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  • Asked by Isaac Chan

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Mar)

    241 Answers, 514 Upvotes
    Answered 1m ago
    TL;DR Kimly seems to be a mature and defensive business but an intense F&B space might threaten its growth. What is Kimly’s Business Profile? Kimly is also another household name, being one of the largest traditional coffee shop operators in Singapore with more than 25 years of experience. In total, they manage a network of 67 food outlets such as food clique, as well as 129 food outlets. Kimly does not actually own the coffeeshop properties, but they lease the space from HDB or landlords as a master lessee. Additionally, they also operate some of the the drinks and food stores. What could happen to Kimly in the future? Mature Business Despite the growth in premium and more niche restaurants in Singapore, I do believe that coffee shop dinning is still a staple of the Singapore food scene. The convenience and affordability of such dinning means that you can frequent such food outlets frequently (which can’t be done for restaurants). In short, customer turnover and customer acquisition cost is much lower for coffee shops than restaurants. Innovation Like other food courts, Kimly has tried to innovate as well by including tray return robots, as well as even conveyor belts. Such innovation should help to facilitate the clearing of tables and allow more customers to dine. In the long run, such moves are probably the right one to make but they need to be refined over time. Competitive F&B Landscape F&B is one of the most competitive spaces in Singapore, due to the many different competitors competing for a market which is not growing in size. Such competition is likely to intensify in the future, with new food chains coming into Singapore. Additionally, the lack of the younger generation who are interested to take over such F&B jobs means that it may be hard to sustain such tenancy in the future. What do their financials tell us? Revenue has increased Year-on-Year since FY2014, reaching a peak of $202m. This shows that there is a demand for such F&B services, and could possibly indicate their Kimly’s offerings allow it to be differentiated from other competitors like Koufu. Revenue seems to be well split between outlet management division and food retail division. This is good to hear since the business isn’t completely reliant on one revenue stream over another. However, gross profit margin has decreased over the years. This could be due to expansions improving profits but decreasing overall profitability. With a current ratio of more than 1.5, short-term liquidity still seems alright. With most of current assets being made up of cash, this should help with meeting their short-term financial obligations. With low levels of debt and strong coverage of interest expenses, debt shouldn’t be an issue that Kimly will face in the future. Cashflow from operations had decreased in FY18, due to a $17.8m increase in receivables. Other than that, cashflow from operations seems to be relatively stable and growing since FY14.
  • Asked by Isaac Chan

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Mar)

    241 Answers, 514 Upvotes
    Answered 1h ago
    TL;DR Koufu is definitely a brand most of us recognise, and revenue has grown over the past few years due to strategic initiatives. However, the F&B space in Singapore is very competitive. What is their business profile? I don’t think there is much to explain about the business profile of Koufu. They are a household name, and many of us patronise their foodcourts quite frequently (i do!). Other than food courts and coffee shops, they also include tea kiosks, full service and quick service restaurants. What is Koufu’s current focus? Strategic Expansion One of their growth strategies is to grow more outlets, while maintaining current ones. With expansion in Macau already, Koufu can tap on the experience and offerings to reach into different parts of the Chinese market as well. Innovation and Productivity Koufu has been trying to improve innovation within their outlets. For example, they have the smart tray return robots, which sometimes roam around the foodcourts. Such moves are aimed at encouraging diners to return their trays which would potentially free up more space for additional diners to sit. It is also supposed to reduce manpower costs. However, from what I have seen, this strategy doesn’t seem to be working very well. The robots are not in use, and they haven’t been cleared fast enough such that I couldn’t clear my crockery there. How might the business fare in the future? Tough Retail and F&B Market As many of us know, the retail market in Singapore hasn’t been doing too well. This could be caused by the growth of e-commerce, but could also be caused by more malls being introduced over time without population growing. This also means that there is limited potential for the company to grow in the future. Unfortunately, having the bulk of its revenue coming from Singapore doesn’t help either. Food safety and licences Potential lapses could lead to reputation being affected or licenses being revoked. Food contamination and tampering of food at certain stalls can also affect the publicity of Koufu very easily, especially in this digital age. Management of stores may also be more challenging with so many of them to look after. What do the financials tell us? Revenue Revenue has been increasing Year-On-Year since 2015 which peaked at 223m in 2018. This growing revenue is a positive sign, and could be due to the opening of new outlets across the island. Revenue is nicely split between Outlet & mall management business and F&B retail business. However it is the outlet & mall management portion that experienced increases in revenue over the years, whereas F&B portion has been on a decline. Profit Before Tax Profit before tax margins had actually decreased from 2017. This is actually due to falling profitability for the F&B segment. If you actually compare the charts, you will notice that despite revenue for the F&B segment remaining relatively similar, profit before tax has actually been decreasing. Gearing Ratio With a low gearing ratio of only 0.05, this means that the business does not hold much debt. This is positive because it means that the company pays little interest expense. Also, cashflow generated from operations can be used to grow the business rather than pay off your loans. This reduces the credit risk of the company. Debt / Equity Ratio With a D/E ratio of 0.74, this means that the business is funded more than equity rather than by debt. With this number decreasing over time, this suggest the business could be relying less on debt.
  • Asked by Isaac Chan

