ValueMax Group

most of things being pawned are gold related.

I worked in pawnshop before, only sometimes some people pawn expensive watches, otherwise its mostly gold. The amount pawned depends is most often a fixed percentage of the items worth in gold weight. So you would have to expect that revenue corresponds to a large degree to gold price.

However it does mean that revenue has not grown at all in relative terms, assuming gold price was the same, revenue would be the same.

Share price should drop until the div. yield comes to about 4%

(04-07-2014, 05:00 PM)BlueKelah Wrote: most of things being pawned are gold related.

I worked in pawnshop before, only sometimes some people pawn expensive watches, otherwise its mostly gold. The amount pawned depends is most often a fixed percentage of the items worth in gold weight. So you would have to expect that revenue corresponds to a large degree to gold price.

However it does mean that revenue has not grown at all in relative terms, assuming gold price was the same, revenue would be the same.

Share price should drop until the div. yield comes to about 4%

When you say mostly gold, would north of 90% of the items be a rough ballpark figure?

And from their IPO I read that they use scrap prices as a baseline to calculate the valuation for their LTV for clients, in general at how much % above scrap prices would the valuation of the articles be worth? So how much of a discount would they be offering the clients from the full valuation of the gold article in general?

Another question is, say for example say today, gold is now priced around US$1.3k per oz, how much is the scrap value per oz?

Thanks
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

The company ventured into moneylender business. I wonder why the gross margin is 70% with 1% per month?

(not vested)

ValueMax maintained at ‘buy’ with 60 cents target price by OSK-DMG

OSK-DMG has maintained its “buy” call for pawnbroker ValueMax Group, with a higher target price of 60 cents from 56 cents previously.

In an update on Sept 24, OSK-DMG says ValueMax Group has already obtained a moneylender’s licence. This means it can now officially accept a wider range of collateral, especially properties. This business segment may be a new growth driver, with high margins of about +70%.

“Management has highlighted that it will charge interest rates of around 1% per month, lower than its usual pawnbroking rates but still expects to enjoy a rich gross margin of around +70%. In addition, properties would have a 60% loan-to-value (LTV), which means that only a maximum loan of 60% of the pledged property value can be obtained, leaving the company with an ample 40% buffer in the event of any default scenarios,” says OSK-DMG.

OSK-DMG now expects ValueMax to add conservative estimates of about $25 million and $30 million of loans from this new business segment in FY15 and FY16 respectively, which would boost OSK-DMG’s original net profit after tax (NPAT) estimates for the two years by 17% each.

“Going forward, we also expect potential strong EPS growth of 36.1% and 15.6% in FY15 and FY16 respectively, coupled with new pawnbroking outlets being opened in Malaysia and Singapore,” says the research house.

ValueMax is trading flat at 45 cents as at 4:50 p.m. Singapore time.
http://www.theedgesingapore.com/the-dail...k-dmg.html

Who would borrow from them at 1% a month for their property?

Woah are they going into a full blown money lending business! Pawning property now? LOL
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

(25-09-2014, 09:47 PM)egghead Wrote: Who would borrow from them at 1% a month for their property?

The choice after no choice.

That reflect the risk involved. Is the LTV ratio of 60% sufficient? Hmm.. may be...

(not vested)

Haha wondering how they would they collect the property if the guy "defaults"?

Not sure how long is their lease terms as well?
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

(29-09-2014, 03:41 PM)muns Wrote: Haha wondering how they would they collect the property if the guy "defaults"?

Not sure how long is their lease terms as well?
______________________________________________________
Finding the Value in a Speculative World
http://www.valueinvestasia.com

I reckon similar process as bank doing the property foreclosing.

Riskier business pawning property, not as liquid as gold and jewelery

via Xperia Z1 with Android 4.4.4 running tapatalk.

(29-09-2014, 04:33 PM)BlueKelah Wrote: Riskier business pawning property, not as liquid as gold and jewelery

how much is the pawn discount for property? 25% of the valuation?
auction off?