Neo Group

Is there no end to its acquisition activities?

Proposed Acquisition of ER Marketing (S) Pte. Ltd. and Ever Rich Pte. Ltd.

http://infopub.sgx.com/FileOpen/Proposed...eID=471382

An acquisition or so every year, but profitability, cash flow, and dividends show no growth. Debts? Yes, plenty of growth there.

Net Profit

FY10: $2.2m
FY11: $2.8m
FY12: $5.4m (IPO)
FY13: $3m
FY14: $6.4m
FY15: $7.4m
FY16: $6.1m
FY17: $3.3m

FCF: Positive only twice in 9 year history

FY10: -$2.4m
FY11: $0.1m
FY12: -$2.7m
FY12: -$3m (IPO)
FY13: $2.7m
FY14: -$7.4m
FY15: -$1m
FY16: -$3.8m
FY17: -$17.1m

Dividends

FY13: $1.2m
FY14: $3.1m
FY15: $1.52m
FY16: $1.45m
FY17: $1.45m

Gearing ratio: IPO proceeds helped to pay down debts, but it grew again thereafter.

FY10: 48.9%
FY11: 49.7%
FY12: 53.7% (IPO)
FY13: 1.1%
FY14: 38.3%
FY15: 56%
FY16: 177%
FY17: 191%

It seems that management is more interested in growing into a food conglomerate with businesses in different parts of the supply chain, but that are mostly unrelated to each other. There is little in synergy and benefit to the overall group performance. Taking on so much debt to fund to expand and fund acquisitions which have yet to yield anything. Why should it be selling at a p/e of 30?

Karlmarx, thanks for your consistent commentaries on various company news and results in your watchlist. They resonate with me most of the time.

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(27-09-2017, 06:36 AM)holymage Wrote: Karlmarx, thanks for your consistent commentaries on various company news and results in your watchlist. They resonate with me most of the time.

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Mostly I am just stating the obvious.

But really, I have benefited much more than I can contribute in this forum. And truly, I am more than grateful for the generosity of the regulars in VB.

Proposed Acquisition of Jil & Yellowtail Pte. Ltd. and Li Xin (1968) @ ION Pte. Ltd.

Neo Group Limited announced that the Company has today entered into an exclusive negotiation agreement with Jil & Yellowtail Pte. Ltd. ("Jil"), Li Xin (1968) @ION Pte. Ltd. ("Li Xin"), Lim Swee Meng and Ng Hui Hui Rebecca (the “Potential Vendors”), in relation to the proposed acquisition of shares in Jil and Li Xin.

Under the Agreement, the Potential Vendors, Jil and Li Xin have agreed to, inter alia, provide the Company with an exclusive period from today to 30 June 2018 (or such other date as the parties may mutually agree in writing) for negotiations relating to the Proposed Acquisition.

Jil is primarily involved in the manufacturing of products such as fish balls, fishcakes, fish dumplings, fried pork lard and sambal chilli. Its products are mainly supplied and sold to Li Xin retail outlets in Singapore.

Li Xin is primarily involved in the sale of Teochew fish ball noodles in food courts and coffee shops.

Did they not buy Thongseik which is a fish ball manufacturer?

Is the Li Xin chain of fishball stores really that attractive that they are compelled to buy it together with its upstream fish ball manufacturer?

Frightening.

Either Neo wants to be the king of fishball or lixin fishball must be really special. Keep funding expansion thru debts is scary.

Indeed, it seems like neo group is motivated by inorganic growth but is unable to synergise effectively. This enables me to appreciate F&Bs that does their internal "R&D", which I (used to) don't think much of and took for granted.

Also, there is an interesting finding in the Q2 2018 report. Refer to section 13, interested person transactions. Neo group rented a yacht from Twinkle Investment Pte Ltd owned by the CEO. You can draw your own conclusions from this. Hmm...

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(22-11-2017, 08:00 PM)karlmarx Wrote: Did they not buy Thongseik which is a fish ball manufacturer?

Is the Li Xin chain of fishball stores really that attractive that they are compelled to buy it together with its upstream fish ball manufacturer?

Frightening.

Yes, 55% of Thong Siek

I believe these proposed acquisitions are still ongoing:
Asia Farm F&B
Lavish Dine Catering Pte Ltd
ER Marketing (S) Pte Ltd
Ever Rich Pte Ltd

They also wanted to acquire Park Food Manufacturing Pte Ltd but was terminated.

Another addition to the NEO food empire.

SINGAPORE, 16 April 2018 – Neo Group Limited ("Neo Group", 梁苑集团有限公司, or together with its
subsidiaries, the "Group”) strikes its maiden acquisition in 2018 with Lavish Dine Catering Pte Ltd (“Lavish”). The
earnings accretive acquisition amounting approximately S$1.8 million will see Neo Group taking a 51.0% stake in
Lavish while existing owners will retain the remaining 49.0%.

http://infopub.sgx.com/FileOpen/Proposed...eID=499342

http://infopub.sgx.com/FileOpen/Press%20...eID=499343