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Mar)

    241 Answers, 514 Upvotes
    Answered 3h ago
    TL;DR Haw Par has a very stable and mature business with a rich history. Financially they look quite stable, and see well diversified across different geographical regions. What is their Business Profile? When we think of “Haw Par”, we think of Haw Par Villa. But we should also think of Tiger Balm, because this is the company that produces it. Born in the 19th century, the business was started with Aw Boon Haw (the Tiger) and his brother, Aw Boon Par (the Leopard) in the British colonial days. The recipe of tiger balm was created after the brothers perfected the recipe passed from their father. Fast forward a 100 years till today, and the business has a market cap of $3bn and operates all over the world. What are some strong points about their business? Strong Business Model Growing revenue and profitability are very good signs that demand for the products are growing. I also believe that the Haw Par brand name is very strong, and so the business as a whole carries a strong brand equity. Also, the business model seems quite defensible, and Haw Par is likely able to maintain its market position and grow further in time to come. Geographical Diversification The business also seems diversified in the sense that revenue flows proportionately from different regions. This reduces the risk from revenue being affected too much if one region is particularly affected. What do their financials tell us about the business? Revenue Revenue has increased consistently over the years, at quite a good rate. Revenue increase for last year was $237m, an almost 7% increase from the previous year. The highest contributing sector for profits are investments, followed by healthcare. Net Profit Net profit has also grown tremendously over the past FY, with an increase of almost 50% to 180m. This led to an Earning Per Share of 81.2 Cents, much higher than 55.7 cents of the previous FY. Return on Equity With a Return on Equity (ROE) of 6.1%, this means that for every one dollar of equity, 6 cents of profits are generated. ROE has been actually increasing over the past few years. Debt/Equity With a Debt/Equity of 0.8%, this shows how little leverage the business has. This means that the company holds very little debt as compared to equity. This is a good sign, since it could mean more debt can be taken on to fund future operations as well as cheaper costs of financing. Moreover, it also means that the company has less debt to pay off in the future, which means lesser risk for shareholders but it could also mean more cash could be paid out in dividends.
  • Asked by Anonymous

    Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Mar)

    618 Answers, 1021 Upvotes
    Answered 3h ago
    The 51 years old man have money...she try to get his money ba...
  • Asked by Anonymous

    Billy Ko
    Billy Ko, President - Investment Club at Singapore Institute Of Technology
    37 Answers, 80 Upvotes
    Answered 3m ago
    SPY is the code for SPDR S&P 500 whereby it tracks the S&P 500 and is offered by SPDR. Put = Sell, Call = Buy. Okay, I ain't no experts at Options. You could possibly read up on how options works but the underlying theory is to provide you the ability to exercise the option of possibly buying or selling the stock at a particular price. You may read up more about options here -- https://www.fool.com/investing/options/options-the-basics.aspx Or await a Options guru to provide more insights.
  • Asked by Melvin Tan

    Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Mar)

    618 Answers, 1021 Upvotes
    Answered 4h ago
    Cannot auto sync cos need to go through bank security protocols for safety and secrutity. Banks require login, and have timeout feature if idle.
  • If you are working in Singapore, you probably need to pay tax. It is now being avidly discussed in our community where most people are scrambling to get things together. Read this cheat sheet now to get the essentials hacks. Any thing we left out?

