Epicentre Holdings

The just released FY10 (ended 30Jun10) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...c00296961/$FILE/SAR1008011_Epicentre%20AR%20(low).pdf

With a trading track record of over 8 years and a total of 9 stores now - 6 in Singapore, and 3 in Malaysia - I suppose we can say Epicentre's business is already quite well-established. Their plan to expand into PRC retailing Apple products there, as indicated in Jimmy Fong's Chairman Statement, is obviously something to take note of.

FY10's EPS came to a very decent $0.036, based on the only 93.502m issued shares. Equity has increased to $17.76m as at year-end 30Jun10, giving a decent NAV/share of $0.19. A look at Epicentre's strong B/S and large cash reserve will confirm that the business has been operating on a self-financing basis - i.e. with normal trade credit from suppliers fully funding the critical (and well-managed!) inventory holding necessary to support this fast-moving retail business. Of course, the super popularity of Apple products makes all these possible.

A Final dividend of $0.02/share has been declared, and I am looking forward to see it in my bank account on 23Nov10.

From the lastest "Top 20 Shareholders" listing (p82 of AR), I noted local billionaire Peter Lim (Eng Hock) having a 5.31% interest in Epicentre, being held by Rowsley Ltd which he supposedly controls. So even Peter Lim likes Apple products and Epicentre - similar to Loo Leong Thye of Challenger Technologies (now also selling some Apple products as an appointed Apple reseller), which holds a 1.6% interest in Epicentre.

Indeed, we are seeing Apple products everywhere!

will look into it. cheers for the lobang.

(14-10-2010, 06:47 PM)dydx Wrote: The just released FY10 (ended 30Jun10) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...c00296961/$FILE/SAR1008011_Epicentre%20AR%20(low).pdf

With a trading track record of over 8 years and a total of 9 stores now - 6 in Singapore, and 3 in Malaysia - I suppose we can say Epicentre's business is already quite well-established. Their plan to expand into PRC retailing Apple products there, as indicated in Jimmy Fong's Chairman Statement, is obviously something to take note of.

FY10's EPS came to a very decent $0.036, based on the only 93.502m issued shares. Equity has increased to $17.76m as at year-end 30Jun10, giving a decent NAV/share of $0.19. A look at Epicentre's strong B/S and large cash reserve will confirm that the business has been operating on a self-financing basis - i.e. with normal trade credit from suppliers fully funding the critical (and well-managed!) inventory holding necessary to support this fast-moving retail business. Of course, the super popularity of Apple products makes all these possible.

A Final dividend of $0.02/share has been declared, and I am looking forward to see it in my bank account on 23Nov10.

From the lastest "Top 20 Shareholders" listing (p82 of AR), I noted local billionaire Peter Lim (Eng Hock) having a 5.31% interest in Epicentre, being held by Rowsley Ltd which he supposedly controls. So even Peter Lim likes Apple products and Epicentre - similar to Loo Leong Thye of Challenger Technologies (now also selling some Apple products as an appointed Apple reseller), which holds a 1.6% interest in Epicentre.

Indeed, we are seeing Apple products everywhere!

Hi dydx,

just to share, i went to the istudio shop at terminal 3 transit area and found out that it is possibly one of the cheapest place in the world to get an ipad! enquire from the staff there n bascially istudio has the whole monoply to themselves at changi airport as the only apple reseller. no further enquiry abt the rental there but its a no brainer that it should come with a hefty sum. maybe thats why epicenter has avoided tendering for the shop space (just my guess) but it'll probably be a good exposure to the international travellers transiting through one of the busiest airports in Asia.

cheers,
bongster31

(20-10-2010, 11:17 PM)bongster31 Wrote: just to share, i went to the istudio shop at terminal 3 transit area and found out that it is possibly one of the cheapest place in the world to get an ipad! enquire from the staff there n bascially istudio has the whole monoply to themselves at changi airport as the only apple reseller. no further enquiry abt the rental there but its a no brainer that it should come with a hefty sum. maybe thats why epicenter has avoided tendering for the shop space (just my guess) but it'll probably be a good exposure to the international travellers transiting through one of the busiest airports in Asia.

As Apple sets fixed retail prices for its products - which are linked to the official retail prices Apple sells in the U.S. (including dierct sales via its online store) - in different markets, I am a surprised that istudio (a member of the 'rojak' Elush Retail Group, which also operates a few Nike stores and F&B outlets in Singapore) is able to offer discounted prices in its Changi Airport outlet.

