Super Group

FYI, analyst ratings and TPs on the company, after the recent financial report

Super Group cut to "sell" from "neutral", target cut to 90 cents by OSK-DMG
Super Group upgraded to "hold" by Maybank Kim Eng; target at $1.02
Super Group price target cut to 83 cents from $1.42 by CIMB

It seems about $1 is the "value" estimated by most analysts. I do agree with CY09 analyst on the company, and coincidentally almost similar TP as him. I am looking at $1.5 pre-bonus issue, or $0.75 post-bonus, as a starting point.

(not vested, but monitoring)

From a consumer's perspective, their products are in declining/dying stage. Unlike old time where people still lim kopi jiak loti at home, nowadays families tend to eat out during breakfast time, because of several reasons:

(i) many breakfast options available, from kopitiam to kaya toast shops to fast food chain
(ii) prices for breakfast outside is getting cheaper, eg. McDonald breakfast starts at 2 dollar plus, LongJohn's breakfast starts at 3 dollar plus
(iii) variety of home-based coffee machine available at cheap prices tempted consumers to turn into capsule-based coffee instead of instant mix
(iv) younger generation prefers healthier diet/better lifestyle which tend to avoid caffeine drinks and instant noodles

Separately, I think the "Super" brand is a bit old fashion, make me thought of Eng Wah cinema. Perhaps they should consider to re-brand it, change of name, change of logo, change to a fancier packaging and invest in media marketing.

Lastly, it will be interesting if Super could join Starbuck/CBTL to open its own "Super Cafe" which sells coffees, drinks and pastries.

[ not vested ]

(11-11-2014, 11:36 AM)valuebuddies Wrote: From a consumer's perspective, their products are in declining/dying stage. Unlike old time where people still lim kopi jiak loti at home, nowadays families tend to eat out during breakfast time, because of several reasons:

(i) many breakfast options available, from kopitiam to kaya toast shops to fast food chain
(ii) prices for breakfast outside is getting cheaper, eg. McDonald breakfast starts at 2 dollar plus, LongJohn's breakfast starts at 3 dollar plus
(iii) variety of home-based coffee machine available at cheap prices tempted consumers to turn into capsule-based coffee instead of instant mix
(iv) younger generation prefers healthier diet/better lifestyle which tend to avoid caffeine drinks and instant noodles

Separately, I think the "Super" brand is a bit old fashion, make me thought of Eng Wah cinema. Perhaps they should consider to re-brand it, change of name, change of logo, change to a fancier packaging and invest in media marketing.

Lastly, it will be interesting if Super could join Starbuck/CBTL to open its own "Super Cafe" which sells coffees, drinks and pastries.

[ not vested ]

Isn't there an Owl Cafe already ?

http://www.supergroupltd.com/wp-content/.../news1.pdf

(Not Vested)

Owl.cafe doesn't seem to be doing well...

(not vested)

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(11-11-2014, 12:16 PM)thor666 Wrote: Owl.cafe doesn't seem to be doing well...

(not vested)

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The one at Star Vista seems quite alright ..usually quite crowded when I pass by. A lot of people still pop by for coffee breaks since it's so near the MRT station.

I didn't even realised that there is such a thing called "Owl Cafe". Noticed from its website that they have 3 outlets and none of them at the North. With the change in the living style and trend, I believe that Owl Cafe can do better, how come they just have 3 outlets since inception in year 2012? Is it because of the lack of funding for investment in new store? Or because of the food quality or prices? Or simply because the name is not as stylo as "STARBUCK"?

(11-11-2014, 01:25 PM)valuebuddies Wrote: I didn't even realised that there is such a thing called "Owl Cafe". Noticed from its website that they have 3 outlets and none of them at the North. With the change in the living style and trend, I believe that Owl Cafe can do better, how come they just have 3 outlets since inception in year 2012? Is it because of the lack of funding for investment in new store? Or because of the food quality or prices? Or simply because the name is not as stylo as "STARBUCK"?

Labour and rental kill retail in Sg. Faster u expand faster u die.


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(11-11-2014, 11:36 AM)valuebuddies Wrote: Separately, I think the "Super" brand is a bit old fashion, make me thought of Eng Wah cinema. Perhaps they should consider to re-brand it, change of name, change of logo, change to a fancier packaging and invest in media marketing.

The company has done a rebranding exercise year ago, with new logo, packaging and marketing effort.

(not vested)

I just went there last week. The food is quite good actually and the price point is not too bad as well. Rather than starbucks, I think they are competing with Old Town/ Toastbox. My laksa was about $5 - $6.

       

I personally drink their standard 3 in 1 coffee @ home as the calorie count was one of the lowest and they are usually priced 10% - 20% cheaper than Nescafe/ Old Town. Old Town tastes better but is also sweeter and much higher in calories.

From what I can see, they cite the following for the squeeze on margins:
(a) higher raw material costs (such as palm kernal oil)
(b) stronger SGD against MYR/ THB
© higher selling and distribution costs due to new product launches in Thailand
(d) higher depreciation/ tax expense

They need a strategy to normalise volatility in raw material costs/ FX. They have managed their margins relatively well in the past few years (buoyed by once of gains) but I wonder if they can keep this up.

I am concerned on whether they have lost market share in their core markets (Sg, Myanmar, Thailand, Philippines, etc). They have blamed the relocation of their factory to Malaysia as a once-off factor in drop in sales in Singapore and other export countries but it seems that they have really dropped the market share in China.

What I do like is that they seem to have a strategy to grow/ expand further both segmentally and geographically. They are proactively managing their operating margins as well by investing in factories and trying to move down the value chain in certain products.

To me, it's interesting to see where they will go from here. I do want them to succeed because of all the research I have done and I like the Management a lot.

vested a tiny little bit

(11-11-2014, 03:23 PM)jim_city Wrote: I do want them to succeed because of all the research I have done and I like the Management a lot.

Sometimes it is not because all the research you have done you have to own the company. For me most of the cases are after all the research i have done, i want to avoid the company.

Few years back i did a quick look on this co management, just to discover the management is like 1 big merry family husband & wife, son & daughter, uncle & wife's brother. It might have changed now i am not sure. But no way i will like the management.