GP Industries Delivers Robust FY2025 Results, Declares Dividend, and Faces Strategic Shifts Amid Tariff Uncertainty

Highlights from the 30th Annual General Meeting

GP Industries Limited (“the Company”) held its 30th Annual General Meeting (AGM) on 29 July 2025 at Pan Pacific Singapore, where shareholders approved all key resolutions and received detailed updates on the Company’s performance, strategic direction, and imminent challenges.

Key Financial and Operational Updates

• Strong Revenue Growth in PRC, Despite Segmental Challenges:
  The Company reported an increase in revenue from its operations in the People’s Republic of China (PRC), rising from S\$485 million in FY2024 to S\$525 million in FY2025. However, Zhongyin (Ningbo) Battery Co Ltd, a key subsidiary, saw its revenue drop from S\$304 million to S\$255 million, highlighting divergent performance among entities. Management clarified this was due to segmental differences and that other PRC subsidiaries contributed to the overall growth.
• Battery Division Driven by Vietnam Production:
  Growth in the battery segment was primarily attributed to production in Vietnam, with significant exports to the US market. Notably, no US tariffs were imposed on Vietnam-sourced products during the reported period, but management remains vigilant as geopolitical risks evolve.
• Dividend Announcement:
  Shareholders approved a final tax-exempt (1-tier) dividend of 1.50 Singapore cents per ordinary share for FY2025, payable on 22 August 2025 to shareholders on record as at 8 August 2025. This signals management’s confidence in the Company’s cash generation and commitment to shareholder returns.
• Resilience and Strategic Flexibility in the Face of Tariffs:
  Management highlighted its proactive response to past tariffs on Chinese goods by relocating production to Vietnam and Malaysia to supply the US market. While no new tariffs directly impacted Vietnam-sourced goods in the last year, the Company is monitoring developments closely and indicated that further production shifts may not be immediately effective due to operational complexities.
• Exposure to New Technologies:
  The Company is adapting to emerging trends such as AI, AR, and VR. The launch of the “GP eTag Smart Tracker” exemplifies its push into smart devices. Management sees future growth opportunities as battery demand increases with the proliferation of smart home and AI-driven consumer electronics.

Corporate Governance and Board Matters

• Re-election of Key Directors:
  The AGM saw the re-election of Lam Hin Lap (Vice Chairman and Executive Vice President), Brian Li Yiu Cheung (Executive Vice President), Timothy Tong Wai Cheung (Non-Executive Independent Director), and Charlene-Jayne Chang Wei-Ying (Non-Executive Independent Director). These appointments ensure continuity and experienced oversight.
• Directors’ Fees:
  Shareholders approved directors’ fees totaling S\$513,000 for FY2025. Executive Directors do not receive these fees, which go to Independent Directors in line with their roles and responsibilities.
• Auditor Re-appointment:
  Messrs Deloitte & Touche LLP were re-appointed as auditors, with management noting no changes in audit firm in recent years and no plans for a switch, citing partner rotation and rigorous quality assessments.

Strategic Business Mandates and Resolutions

• Share Issuance Mandate:
  Approval was granted for the Company to issue new shares up to 50% of issued capital (20% for non-pro-rata issues), enhancing flexibility for future fundraising or corporate actions.
• Share Buyback Mandate:
  The renewal of the share purchase mandate enables the Company to buy back up to 10% of its issued shares, potentially supporting the share price and returning value to shareholders.
• Interested Person Transactions (IPT) Mandate:
  Shareholders renewed the IPT mandate, allowing transactions with related parties subject to SGX rules. Key related parties including Gold Peak Technology Group Limited and Mr Victor Lo abstained from voting on this resolution.

Material Developments and Potentially Price-Sensitive Issues

• XIC Innovation Impairment:
  The Company fully impaired its carrying value in XIC Innovation, resulting in a S\$46.2 million non-cash loss in Other Comprehensive Income, but emphasized that cumulative dividends from XIC exceeded the original investment. Management stated that there will be no further financial impacts going forward from this holding.
• Tariff Risks and Production Flexibility:
  Management confirmed readiness to react to new tariffs imposed by the US, but warned that relocating factories is not a panacea due to efficiency and talent considerations. Past experience in shifting production to Vietnam and Malaysia has proven effective, but future actions will be cautious and market-driven.
• Singapore Listing Status Maintained:
  Despite low trading volumes and inquiries about potential privatization or mergers with its Hong Kong-listed parent, management reaffirmed the strategic advantage of a Singapore listing, especially for Southeast Asian and US business dealings.
• Powerbank Certification:
  While the Company’s powerbanks do not yet have China Compulsory Certification (CCC), management is pursuing certification to unlock new market potential in China.

Shareholder Takeaways and Potential Share Price Drivers

1. The declaration of a final dividend and continued profitability may support investor sentiment and provide yield support.
2. The Company’s demonstrated flexibility in managing geopolitical risks and supply chain shifts is a competitive advantage amid tariff uncertainties.
3. Full impairment of XIC Innovation eliminates ongoing earnings drag, potentially clarifying the Company’s earnings profile.
4. The share purchase mandate could provide downside support to the share price if utilized.
5. Expansion into AI, AR, VR, and smart device markets positions the Company for future growth, with potential upside as new products scale.

Conclusion

GP Industries’ 2025 AGM reinforced the Company’s resilience, adaptability, and focus on shareholder value. Investors should monitor ongoing tariff developments, strategic expansion into new technology segments, and the Company’s capital management initiatives, all of which have the potential to significantly influence future share price performance.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult professional advisors before making investment decisions related to GP Industries Limited.

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