Gold Peak Industries : Announcement of 2016/2017 interim results of GP Batteries International Limited

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(Incorporated in Hong Kong under the Companies Ordinance)

(Stock Code: 40) Announcement of 2016/2017 Interim Results of GP Batteries International Limited

Pursuant to Paragraph 13.09(2) of the Listing Rules, the Board of Directors of Gold Peak Industries (Holdings) Limited is pleased to announce the unaudited consolidated results of GP Batteries International Limited for the six months ended 30 September 2016. GP Batteries Group's turnover decreased by 7.7% to S$371.4 million and the net profit attributable to equity holders of GP Batteries decreased by 69.5% to S$3.8 million.

Pursuant to Paragraph 13.09(2) of the Listing Rules, the Board of Directors of Gold Peak Industries (Holdings) Limited (the "Company") is pleased to announce the unaudited consolidated results of GP Batteries International Limited ("GP Batteries" and together with its subsidiaries, "GP Batteries Group") for the six months ended 30 September 2016. GP Batteries is a 64.7%-owned subsidiary of GP Industries Limited which is in turn an 85.5%-owned subsidiary of the Company. Both GP Batteries and GP Industries Limited are companies listed on the Singapore Exchange Securities Trading Limited.

GP BATTERIES INTERNATIONAL LIMITED UNAUDITED CONSOLIDATED RESULTS For the six months ended For the six months ended 30 September 2016 30 September 2015 S$'000 HK$'000 S$'000 HK$'000

(Restated) (Restated)

(Note) (Note)

Turnover	371,417	2,122,945	402,492	2,275,247
Cost of sales	(289,768)	(1,656,256)	(311,644)	(1,761,692)
Gross profit	81,649	466,689	90,848	513,555
Other operating income	8,633	49,345	14,142	79,943
Distribution expenses	(30,346)	(173,452)	(37,267)	(210,667)
Administrative expenses	(42,339)	(242,001)	(43,179)	(244,086)
Finance costs	(3,331)	(19,039)	(3,224)	(18,225)
Profit before share of results of associates	14,266	81,542	21,320	120,520
Share of results of associates	2,934	16,770	2,364	13,363
Profit before income tax	17,200	98,312	23,684	133,883
Income tax	(7,353)	(42,028)	(4,970)	(28,095)
Profit after income tax	9,847	56,284	18,714	105,788
Attributable to: Equity holders of GP Batteries	3,835	21,920	12,587	71,153
Non-controlling interests	6,012	34,364	6,127	34,635
9,847	56,284	18,714	105,788
S cents	HK cents	S cents	HK cents
Earnings per share	2.43	13.89	7.69	43.47
Dividend per share Interim	1.00	5.72	3.00	16.96

Note:-

The Hong Kong dollar equivalents as shown above for illustrative purposes are converted at the average exchange rates for the respective periods.

REVIEW OF OPERATION

Turnover for the three months ended 30 September 2016 was S$194.0 million, a decrease of 8.9% over the corresponding period last year. Turnover for the six months ended 30 September 2016 was S$371.4 million, a decrease of 7.7% over the corresponding period last year.

Global demands for primary batteries and Nickel Metal Hydride batteries were very slow growing and price competition was very keen. Sales of primary batteries decreased by 6.8% and 5.4% for the three months and six months ended 30 September 2016 respectively over the corresponding periods last year. Sales of rechargeable batteries decreased by 20.6% and 17.5% for the three months and six months ended 30 September 2016 respectively over the corresponding periods last year. The drop in the revenue of rechargeable batteries was mainly due to the discontinuation of a contract with a major customer of the Taiwan plant.

Sales in the Americas and Asia decreased by 34.0% and 12.8% respectively while sales in Europe increased by 33.5% for the three months ended 30 September 2016 over the corresponding period last year. For the six months ended 30 September 2016, sales in the Americas and Asia decreased by 38.0% and 8.5% respectively while sales in Europe increased by 31.6% as compared to the corresponding period last year. The decrease in sales in the Americas and increase in sales in Europe were largely due to the relocation of the procurement office of a major customer from the USA to Europe.

Profit before income tax for the three months and six months ended 30 September 2016 was S$10.4 million and S$17.2 million respectively as compared to S$15.6 million and S$23.7 million over the respective corresponding periods last year. Gross profit margins for the three months and six months ended 30 September 2016 were 22.5% and 22.0% respectively as compared to 22.0% and 22.6% in the respective corresponding periods last year.

Distribution expenses for the three months and six months ended 30 September 2016 were S$16.5 million and S$30.3 million respectively as compared to S$21.7 million and S$37.3 million over the respective corresponding periods last year. The decrease is mainly due to the lower advertising and promotion expenses during the period and the provision for doubtful debt of S$4.0 million made in the second quarter last year.

Finance costs for the three months and six months ended 30 September 2016 were S$1.6 million and S$3.3 million respectively as compared to S$2.0 million and S$3.2 million over the respective corresponding periods last year. The reduction in the quarter is mainly due to lower interest rates for the S$85 million three-year term loan facility as a result of the improvement in one of the key financial ratios that determines the interest margin applicable.

Net other operating income for the three months and six months ended 30 September 2016 was S$5.7 million and S$8.6 million respectively as compared to S$14.1 million and S$14.1 million over the respective corresponding periods last year mainly due to a smaller foreign exchange gain of S$2.0 million recorded this year as compared to a foreign exchange gain of S$9.2 million last year.

Share of profits of associates for the three months and six months ended 30 September 2016 was S$1.3 million and S$2.9 million respectively as compared to S$1.6 million and S$2.4 million over the respective corresponding periods last year. The performance of AZ Limited, GP Batteries Group's 40%-owned associate in Russia, has recovered significantly whilst the performance of STL Group has decreased compared to the same period last year.

OUTLOOK

The market for primary batteries and Nickel Metal Hydride batteries is expected to continue with slow growth, and price competition is expected to remain very keen. There is apparently quite a bit of unsold capacity among competitors in Asia.

The rechargeable Lithium battery business, while representing less than 5 percent of GP Batteries Group's business currently, will require some time to develop new applications and new key customers to replace the contract lost by the Taiwan plant. Development of the new factories in Malaysia and Vietnam is on schedule and is expected to bring in additional revenue during the coming six to twelve months. At the same time, GP Batteries Group is downsizing some of the smaller plants, such as the ones in Taiwan and Shanghai, consolidating the production with the bigger plants in Ningbo, Guangdong and Malaysia. Some of the more labour intensive manufacturing may be moved to Vietnam. This is incurring closure costs during the current financial year. However, overall cost competitiveness is expected to improve when the consolidation is completed.

GP Batteries Group will continue to invest on building the "GP" brand and expanding the distribution network globally.

BOARD OF DIRECTORS

As at the date of this announcement, the Board consists of Messrs. Victor LO Chung Wing (Chairman & Chief Executive), LEUNG Pak Chuen, Richard KU Yuk Hing, Andrew CHUANG Siu Leung and Brian LI Yiu Cheung as Executive Directors, Messrs. LUI Ming Wah, Frank CHAN Chi Chung and CHAN Kei Biu as Independent Non-Executive Directors, and Ms. Karen NG Ka Fai as a Non-Executive Director.

By Order of the Board

WONG Man Kit

Company Secretary

Hong Kong, 10 November 2016

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