While there is indeed a flow of travellers traffic inside the transit area of Changi Airport, I am not sure if many people will naturally choose to buy their gadgets from a store in the transit area inside an airport. There are obvious disadvantages here.

Without doubt, CAAS is charging high rents in Changi, including a variable portion on a certain percentage of the sales of the ratailers operating in the airport.

But high rent itself should not deter a smart and expeienced retailor of fast-moving popular products (like Apple's iPhones, iPads, etc.) to open a store in a very good location - e.g. the Epicentre store at the ground floor of 313 Orchard - as the huge human traffic that passes through the location everyday will quite naturally transform into the required volume sales to pay for the rent and other operating expenses and allow the operator to make a profit.

(21-10-2010, 08:54 AM)dydx Wrote: As Apple sets fixed retail prices for its products - which are linked to the official retail prices Apple sells in the U.S. (including dierct sales via its online store) - in different markets, I am a surprised that istudio (a member of the 'rojak' Elush Retail Group, which also operates a few Nike stores and F&B outlets in Singapore) is able to offer discounted prices in its Changi Airport outlet.

Even without retailer's discount, consumers effectively pay lesser because they don't have to pay GST. I have seen many happy customers there.

i am surprised Epicentre decided not to open a store @ Changi. Taking ABR Holding's Cocoa Trees stores as a rough proxy, their latest 2H10 results showed a good increase in revenue and profits from their chocolates segment. The statements did not provide a breakdown, but I think it is likely a significant amount derives from the increase in visitors.

from what i can gather, Apple fixes retail prices and provides the same level of aftersales service across all Apple Premium Resellers (APR) in SG (3 big ones - Epicenter, Nubox and iStudio). Most "techies" or savvy buyers obtain their products from Apply online, as they offer rebates and free delivery. There is little differentiating the APRs, except that Epicenter offers training sessions.

interestingly, Epicentre's financial results only picked up in the latest half-year, and a friend suggested it could be due to iPad sales, which are only available to APRs (as opposed to normal resellers like Challenger or other IT retail outlets).

considering the facts, my view is that whichever APR is more visible and provides a stronger branding/marketing "wins" since there isn't anything much that differentiates them. From Apple's website, it seems Nubox is focusing on the heartlands (1 outlet in North, West, East and 2 in Central) while Epicentre and iStudio concentrates themselves in central locations.

one of my worry is Epicentre's expansion plans into China. another blogger has also commented that this would mean Epicentre will go up against Cybermart (retail arm of Hon Hai)

Retail business is not an attractive business to be in. The rent and overheads is enough to kill off most businesses.
What is left in the prime locations are strong franchise with strong product offering.
Epi Center is now doing relatively well due to the overwhelming success of apple.
The margins for apple products are very low(made up by large volume). The product would sell itself with or
without any marketing effort by Epi or any other reseller.

While credit must be given to Epi for delivering good results, a large part of it is attributed to them choosing the right product to sell.
It is somewhat like companies from all types from different industries jumping into the property market, they did well due to the rising tide.(or rising property prices rather).

Apple is hugely popular now. They might end up being victims of their own success. Where do they go from here?
Maybe they will invade our living rooms(no success yet with TV) or even our kitchens or cars.....

Not usually into retail counters but walking past their stores set me wondering. (I am not a Apple customer and have resolutely refused to buy an iPhone despite of repeated prodding of those who use Whatsapp!)

Looking at their results, those who had held the counter earlier this year have basically doubled in the last 3 months and some of the directors have sold.

As far as I can tell, there is no debt, or other instruments, and the net cash position is strong.

This business easy to enter and there are some competitors but I think they have the brand name to sustain their growth. Maybe as a lay person but I think Apple product margins much higher than normal PC distributors?

Apple products are pretty much fixed prices, even their accessories. Only advantages they can possibly hold over their competitors are better product knowledge, since they have been a long-time seller of apple products, better economies of scale (wrt to storage of goods, mass shipping costs, etc). Whereas PC products tend to have wider range of resellers + greater variety of product ranges, resulting in competitive pricings.

the margins on Apple products are razor thin, so volume is key. they make far better margins selling the accessories