Super Group

Its their usual practice. Not very sure of the rationale though.

3Q result is out. Revenue down 3% while profit down 46%.

(10-11-2014, 01:36 PM)Bubbachuck Wrote: 3Q result is out. Revenue down 3% while profit down 46%.

Bad result. I did not expect that great a fall in net profit. I will need to look into the numbers and perhaps may need to revaluate this counter. FY14 has been very challenging for Super. Interesting to see how they recover in FY15. Good luck to all still vested.

Vested in small amounts.

They mentioned that the Botanical Herbal Extract line is ready for production. Let's see how they recover next year.

(Not vested)

Over heated liao... need herbal tea to cool off...

Operations Sam Goi way over liao...

Odd Lots Vested
GG

Gross margin down to 32% on higher COGs.

http://infopub.sgx.com/FileOpen/Super_Gr...eID=323554

Singapore, 10 November 2014 – Super Group Ltd, (“Super”, “the Group” or “超级集团有限公司”), the leading integrated instant food and beverage (“F&B”) brand owner with a regional footprint in Asia, delivered revenue of S$129.5m and net profit of S$10.5m for the three months ended 30 September 2014 (“3Q14”).
In the latest third quarter, the macro-economic environment continued to be challenging, marked by higher raw material costs, particularly that of palm kernel oil, as well as stiffer competition. Gross profit margin for 3Q14 stood at 32% down 5ppt, dragged by higher raw material costs and the higher composition of food ingredients sales which carry a lower gross profit margin.

(10-11-2014, 02:26 PM)Tiggerbee Wrote: Gross margin down to 32% on higher COGs.

http://infopub.sgx.com/FileOpen/Super_Gr...eID=323554

Singapore, 10 November 2014 – Super Group Ltd, (“Super”, “the Group” or “超级集团有限公司”), the leading integrated instant food and beverage (“F&B”) brand owner with a regional footprint in Asia, delivered revenue of S$129.5m and net profit of S$10.5m for the three months ended 30 September 2014 (“3Q14”).
In the latest third quarter, the macro-economic environment continued to be challenging, marked by higher raw material costs, particularly that of palm kernel oil, as well as stiffer competition. Gross profit margin for 3Q14 stood at 32% down 5ppt, dragged by higher raw material costs and the higher composition of food ingredients sales which carry a lower gross profit margin.

Super group has been doing badly this year. The profit attributable to shareholder has been reducing from 17.8 mil (Q1), to 15.0 mil (Q2), and the worst is Q3, only 10 mil.

What are the causes of the decline? Re-branding exercises? or raw material costs and regional currency fluctuations as claimed by the management?

(not vested, but monitoring)

Distribution expenses will continue to remain high due to intense competition with its peers. Gross margin will stay at 32% or even lower on higher COGS for several quarters, aggravated by the strength of the USD as commodity prices are priced in USD. Not to mention that regional currencies are feeling the heat from the strengthening USD.

Make no mistake... Super is super... no nestle...

Its the branding that truely matters... it doesn't matter if you are a major ingredient supplier as that simply means that it will be subjected to pricing pressure from major customers... a support industry player is not a branded product seller.

If they have managed to pull off a trade sale of their business when F&B companies are being sold away about 18 months ago, then it will be a different story.

Unfortunately, Super's growth if buddies perform their due d has been marked by one-offs.

Odd Lots Vested
GG

No doubt, Q3 results was terrible and shows Super struggle in the branded consumer segment. Super's Brand like "owl" is losing market share because the younger generation are not really into powdered coffee but instead are more interested in ready to drink coffee. This is where "owl" cafe should have step in to fill the gap but apparently Ya Kun and Toastbox (BreadTalk) has beaten "owl" to it.It is inevitable that Super will have to aggressively market/transform to continue its presence.

Even among the powdered coffee and Cereal products, Super is facing extremely tough competition especially when competitors like power root have been better in advertising, ask the younger generation on coffee powder, they (I) think of Ah Huat Coffee because of the "ridiculous" song and dance or Nescafe (Thanks a bit to George Clooney and the red Nescafe Mug). And in the cereal products, the health conscious young prefers quakers and Nestum.

Super has done poorly in the trait of brand awareness; unlike F&N, Nestle or Food Empire's product (in Central Asia). One solution will be to build from scratch brand awareness in a newly emerging market like Myanmar. One has to bear in mind, this will take years as the brand has to grow up with the members of society; like what Food empire did in Central Asia and Europe (Growing up and Marketing with celebrities). It takes years and advertising money to grow brand awareness. The second solution (easy and simple) will be to hire a top star to endorse its products like what Jeanette Aw did previously; this will impact bottom line. Putting your brand on an S-league jersey does not constitute to marketing ( someone pls inform Rotary Engineering on this).

Secondly, despite all the talks on Super's ROE being greater than 15% etc annually; it is important to note this is the first full year, where there is the lack of one-off gains to artificially inflate profits. This year FY results will fully demonstrate Super's performance in a cut throat industry with all its major segments (new and old) firing at all cylinders.

However, given all these, I may be tempted to purchase Super should it fall under 0.70. That is where adequate MOS is present even if it rakes in only 0.05 EPS annually. However, if Q4 results are worse than a 0.012 EPS, I may have to reconsider my revaluation