GP Industries

[weijian]

If GP Energy Tech needed more capital in future, then will you be prepared in pump in more money into an unlisted company, to prevent dilution? I think this is a relevant question to ask. Otherwise, since you said that there is a lot of possibility to "unlock" value in GPI, would it be better to take the cash alternative instead and re-invest the proceeds back to GPI? At least GPI is a listed company.

hi ghchua,

Do you actually mean to reinvest back in GPIH? (ie. the HK listed parent). That actually sounds like a lower risk (in terms of holding unlisted GP Tech shares) while buying a ticket for the ride. Similar to selling Boardroom and using proceeds to buy GK Goh when the latter offered for the former. Also similar to tendering ARA shares and then using the proceeds to buy into Straits Trading.

From what I observe since I started investing, I realize the behavior of the controlling shareholder when it was listed, is highly predictive of the treatment that OPMI will receive when the OPMI decides to go unlisted with them.

[ghchua]

hi ghchua,

Do you actually mean to reinvest back in GPIH? (ie. the HK listed parent). That actually sounds like a lower risk (in terms of holding unlisted GP Tech shares) while buying a ticket for the ride. Similar to selling Boardroom and using proceeds to buy GK Goh when the latter offered for the former. Also similar to tendering ARA shares and then using the proceeds to buy into Straits Trading.

From what I observe since I started investing, I realize the behavior of the controlling shareholder when it was listed, is highly predictive of the treatment that OPMI will receive when the OPMI decides to go unlisted with them.

Oh yes. Re-investing back into GPIH is a good option as well. I was referring to Mushy previous post on the group itself on the topic of unlocking value. Since he had invested in GPI already, I thought adding more into GPI is not a bad option as well.

[weijian]

Rather than expanding based demand/growth, it is expansion based on diversification. So when excess supply meets softening demand, it will not be pretty.

MINUTES OF ANNUAL GENERAL MEETING

Approximately 4 years ago, US imposed a tough trade measure on China. An additional 25% tariff were imposed on goods that were made in China and a lot of manufacturing companies, including the Company, have to set up more factories in Southeast Asia to avoid the additional tax and due to the pandemic, the process was delayed. Total sales have decreased but two factories (old factory in China and new factory in Southeast Asia) have to do the job of one factory and during the Covid period it was very difficult to optimise.

Further, many big customers have informed the Company that if it does not have an alternate supply outside China, the Company would cease to be their major supplier. Most big manufacturers in China have to start a factory outside China but the total business does not grow, and this resulted in a lot of spare capacities and created tremendous price competitions. Further, a lot of companies in the market are de-stocking their inventories then and that was the kind of trading environment that the Company has gone through.

https://links.sgx.com/FileOpen/GPI%20-%2...eID=770262

[weijian]

Trump's trade war has created a lot of investments and opportunities in ASEAN. But might not be profitable for all stakeholders - better to sell ammunition in a war.

MINUTES OF ANNUAL GENERAL MEETING

The Group used to have three listed vehicles at one stage in Singapore, but Management felt that it was not effective to operate three listed companies and started to consolidate them into one.

Five to six years ago, the Company felt that it was not effective to run several small capitalization companies with duplicate business activities and Management also considered the possibility to merger the two listed companies in Hong Kong and Singapore. As a result, Gold Peak Technology Group Limited increased its shareholding percentage in the Company up to
85% and affected the liquidity of the Company’s share.

Five years ago, the Management felt that it would be good to remain one Singapore listed company when Donald Trump announced a 25% additional tariff imposed on Chinese goods.

The Management acknowledged that the Group would be better off by investing more in Southeast Asia and would also look for more ways to enhance the Company’s liquidity. One of the ways is by placing shares out to more institutional investors. However, Mr Victor Lo opined that there is no clear direction for the Company at this moment.

https://links.sgx.com/FileOpen/GPI%20-%2...eID=816656