    Your Cheat Sheet: Personal Income Tax In Singapore YA 2019

    We designed this to be a really simple and essential guide for you to know what is most important for you when coming to filing your personal income tax for your year. Plus tips and tricks on the areas where you can actually save on your taxable income.

    blog.seedly.sg

    18 Apr 19
    Comments (3)
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    View 1 more comments
    Gabriel Tham
    5h ago
    Why no auto-filing ?
    • Edit
    • Delete
    Tee-Ming Chew
    1h ago
    We will have it next year :P
    • Edit
    • Delete
  • Asked by Anonymous

    Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Mar)

    618 Answers, 1021 Upvotes
    Answered 3h ago
    Money market fund i think....
  • Asked by Isaac Chan

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Mar)

    241 Answers, 514 Upvotes
    Answered 6h ago
    TL;DR Revenue and net profit don’t look very rosy for Creative. There is also risk in that most of their revenue comes from the same kinds of products. A competitive environment also doesn’t help. What is Creative’s business? Creative Technology plays on the global stage, but is actually a Singapore born company. With the HQ here, they also have offices in Shanghai and Silicon Valley among others. Most of their products are sound and video consumer electronics which to my personal experience, are quite high quality. They started off with humble beginnings, and the story of how they won Apple in a $100m lawsuit is a good read. Growth Prospects Competitive Market Place With decreasing sales and weak cashflows, I don’t expect the company to do very well in the future. The market is also looking very competitive, with many different players competing with the same market share. As I elucidate below, I don’t think more consumers will buy more consumer electronics over time. Concentration Risk Creative faces this risk because almost all its revenue comes from the same kind of product. This means that in the event of a downturn in this market, Creative will be affected very heavily. Of course the upside is that if the products are very popular, Creative will do very well but this is not the case. This lack of diversification in what Creative sells is also probably why revenue has dropped over time. Diversified Across Regions Thankfully, Creative seems well diversified across the globe, with sales from different regions. This reduces the risk of earnings being too heavily affected if one region does not do well. What do their financials tell us? Income Statement Revenue has actually decreased consistently over the years from FY16 onwards. This is quite a worrying sign. The consumer electronics space have become increasingly competitive with offerings from boutique competitors that offer a wide array of high quality products as well. I believe that smart phones now also provide better ear pieces, so fewer consumers will buy ear phones outside. Despite decreasing revenue, R&D and selling and admin expenses have not decreased with it, which led to decreasing profitability over the years. Even though Net Profit is actually positive, this was actually due to a gain from a litigation settlement with an equipment vendor to recover damages for a wireless broadband project. I believe that this should be seen as a one-off event, such that without this lawsuit, net profit would still be negative, which is quite a bad sign. Balance Sheet With a current ratio of more than 5, Creative’s short-term liquidity is very strong. This means that the company can meet short-term financial obligations very well. In fact, most of the company’s current assets as in Cash. But with this large amount of cash pile, the company should have spent it on other strategic initiatives to grow the business. The company does not seem to hold much debt as well, as seen by how debt and interest expenses don’t even appear on the financial statements. Cashflow Like net profit, cashflow from operating activities was positive due to the law suit. Without this, cashflow here would be negative too, just like the previous year. The way the business operates is working capital (inventory, receivables, payables etc) also doe not generate more cash flow. Cashflow from investing activities seems to be propped up by the sales and purchases of financial assets. There was also lesser purchase of property and equipment, probably reflecting the decrease in orders of the company.
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