Battery-maker will pivot to own brands and product innovation to drive growth, amid rising costs and brutal price competition

 

[SINGAPORE] As tariff risks push up costs and pricing competition,   GP Industries   : G20 -0.96% sees long-term growth coming from developing innovative products and focusing on its own brands. 

 

This strategy is being made possible as the group spent the last five years moving its manufacturing facilities from China to South-east Asia &ndash a move that began soon after United States President Donald Trump announced his first wave of tariffs during his first term. 

 

The Hong Kong-based battery-maker manufactures consumer batteries under the GP brand and high-end audio equipment. It had diversified into the acoustics business in 1992 when it acquired leading high-end British brands, KEF and Celestion.

 

A third business is in industrial investments, where it takes a stake in companies that manufacture and trade parts and components aligned to its battery solutions and acoustic businesses.

 

GP now operates seven factories in South-east Asia, including six battery plants and one audio facility, and also runs two small audio factories in the United Kingdom.

 

&ldquo We responded to tariff changes probably sooner than most of our competition in China,&rdquo said Victor Lo, chairman and chief executive of GP Industries, in an interview with The Business Times in Singapore. &ldquo In hindsight, it was a blessing. We started early.&rdquo

 

Starting from scratch

But the transition has not been without pain. Lo, who was in Singapore to celebrate GP Industries&rsquo 30th anniversary, noted that overall efficiency remains higher in China, where the group benefits from decades of industrialisation and a robust supply chain. 

 

Within an hour&rsquo s drive of its major factories in Guangdong or Ningbo, GP Industries has access to 60 to 70 important suppliers.

 

In contrast, setting up in locations such as Vietnam &ndash where workers have never seen a battery factory &ndash requires extensive training from scratch. The shift also means managing two sets of facilities and teams, while still sourcing many components from China, which ties up finances and lengthens lead times.

 

&ldquo Labour costs in South-east Asia are cheaper than China, but in our experience, overall efficiency in China is still higher,&rdquo Lo said.

 

Still, labour costs were not the most important factor in deciding its locations in the region. Ultimately, the group considered the expertise, talent and the types of products it wants to produce in the respective countries.

 

&ldquo How long or how short the learning curve is, is a major factor, and what existing local talents there are for our respective industry is another major concern,&rdquo Lo said.

 

For instance, in Malaysia, GP Industries simply added a third factory to its existing two facilities, allowing it to leverage an established workforce.

 

In Vietnam, the group had operated a joint venture making batteries for 15 years, providing a ready staff base. Meanwhile, in Thailand, it acquired a small audio company just before the Covid-19 pandemic, giving it access to workers with experience making audio products.

 

Pivot and innovate

To offset these challenges, the group has been doubling down on cost reduction and brand-building. 

 

For its first-half ended Sep 30, 2025, the SGX-listed company reported that net profit rose 12.7 per cent to S$16.3 million, from S$14.5 million, even as revenue dipped slightly &ndash to S$556 million, a 2.5 per cent fall from S$570.5 million.

 

The improvement came largely from streamlining efforts over the past four months, said Lo.

 

But, going forward, cost reduction will not be the most effective way to grow the group&rsquo s top line, he added.

 

&ldquo You can only cost cut so much,&rdquo Lo cautioned. &ldquo In the meantime, we have to speed up our development, our investment in new products, new technology.&rdquo

 

A key part of that strategy is growing its own brands and distribution channels, which now account for roughly 40 per cent of the group&rsquo s business. This provides a crucial buffer against the brutal price competition facing contract manufacturers, who must tender for orders alongside multiple Chinese suppliers.

 

&ldquo If you make products for other people&rsquo s brands, every time there&rsquo s a big order, it&rsquo s a tender. They invite three, four, five suppliers in China to bid. It&rsquo s no fun,&rdquo Lo said. &ldquo How can you make profit with that kind of business model?&rdquo

 

Battery business sales to Americas dropped 23.5 per cent, said the company in a bourse filing on Nov 12, without specifying exact figures. At the same time, total revenue from markets in the Americas fell to S$126.6 million from S$142.1 million across all segments.

 

The group is also targeting faster-growing niches within the maturing consumer battery market. Coin cell batteries &ndash the small, flat batteries used in remote controls, Internet of Things devices, electronic price tags at supermarkets, and tyre pressure sensors &ndash have been growing at double-digit rates globally for the last three to four years.

 

&ldquo We just have to move faster into these newer and faster growing sectors. Otherwise, we&rsquo ll be dragged deeper and deeper into the price war,&rdquo Lo said.

 

Data centre race

GP Industries has a market capitalisation of around S$250 million and its shares are up around 7 per cent this year. 

 

The group&rsquo s parent company is pushing ahead with a major bet on nickel-zinc batteries for data centres and uninterruptible power supply systems. The parent, Gold Peak Technology Group, has taken majority ownership of this project, with GP Industries holding a 14 per cent stake.

