into Eftpos as well as loyalty rewards. Although most of Oncard's revenues and profit come from China, where the middle class is growing but cash has been far and away the main means of payment, you might recognise it better as owning the technology behind Fly Buys and Qantas Frequent Flyers reward programs. Even so, we're talking minnow here: thanks to the slide in its share price, Oncard is valued at barely $22 million.

Since few brokers can be bothered to follow the stock, something partly made up for by its quarterly reporting to shareholders, the chances are its share price will continue to languish in this kind of market.

There's also probably a perception problem because Oncard is the metamorphosis of a tech wreck stock, DCS Technologies.

Still, barely 28 months after moving out of voluntary administration, it posted a half-year profit of almost $3 million.

Apart from being thinly traded, there's also the inherent riskiness of its insatiable desire to expand, which it should be said has served it brilliantly so far. It says it's looking at opportunities in India, Thailand and Vietnam.

Since it has an aversion to debt, which you'd think would be a plus in this market, rights issues and placements would seem inevitable.

ADVANTAGES

* China foothold

* No debt

* Big name investors

* Expanding

DISADVANTAGES

* Currency risk

* Speculative

* Expansion risk

* Tough competition

VERDICT

* A thinly traded stock unloved by the market but with undeniable potential.