Challenger Technologies

(08-08-2014, 02:24 PM)InvestArk Wrote: Margins went up due to better product mix(valore) however was offset by closure of the Malaysia business (loss 1.3mil). This 1.3million should be a one off item for 1H2014 since management mentioned that they have fully exited the Msia sector. Ceteris paribus , PBT should be at the 9million region for 1h2014 despite lower revenue registered. Expenses are well managed. Catalyst includes new lease in the upcoming seletar mall while interim dividend has been maintained at 1.1 cents.

Good analysis!

Yes, need to see next 2Qs performance!

The implication of exiting M'sia means they probably have a problem expanding overseas i.e. they are stuck with the Singapore market. They already have shops in many parts of Singapore, how much more can they increase their sales in Singapore?

went to funan centre today to grab some msd-cards, challenger having road-shows at the level 1 atrium...
cashier's queue is ka-chinging all the way!

went up to level 6, surprised it's quite full and again, have to queue up for cashier... ka-chinging!
Maybe it's just a weekend thingy!

Mmmm!

(10-08-2014, 09:36 PM)brattzz Wrote: went to funan centre today to grab some msd-cards, challenger having road-shows at the level 1 atrium...
cashier's queue is ka-chinging all the way!

went up to level 6, surprised it's quite full and again, have to queue up for cashier... ka-chinging!
Maybe it's just a weekend thingy!

Mmmm!

I am still a believer in Challenger brand for IT product.

I am yet to dig into the report, will put up my view on its new venture...

(vested)

(10-08-2014, 03:51 PM)riverfish Wrote: The implication of exiting M'sia means they probably have a problem expanding overseas i.e. they are stuck with the Singapore market. They already have shops in many parts of Singapore, how much more can they increase their sales in Singapore?

Thus the management are changing their product mix, to increase profit margins instead of growing revenue. The 1h2014 results has evidenced effect of the valore product mix with gpm up to 20%(18% previously).

However with the exit from its Msia operation, the growth story is pretty much muted (making it more like a dividend counter instead of a growth one) limiting it just to the local scene. Valuations might readjust as well to reflect this.

A summary of view on the company recent 1H2014 result

- Gross Profit Margin (GPM) increased from a low of 18-19% in the last few years, and back to 21-22% in last few quarters. Valore strategy helps to reverse the GPM downtrend in the last few years
- Net Profit Margin (NPM) decreased in 1HFY2014 YOY. The main reason was the increased in rental expenses of new stores, and on-time charges to close M'sia operation.
- Revenue reduced by -13%, which is expected and transitional, with closure of M'sia operation and the stores in Singapore are mostly newly opened. We should observe for at least two quarters to know the effectiveness of Valore strategy.
- The dividend payout should remains the same, with the company cash reserve.
- Balance sheet remains healthy, with zero debt, and large cash reserve.
- Asset turnover remains the same, at about 3.5x

There is always a question on Singapore market saturation for the company. Popular is the closest, which is having the similar strategy as the company. It is having more than 60 stores in Singapore. The company existing store count is 44 in Singapore, which 4 of them is newly opened.

One of the Valore strategy is to oversea expansion via Valore concept store, both as retailer and distributor. Let's see the result in the next few quarters.

(vested, and will remain vested at least in near term)

(10-08-2014, 09:36 PM)brattzz Wrote: went to funan centre today to grab some msd-cards, challenger having road-shows at the level 1 atrium...
cashier's queue is ka-chinging all the way!

went up to level 6, surprised it's quite full and again, have to queue up for cashier... ka-chinging!
Maybe it's just a weekend thingy!

Mmmm!

I was there on Fri evening. Seems very quiet. The sales people chatting haha. Maybe they should just operate on weekend?

I was there on a weekday lunch time, quite empty but heard two customers asking for bulk purchase quotation...not sure if materialize

I'm a little bit concerned that the CEO, Loo Leong Thye, is earning between $1,000,000 to $1,249,999 compared to the full year profits of 17m.

Courts CEO is making 1.4million against a 28m net profit in FY2014, and it was a bad year given Courts net profit of c. 40m in FY2013 and FY2012.

(13-08-2014, 03:41 PM)madagnet Wrote: I'm a little bit concerned that the CEO, Loo Leong Thye, is earning between $1,000,000 to $1,249,999 compared to the full year profits of 17m.

Courts CEO is making 1.4million against a 28m net profit in FY2014, and it was a bad year given Courts net profit of c. 40m in FY2013 and FY2012.

IMO, the CEO remuneration seems fair to me.

You may already aware, the CEO remuneration breakdown in FY2013, was 32% (fixed) and 63% (variable, and performance-base), the rest were allowances and director fee. A major part of the remuneration package that linked to company performance (group profit) seems a fair deal to me.

FYI, the service agreement with the CEO, has been the same since the company went IPO

May be the concern is on relative term to Court's CEO remuneration. FYI, Challenger's ROE in FY2013 was about 28%, while Court's ROE in the same period was 9%. Challenger achieved it without debt, while Court's with tons of debt.

(vested, thus may be biased)