Interesting that one of the AGM speeches spoke of further...

Interesting that one of the AGM speeches spoke of further acquisitions.

CEO Mr Craig Dower answered a holder's question re expansion in Asian nations other than Malaysia and Singapore.

Mr Dower said that most of QIP's merger and acquisitions activity is focused into expansion in Asia. (This seems sensible, given the increasing cultural fit and the high regard from the days of the Colombo Plan until today that many Asians have for Australians who work in tertiary sectors).

It is looking at opportunities in southeast Asia, into India and up to mainland China/Hong Kong. It has a couple of (probable acquisitions) that are advanced. A QIP team meets every week, and goes through a thorough vetting process for any such possibilities. Cultural fit is important. QIP has associate relationships with and knows most of these firms well. Sortify was a good example, but like all M & A, one can only talk publicly after they occur.

(Code for 'watch this space', and sounds positive assuming that any opportunities are eventually accretive).

Re geopolitical changes in Hong Kong, Singapore may gain further investment. QIP has a team of 16-18 people in its greenfields site opened four or five years ago.

QIP seeks to build strong local relationships, as origination work (local filings of patents and trade marks) is very important. QIP then develops deeper relationships. It is able to support its growing global client base with filings into those communities, and can become a part of the local community. In Singapore, it has been steady progress during the last three to four years, including strong relationships with patent originators.

Re retention of key talent in Australia and Malaysia, Mr Dower said in Malaysia QIP has done a great job in keeping the team together.

As noted in the speech, Principals and staff been in mandatory Malaysian lockdown or some other sort of control order since March 2020, with quite high COVID-19 death rates and case numbers. Mr Dower made the sobering point that in Malaysia, the COVID-19 experience has been different (so far) to Australia's. (Fewer Australians would know someone who's died from it, or with it, than is the case in many southeast Asian nations).

The team worked through this period despite the big challenges. It now has a female managing Principal in Malaysia.

In Australia, QIP's 'unmanaged attrition' (what laymen might call 'unexpected departures of Principals or staff) was about eight per cent, which Mr Dower said was quite low. (To retain 90 per cent of staff, who could in theory be seduced by other worldwide operators larger than QIP, is an achievement).

QIP has been recruiting in the past year and has seen a good flow of high quality candidates. Mr Dower made the salient point that it's a continuing process. QIP's Principals used to be Partners in the previous (unlisted) structure but the responsibility of stewardship and mentorship continues to this day.

Overall this company seems to have a reasonably good outlook. Asian expansion may be slower than one would hope but it's good that QIP seems to know the waters prior to taking a dip. Hopefully, less chance of the corporate version of 'man overboard'.

COVID-19 uncertainties remain, of which perhaps the biggest is how politicians and unelected yet fallible health 'advisers' are often catastrophist in their response.

This has many unexpected downsides such as we've seen in Melbourne, Victoria's has arguably the most incompetent handling of the novel coronavirus of anywhere in Australasia with so-called 'developed world'.

It's pleasing QIP doesn't appear to have too many difficulties retaining team members and intellectually invigorating them on an ongoing basis via specialised training. It is a people business, as the Chairman and MD/CEO observed.

One concern must be that Chairman Mr Richard England is departing.

The stock is rather illiquid. It's not alone among smaller ASX-listed entities in that regard.