Tracing its roots back to 1979, GSS Energy’s precision engineering business is involved in the production of microshafts, precision components, and assembly mechanisms, serving a wide range of industries.
This initial business was listed on the SGX in 1993, and was subsequently transferred to GSS Energy in February 2015 – encompassing low risk and low cost onshore oil and gas production and exploration in Indonesia. This diversified the group’s revenue generation, and enabled them to capitalise on growth opportunities.
More recently, GSS Energy has ventured into the Electric Vehicle (EV) segment, developing and manufacturing electric motorcycles and battery-packing solutions. This aligned the group to shifting global trends towards green technologies and rising demand for sustainable transportation solutions.
For those interesting in precision engineering and the oil & gas segments, here are 5 things to know about GSS Energy.
#1 Are There Any Upcoming Projects Or Developments That Investors Can Look Forward To?
GSS Energy is undertaking several initiatives that reflect its strategic vision for growth and innovation.
One of the Group’s key developments is the launch of its EV battery-packing business, scheduled to commence operations in the first half of 2025. This initiative not only enhances the Group’s footprint in the EV ecosystem but also explores diverse battery applications beyond EVs.
Another noteworthy project is a collaboration between Giken Sakata, a subsidiary of GSS Energy, and Estonia-based 5.0 Robotics. Together, they are co-developing the Minifactory, a compact production unit tailored for high-mix, low-volume manufacturing. Leveraging technologies such as robotics, artificial intelligence, IoT, and cutting-edge CNC systems, the Minifactory sets a new benchmark for flexibility and efficiency in production.
Furthermore, the Group is actively exploring opportunities in the medical and healthcare sectors, which are known for their robust margins and resilience. These industries represent a path for sustained growth and long-term profitability.
#2 Can You Share More On The Reasons For The Group’s Recent Full-Year Losses, And How Management Is Working To Turn Things Around?
The Group’s recent losses are attributed to a combination of factors. Revenue declined year-on-year particularly in the mechanisms and microshaft divisions, as demand weakened amidst broader macroeconomic challenges.
Additionally, the EV business, still in its nascent stages, has required significant upfront investments that have yet to yield expected revenue growth.
In response, GSS Energy is implementing targeted strategies to address these challenges. The Group is enhancing productivity by adopting advanced technologies and upgrading equipment to boost operational efficiency. This can also be a springboard for business opportunities in energy storage solutions.
It is also shifting its focus toward higher-margin industries, such as the medical and healthcare sectors, by leveraging its engineering expertise.
Furthermore, the company is exploring opportunities in non-EV battery-packing applications to diversify its revenue streams. GSS Energy aims to scale production and expand into regional markets. Collaborative ventures, such as the partnership with 5.0 Robotics on the Minifactory project, will drive technological innovation and further strengthen the Group’s PE segment.
#3 How Is The Group Managing Its Financial Position And Liquidity Given Rising Payables, Declining Cash, And Covenant Breaches?
The Group has implemented a multi-faceted strategy to safeguard its financial position amid ongoing challenges. To manage rising trade and other payables, GSS Energy is streamlining its cost structure, reallocating resources to higher-margin segments, and introducing productivity-enhancing measures. These efforts are underpinned by targeted investments in technology and operational improvements.
The Group is also maintaining active engagement with its lenders, negotiating revised loan terms, and ensuring adherence to covenant requirements. Regular updates are provided to banks, demonstrating transparency and accountability.
To further strengthen its liquidity position, GSS Energy is exploring alternative funding options, including equity fundraising. The Group is also leveraging government grants and initiatives to optimize operations and reduce dependency on debt. Shareholders are kept informed of these measures, ensuring alignment with the Group’s long-term financial recovery strategy.
#4 How Does The Rights Issue Benefit Minority Shareholders, And Does The 71.9% Subscription Rate Affect The Group’s Plans?
The rights issue, structured as a 9-for-10 offering in October 2023, allowed minority shareholders to preserve or increase their proportional ownership at a discounted price. This initiative aimed to secure funding for critical growth projects, including the expansion of the EV battery business and the Group’s diversification into new revenue streams. Part of the proceeds was also used to offset a prior shareholder loan, which had been extended for working capital purposes. This loan was partially applied toward the shareholder’s rights entitlement without requiring an additional cash injection.
Although the subscription rate of 71.9% resulted in a capital raise below the initial target, the proceeds are sufficient to support the Group’s strategic initiatives. Management remains confident that these funds will enable GSS Energy to execute its plans and deliver value to shareholders.
#5 How Will The Focus On Sustainability Create Long-Term Value For GSS Energy?
Sustainability is an increasingly central element of GSS Energy’s strategy, particularly in its EV segment. Through the development and promotion of electric motorcycles and battery-packing solutions, the Group is actively contributing to advancing sustainable transportation and the global push to reduce carbon emissions.
These reduce the Group’s environmental impact and aligns with global sustainability trends and stakeholder expectations.
By prioritizing innovative and environmentally friendly technologies, GSS Energy can capitalise on growth opportunities in the renewables space that are shaped by environmental priorities and regulatory changes.
Read Also: 5 Things To Know About CNMC Goldmine (SGX: 5TP), Exploring, Mining And Processing Gold In Malaysia
Editor’s Note: Some answers for this article were extracted from the SGX 10 in 10 series published on 4 February 2025 and republished with permission. You can read more on GSS Energy (SGX: 41F) on the SGX website.
Read other featured companies from SGX’s 10 in 10 series on the DollarsAndSense website.
The post 5 Things To Know About GSS Energy (SGX: 41F), An Established Precision Engineering Firm With Investments In Oil & Gas appeared first on DollarsAndSense.sg.
