Golden Saint Technologies plc (LON:GST) Managing Director Pierre Fourie caught up with DirectorsTalk for an exclusive interview to discuss their Letter of Intent with Siam Motors, company strategy , geographic focus and the main elements of their investment case.
Q1: Pierre, if I can start by asking you to talk a little bit more about your wider strategy as a business and more specifically around your focus on data centres?
A1: GST is a technology investment company so we invest in technology companies that have a good history, have good people, preferably some profitable companies as we have done in EMS and we then look at growing those companies, focussing at high growth areas.
In technology right now, there are quite a few areas that GST is operating in and expanding into, one of the areas, we mentioned at our IPO that we would like to start building our own data centres. We do build data centres as part of our EMS infrastructure company, we build data centres for clients and with our London listing, we’ve been able to start building bigger ones for our clients but we have aspirations to build our own.
In terms of data centres, we focus on areas that are fast developing where we can put a data centre in an area that is close to the end user so that’s definitely our focus with data centres. With 5G coming, the Internet of Things, the amount of data being generated, you will see a bit of a transition in data centres that the requirement is more and more to be close to the end user. This will reduce the latency and to get some edge computing going so that the data being stored in the big data centres is not much.
Q2: You’ve just announced that you’ve signed a Letter of Intent with Siam Motors Co to enter into a joint venture, can you tell us more about that?
A2: Yes, we’re very excited about that. We have identified in Thailand, in the eastern province of Chonburi, a potential for data centres, the government is giving a lot of incentives there, tax incentives, and really developing that area so it’s a fast developing area.
We identified a local partner, Siam Group, a very well-known family in Thailand, well respected businesspeople and they own the land. So, the idea is that they’ll give the land, the building, the backup power and GST will become an equity partner and will construct the data centre computer part of it, if I can call it that.
Q3: So, do you think partnering with other organisations for these projects will be typical of the Golden Saint Technologies strategy?
A3: I would say so, yes. The data centre game, once you start filling out your data centre, you can do a bigger portion debt financing so that will allow us to increase our equity portion in the future.
Certainly, finding the right local partner, someone that is strong in business in the area, plus we’re looking at partners like the telco’s that brings in another dimension, they’re going to be one of our big clients.
So, I think this model of partnering with people is certainly part of our future strategy.
Q4: You mentioned earlier about location, does this mean that you have a geographic focus and if that’s the case, why is that?
A4: Yes, we started close to home, close to Singapore, Singapore itself we’ve seen some big data centres going up and we’ve got clients who are building data centres there.
For ourselves, we focus more on the areas that are developing so this part of Thailand, although Thailand is quite developed in terms of Bangkok, this eastern part is definitely looking at some big growth.
Then we’re looking at Indonesia, Malaysia, around where our home base in Singapore is, but also looking at Africa, the fibre optic backbone is going into Africa so there’s definitely opportunity there as well as the rural parts of India.
So, our focus is on those kinds of geographies.
Q5: Just for investors, what do you think the main elements of your investment case are and why is Golden Saint Technologies an attractive proposition for shareholders?
A5: Our strategy for value creation for shareholders I think is quite sound and I think it’s quite clear. We invest in good companies that have good history, profit making companies but that are operating in high growth areas of the technology, the ICT game.
So, growing that from strong infrastructure development companies that form the basis of the Internet of Things; 5G, all those new technologies, will need what we do as the base and on top of that, we develop other businesses and we acquire additional businesses.
So, the fact that we’re profitable means we’re not coming back to the market all the time for working capital but we actually identify opportunities for acquisition and we want to grow aggressively over the next few years.