Peak Positioning Technologies (
CSE: PKK,
Forum), a Canadian IT portfolio management company based out of Montreal, Quebec, has recently entered into a transformative partnership deal with shareholders of Shanghai-based Banlan Industrial, a petrochemical products trade and industrial investment group enterprise. The $4.0 million strategic investment partnership calls for Peak to serve as an investment vehicle for Banlan Partners to finance the development of a ground-breaking web-based platform for the Chinese plastics industry, known currently as the ‘Plastic Bank’. With this deal, Peak Positioning Technologies seems to be on the brink of helping disrupt a massive multi-billion Chinese plastics market. Stockhouse writers sat with Peak Positioning President, CEO & Director, Johnson Joseph, to get a peek under the hood of the company and its future potential.
For investors not familiar with Peak Positioning, can you give me the 30 second “elevator pitch” of the company?
There are some very interesting investment and growth opportunities in China, particularly in certain tech sectors such as e-commerce and fintech. Our goal at Peak is to use our public vehicle to allow North American investors to take advantage of those opportunities, but without being subjected to the volatility of the Chinese stock market. We do that by partnering with successful and trusted Chinese businesses and individuals who share our vision, understand what it takes to be successful in China, and understand the importance of transparency and disclosure to North American investors.
What were the reasons behind creating the company?
Peak is now a holding company, but the company actually started out as a mobile security software developer. Our products and my personal relationship with LongKey’s CTO, Liang Qiu, also known as “Golden”, led us to China in 2010. We eventually realized that we could realize better value for our
shareholders by transitioning the company to what it is today.
You’ve recently signed a CDN $4M CAD strategic investment partnership with a large company in China called Banlan Industrial, an aggregator of plastic raw materials, can you give me some background on the partnership and what it means for Peak Positioning?
First, I should clarify that our partnership isn’t actually with Banlan, but rather it’s with the shareholders of Banlan. Banlan is part of a conglomerate called ZHWY Enterprises, which owns several businesses including factories, investment and financial services companies. Ninety five percent of ZHWY is owned by a gentleman called Mr. Jiang Wang. Mr. Wang was looking to bring some of his business operations to the web through a variety of transaction-facilitating platforms, and for a North American partner and a public vehicle in which to manage the platforms’ operations, as, well as to roll some of his business operations in, including Banlan’s plastics distribution operations. We were introduced to Banlan and Mr. Wang through Golden and after several months of discussions, we were able to agree on a partnership.
The partnership is an absolute game-changer for Peak. We’re very confident that it will allow Peak to generate the level of revenues and profits that would allow the company to go from the penny stock it is today, to a TSX and/or NASDAQ listed company within the next three to four years.
You mention in the press release that you’ll be working with Banlan to create a web-based platform called “The Plastic Bank”. Can you tell me more about what the Plastic Bank is and how it will work? What are the potential revenue streams from The Plastic Bank?
As an importer and distributor of plastic raw materials in China through Banlan, Mr. Wang noticed that there would be opportunities to provide additional services to manufacturers and other players in the space. For example, some manufacturers need warehousing, others need logistics, and a very large number need purchase order financing and loans. The Plastic Bank platform will allow plastic manufacturers and distributors to log into a web interface to place raw material orders and apply for other related services mentioned above. The Plastic Bank platform and its related services will be managed and operated by a new company (let’s call that company “Peak China” for now), which will be a 100% owned subsidiary of Peak.
In addition to managing and operating the Plastic Bank, Peak China will also gradually take over the plastic raw material distribution activities currently being performed by Banlan. So Peak China’s revenues will come from the distribution of plastic raw materials, electronic transaction processing, warehousing and logistics services, and loan and purchase order financings. Other revenue streams will be added in the future as more of ZHWY businesses and projects are put under the Peak umbrella.
So, it sounds like the Plastic Bank has the potential to become the “Alibaba” of the plastics industry in China? Do you see any parallels with Alibaba and would that be a fair assessment? Are there any other companies that are doing what you’re doing in other markets?
Yes, I would say that on some levels, the Plastic Bank can be compared to Alibaba’s model. Certainly if you look at the payment processing and financing aspect of Alibaba’s business (Alipay), and what the Plastic Bank will aim to bring to the plastic industry in China in terms of transaction processing and financial services, you can definitely draw some parallels there.
A lot of companies talk about the difficulty of building successful business partnerships in China. How have you been able to overcome the obstacles of operating in China?
I would say that doing business in China takes a very high level of commitment. If you’re going to be successful in China, I don’t think you can just find a partner and think that your work is done. I think to be successful in China, you have to be committed to being physically present, and that’s something that’s not easy to do, and one of the main reasons why partnerships in China fail. This is something that we had to learn for ourselves and why we now travel frequently to China and will continue to do so to maintain the relationships with our partners and stay on top of our future operations.
Can you give me a few reasons why an investor should be interested in your company?
In my opinion, investors who typically invest in companies at this stage are looking for growth.
I would say that with this partnership, I don’t think there are many other companies with the same growth potential that we would offer investor. I think that alone is a good reason for an investor to take a serious look at Peak as a potential investment.
Sure some investor may be concerned that we’re dealing with China, but I think that investors also know that when done right, partnerships with China can be very successful and profitable. I have no doubt that this partnership is being done the right way and will be very successful.
What are the major corporate milestones that investors can expect in the first part of 2016?
The first would be to receive the balance of the CDN $4M investment from our Chinese partners to officially finalize the partnership agreement. The second milestone would be the official launch of the Plastic Bank platform. And the third major milestone would simply be the filing of our Q1 2016 financial statements.
FULL DISCLOSURE: Peak Positioning Technologies is a Stockhouse Publishing client.