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Home » News » Equities » Does blockchain specialist GSTechnologies merit its 2000% share price increase?

In terms of share price increases this year it is hard to beat GSTechnologies (LSE:GST), a London-listed company which provides solutions for IT infrastructure like data centres, is hard to beat. Up an eye-watering 2,160% since January part of this gain was genuinely earned while part of it stems from the lockdown-abetted search for the next GameStop-type rally and investors’ newly discovered big love for all things crypto, including blockchain.

Blockchain has been a huge boost for GSTechnologies

Shares rose from 0.14 at the end of December to 3.16 last week as GSTechnologies started transitioning from being a completely unknown player in Europe to beginning to create a presence for itself in the UK and expanding its focus from a provider of internet infrastructure and control systems to adding blockchain solutions to its business.

The core of the company’s business rests on its wholly-owned subsidiary EMS Wiring Systems, an established ICT business with good links across Asia that supplies data centre solutions and intelligent building solutions. For instance, GSTechnologies recently secured a $1m contract to install an integrated security system in a Singapore data centre and won a $200,000 Singapore government grant to develop a prototype cooling liquid used to cool data centres.

Data centres consume a huge amount of power and have issues with overheating, particularly in hot climates, and a liquid cooling system could bring costs down significantly. The sectors EMS Wiring is catering to, such as intelligent buildings, smart cities, data centres and Internet-of-Things, are all set to expand over the coming years. Some of its income flow has been hampered in 2020 because of extensive lockdowns, but with the relaxation of the rules the company is seeing demand picking up.

GSTechnologies’ explosive growth into blockchain

However, the most explosive growth is likely to come from GSTechnologies’ branching out into blockchain technology, as everybody from Facebook to NASA to medical record keepers are now looking to use blockchain as a secure and decentralised way of keeping records.

Blockchain is a specific type of database that stores data in virtual blocks that are then digitally chained together. The chains can be used for all types of information but their most prominent use is as a ledger for bitcoin or other crypto transactions. Data is saved in a decentralized way so that no single person or group has control over it, making it very secure.

At the start of February GSTechnologies signalled its new start as a blockchain provider by setting up a UK subsidiary, GS Fintech. The move comes as part of an expansion into the UK and later the European market, which will be followed up by a similar subsidiary in Singapore.

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The blockchain business will be led by Jack Bai, a serial entrepreneur and the founder of Wise Mpay and Coalculus, a blockchain digital payment platform mostly active in Southeast Asia. What is interesting about Coalculus is that apart from traditional retail users it also caters to a large segment of the Southeast Asian population who have no bank accounts but may have more than one phone and use those for all manner of payments and financial transactions. While Coalculus was set up to facilitate payments in bitcoal, a mini-me version of bitcoin, the technology underpinning it can be used for any cryptocurrency.

For the time being the company is keeping its cards close to its chest about what it plans to do next but it is clear that it has more plans in the digital payment space and further updates are set to follow. With blockchain being the flavour of the month we expect to see further rallies when they do.


This article is not investment advice. Investors should do their own research or consult a professional advisor.

Vanya Dragomanovic

Vanya Dragomanovich

Vanya is an award-winning financial journalist who has worked in both television and newswires. She spent over 10 years at Dow Jones covering commodity markets, including metals, coffee, cocoa and oil. She also reported from the floor of the London Metals Exchange, and appeared on CNBC to discuss international metals markets. Since then she has written for several leading financial publications, including serving as commodities editor for FTSE Global Markets.

Vanya continues to cover international commodities markets globally, specialising in particular on metals and alternative energy. She is also the author of a book on CFD trading.

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