Segmental Information

Business Prospect

-Proposed establishment and implementation of an Employees’ Share Option Scheme (“ESOS”) for the eligible employees and eligible Executive Directors of Ge-Shen and its subsidiaries. It is cost to the Group and dilution to existing shareholders

-Contracts being negotiated in Ringgit terms.

-Fareast imported wage-inflation and financing cost may be increased

-Having acquired land and buildings in our subsidiaries in Ge-Shen Plastic Sdn Bhd in Johor, Malaysia and Ge-Shen Vietnam Co. Ltd in Hai Phuong, Vietnam (which were both completed in 4Q2016). After completion of manufacture facilities will be implemented to generate revenues.

-RM44.5 million to deployed for capital expenditure (CAPEX) to increase its manufacturing capacity and capabilities

History

-May 2015, acquisition of 75% equity interest in Polyplas Sdn. Bhd. for a total consideration of RM33,756,253. (47% is funded by internal fund and 53% proceeds from issuance of the Redeemable Convertible Preference Shares)

- May 2015, disposal of the loss making subsidiaries

-September 2016, acquired the remaining 25% equity interest in Polyplas Sdn. Bhd.

-September 2016, acquired 70% equity interest in Demand Options Sdn. Bhd, remaining 30% will acquired after 3 year. Helping Tool Fabrication (模具加工) and reach Singapore market.

- October 2016, Acquisition of a double storey detached warehouse for a consideration of RM9.5 million from TNLOGIS, reduce rental cost.

Disadvantages

-Facing seasonality

-High gearing (debt)

-May face shortage of fund

-low profit margin

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新的两间产房有助于提升盈利，收购发展导致债务过高。

Current Price 1.98

Target Price 2.30 (not include the two new land in Malaysia and Vietnam)

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