KUALA LUMPUR (July 25): Cash-rich Globetronics Technology Bhd (KL:GTRONIC) on Friday defended its RM45.05 million acquisition in Mpire Global Bhd (KL:MPIRE), saying the move aligns with its long term transformation strategy and provides business synergistic to its existing business.
The investment provides a strategic entry point into a multi-segment platform, granting the group immediate operational exposure and a strong base to co-lead Mpire’s future growth, particularly in fleet management and logistics-enabled services, said Globetronics in a bourse filing.
The services include multi-brand vehicle dealerships, after-sales support, and telematics-enabled vehicle lifecycle services, the group said.
On July 18, Globetronics announced the acquisition of a 30.85% stake and 53.99% of warrants in Mpire (formerly known as Sand Nisko Capital Bhd), making the group the largest shareholder in the company. Mpire is involved in property construction and development, as well as fleet management services — including the trading and leasing of motor vehicles.
Globetronics, in its filing on Friday, said the group is at a pivotal phase as it addresses structural headwinds in its consumer electronics-centric semiconductor business
"The urgency for strategic diversification into higher-growth, longer-lifecycle sectors such as automotive electronics — particularly those where Globetronics can leverage its strengths in electronics integration, sensor packaging, and microelectronics," the group said.
In terms of financial performance, Mpire has remained in the red for the past three financial years. For the year ended Dec 31, 2024 (FY2024), its net loss widened to RM7.04 million from RM4.65 million in the previous year.
Revenue, however, surged 77.04% to RM34.47 million from RM19.47 million in FY2023, driven by stronger revenue contrubution from its property business, alongside the newly acquired fleet management business
Mpire’s overall gross profit margin improved to 15.38% in FY2024, from 8.11% in the year before. But the net loss widened due to a writedown of obsolete inventories, plant and machinery in the group's furniture manufacturing and trading segment.
For FY2023, Mpire's net loss narrowed to RM4.65 million from RM18.44 million in FY2022, supported by better cost control in the property segment. Revenue, however, fell 30.22% to RM19.47 million, from RM27.9 million amid a lower contribution from furniture manufacturing and trading segment.
Prior to this, Mpire incurred a whopping net loss of RM18.44 million in FY2022, as revenue declined 51.46% due to reduced contributions from the property segment. The year's results were further hit by asset written down, litigation provisions from debt owed to an individual.
Mpire booked a net profit of RM1.43 million in FY2021, buoyed by the property business, whose revenue accounted for 76% of the total group revenue of RM57.48 million that year.
The RM45.05 million acquisition represents over one-third of Globetronics’ RM127.16 million cash pile as at end-March 2025. The group remains debt-free.
Having lost 68% in the past one-year, Globetronics' share price closed half a sen or 1.2% to 41 sen on Friday, giving it a market capitalisation of RM277 million.
Mpire’s shares closed unchanged at 10.5 sen, for a market capitalisation of RM94 million. Over the past one-year, the stock has depreciated 25%.