 

Gold Peak plans to invest roughly US$150 million over the next five years to build this into a US$500 million revenue business, with a new facility in Johor. 

 

Lo said the group has a three-year window to establish nickel-zinc as a mainstream technology in a sector where &ldquo there are 50 other battery companies developing other systems&rdquo .

 

&ldquo Speed and volume and reliability and quality are the key,&rdquo he said.

 

Looking ahead, Lo said the manufacturing sector faces continued instability from Trump&rsquo s tariff policies. The consumer battery business, in particular, is expected to remain highly competitive for another 12 to 18 months as Chinese factories that lost US business try to capture market share in other regions by dropping prices.

 

&ldquo What Trump is achieving is exactly the opposite of stability. He&rsquo s bringing new instability every other month,&rdquo Lo said. &ldquo As one company, the only thing we can do is whenever there is change, we can make important decisions very fast and cope rapidly.&rdquo

 

The group&rsquo s strategy is to outlast competitors by responding faster and maintaining a healthy financial structure, while continuing to invest in brands and innovation for the long term.

 

&ldquo If you keep cutting back, cutting back, you start to hurt your mid-term future,&rdquo Lo said. &ldquo Management has to maintain the balance.&rdquo ​ ​ ​ ​ ​ ​ ​ ​ ​

GP Industries has reported earnings of $14.5 million for the 1HFY2025 ended Sept 30, up 62.9% y-o-y from the same period last year. 

 

Earnings per share stood at 2.99 cents for the period, as compared to 1.84 cents for 1HFY2024. 

 

For 1HFY2025, the group&rsquo s revenue saw a 1.1% y-o-y increase to $70.5 million, due to an increase in revenue of the group&rsquo s battery business and audio business. 

 

Gross profit was up 9.8% y-o-y at $169.4 million, while gross profit margin rose to 29.7% for 1HFY2025 from 27.4% in 1HFY2024. This came on the back of the group&rsquo s enhanced factory efficiency and implemented strict cost control measures, says GP Industries. 

 

Looking ahead, the group expects demand for the GP Industries' battery products to remain stable due to demand from major overseas customers, which have stabilised due to inventory optimisation processes. 

Revenue for the half-year period slipped 1.9% to S$543.9 million

 

GP INDUSTRIES : G20 0% sunk into the red with a net loss of S$67.6 million for its second half ended Mar 30, compared with a net profit of S$2.2 million in the previous corresponding period.

 

Revenue slipped 1.9 per cent to S$543.9 million, from S$554.5 million a year earlier.

 

In FY24, the company reported a fall in revenue for its batteries business compared to FY23, with sales declines largely in Europe and Asia, it said in a bourse filing on Thursday (May 30).

 

Loss per share stood at 13.98 Singapore cents for the half year, down from earnings per share of 0.47 cent the previous year.

 

A final dividend of one Singapore cent per share was recommended for the year, down from 1.5 cents the year before, for shareholders&rsquo approval at the upcoming annual general meeting. The date payable will be announced later.

 

For the full year, the company reported a net loss of S$58.7 million, compared with a net profit of S$22 million a year earlier.

 

Full-year revenue fell 3.6 per cent to S$1.1 billion, from S$1.2 billion in the year-ago period.

 

Earlier in May, the company guided for a net loss of between S$58 million and S$68 million for the year due to impairment losses for XIC Innovation, one of its industrial investments.

 

Then, GP said XIC Innovation and some of its subsidiaries had received a winding-up petition, but they maintained and continued their business operations with the support of major customers and suppliers.

 

The company noted that the loss was non-cash in nature, which would not have a substantial adverse impact on GP&rsquo s current and future operating cash flow and future operating earnings.

 

Looking ahead, GP expects the global economy to remain soft with high inflation and high interest rates, which would affect consumer spending on electronic and acoustics products.

 

Demand for the group&rsquo s batteries products may be affected when major overseas customers continue to optimise their inventory level and reduce their inventories, it added.

 

High interest rates are also pushing up finance costs, and the group may explore funding some of its future expansions by other sources of financing to reduce costs.

 

While disruption to global shipping services has lessened, there will likely be continued shortages of certain electronics components.

 

But if the US dollar continues to strengthen against the Chinese yuan, it may reduce cost pressures and provide more flexibility to price products and optimise its production capacity, the company said.

 

GP Industries G20 0.00% has announced that its wholly-owned subsidiary GPI International has entered into a HK$660 million ($112.7 million) three-year loan facility agreement.

 

The proceeds from the loan facility will be used for general corporate purposes, including refinancing the group&rsquo s existing borrowings and financing its working capital requirements.

 

The agreement is liable to be cancelled should Gold Peak Technology Group cease to be the single largest shareholder of GP Industries or should GP Industries&rsquo chairman and CEO Victor Lo resign from his positions or cease to be the single largest shareholder of Gold Peak Technology.

