GTCAP confirms interest in healthcare, energy for 'direct investments'

GT Capital [GTCAP 535.00, down 1.5%] [link] confirmed a BusinessWorld report on its plan to pursue direct investments in the healthcare and energy sectors. In the report, GTCAP’s CFO is quoted as saying that the company is looking for domestic-consumption opportunities in “fragmented” sectors that are not highly regulated, and that it is looking to deploy up to $200 million to “fund expansion in underpenetrated segments.” GTCAP confirmed the report, but said that it had no definite plans, and that any investment would be subject to several considerations, like the company’s “minimum return hurdles”. 

MB bottom-line: I said earlier this week that GTCAP feels like a conglomerate at a crossroads, but the more I see and hear, the less confident I become in their approach. Getting into healthcare sounds like a cynical move to invest in some stuff that will somehow eventually end up in Metro Pacific Health’s financial statements, not something that will take root and grow to provide income over the coming generations. And don’t get me started on energy. I love energy, we need more energy, but “maybe we’ll do energy” is a thing that literally any company can say. Why is GTCAP ignoring its primary competitive advantage, which is Toyota Motor Philippines Corp.? The new/used car game is definitely domestic-consumption driven, and the industry is still quite fragmented. Car sales are not a heavily regulated industry, and given TMPC’s massive jump in profitability in FY24, whatever they do with cars is bound to step over those internal return hurdles like LeBron could step over Manny Pacquiao. 

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