 

Gold Peak Technology and Lo are currently the controlling shareholders of GP Industries, with direct ownership of 85.59% and 0.06%, respectively, of its shares.

 

GP INDUSTRIES garnered the support of a majority of shareholders at an extraordinary general meeting on Monday (Dec 4) to alter the objects clause and adopt a new constitution.

 

This grants the company full capacity to undertake any business, activity and transaction.

 

These special resolutions aside, GP Industries also had approval from shareholders to distribute the 483.8 million shares it holds in GP Energy Tech to shareholders.

 

The distribution in specie will be carried out on a pro rata basis of one GP Energy Tech share for each ordinary share in the capital of GP Industries, disregarding fractional entitlements.

 

The player in the fields of battery solutions and acoustics and electronics, as well as industrial investments, published the results of this meeting in a bourse filing on Monday.

 

In its circular published earlier, an altered objects clause was said to give GP Industries the flexibility afforded by section 23 of the Companies Act so as to adapt to the &ldquo rapidly changing business environment&rdquo , the company stated.

 

It, however, sought to assure shareholders that it would still need to comply with the Companies Act and the listing rules in its conduct of business.

BATTERY maker GP Industries : G20 0% posted a 55.1 per cent fall in net profit for the first half of FY2024, amid a decline in sales and the absence of one-off disposal gains it had recorded a year ago.

 

Net profit for the six months ended Sep 30 stood at S$8.9 million, down from S$19.8 million in the year-ago period. On a per-share basis, earnings were down to S$0.0184, from S$0.0409 previously.

 

The company declared an interim dividend of S$0.01 cent per share, unchanged from the year-ago period.

 

The company&rsquo s revenue fell 5.3 per cent in the first half to S$564.2 million, with revenue of its core batteries business falling 5.5 per cent to S$438.9 million.

 

Sales of primary batteries and rechargeable batteries decreased by 3.8 per cent and 14.6 per cent, respectively. Sales to Asia and Europe decreased, even as sales to the Americas increased slightly.

 

KEF GP Group, the subsidiary involved in the electronics and acoustics business, similarly booked a 4.3 per cent decline in revenue to S$125.3 million, with lower sales of KEF-branded speaker products.

 

The company&rsquo s other operating income for H1, meanwhile, decreased by 68.7 per cent to S$12.8 million.

 

A year earlier, it had recorded one-off gains on a disposal of S$12.4 million for its stake in an indirectly held associate, STL Technology, and S$10.6 million for the sale of its subsidiary, Huizhou Modern Battery.

 

It did not have such one-off disposal gains in the latest half-year.

 

Looking ahead, GP Industries expects high interest rates to significantly increase its finance costs. It may explore other sources of financing for future expansion.

 

It added: &ldquo Disruption to global shipping services is improving, but shortages of electronics components are expected to continue posing challenges to the group in optimising its inventory level and in reducing its working capital requirements for fulfilling its delivery commitments.&rdquo

 

On the upside, the recent strengthening of the US dollar against the yuan may reduce some cost pressure and provide more flexibility for the company to price its products and optimise production capacity.

 

GP Industries has also implemented operational efficiency enhancement and expense control measures. Administrative expenses in H1 fell by 11.8 per cent to S$70.9 million, thanks to lower staff costs with a headcount reduction, salary reduction for senior management and lower rental expenses.

 

The company is hopeful that demand for KEF consumer speakers will gradually strengthen, while demand for Celestion professional speaker drivers will benefit from more public performance events.

 

GP INDUSTRIES : G20 +0.79% on Tuesday (May 30) posted a 91 per cent drop in second-half net profit after the battery manufacturer recorded a drop in revenue and other operating income, as well as higher finance costs.

 

Net profit from continuing operations for the six months ended March stood at S$2.2 million, compared with S$25.1 million in the same period the previous year. This translates to earnings per share (EPS) of S$0.0047 from S$0.0518 previously.

 

Revenue for the second half fell 8.2 per cent to S$554.5 million from S$603.8 million in the same period the year before.

 

Other operating income was down 87.7 per cent on year to S$5 million from S$40.7 million. Finance costs, meanwhile, rose 71.8 per cent to S$16.9 million in H2 2023 from S$9.8 million in H2 2022.

 

Other operating expenses, however, were down 68 per cent to S$10.4 million from S$32.5 million previously.

 

The group&rsquo s full-year net profit from continuing operations fell 48.8 per cent year on year to S$22 million, translating to an EPS of S$0.0456.

 

Full-year revenue slid 5.9 per cent to S$1.2 billion. GP Industries attributed the decline in revenue to poorer performance for its batteries business. Geographically, sales in Europe and the Americas fell, although Asia sales rose.

 

The board proposed a final dividend of S$0.015 for the full-year period, compared with S$0.02 the year before. The record date and date payable will be announced at a later date.