Popular Holdings

[lonewolf]

hi lonewolf, did you also buy shares from the open market? it seems quite hard to average down from 36 cents to 13 cents per share just from rights subscription...

No I did not.

Did I forget to mention there was a 1-for-2 bonus in 2001

I was allocated excess rights shares for both rights issue. So that probably account for the 'averaging down' effect. If you just subscribe for your allotment without excess, maybe the averaging down will be less.

Lets do the maths. Say you got 1,000 at IPO 36c. (Let's ignore transaction cost)

1-for-2 bonus: 1,500 shares now average 24c ($360/1500)

1st right issue: 1-for-2 at 10c. So now shares cost $435/2250=19c

2nd rights issue: 3-for-10 at 13c. So now shares cost $522.75/2,925 = 17.87c

So assuming all you just do is subscribe your allocatment at the rights issue, you will still be 11% up. (from last Friday closing price of 19.9c)

If you have done nothing and not participated in both rights issue, your shares will be 24c and you will be 17% down. (from last Friday closing price of 19.9c)

So bro kopikat has put it most elegantly: If you choose not to participate in the rights issue and the biz recover, then too bad for you.

[KopiKat]

So, loyal Popular Hldgs shareholders would have by now seen their share price doubled from it's lows of ~10ct in Jan-09(?). I wasn't vested then, so, I'd not bothered to do any computation but I think those who'd held and subscribed for the 2 rights ought to be having a profit by now.

I did a quick check using the latest closing price @ $0.199. The 2 rights issues,

Feb-10 : 3-for-10 @ $0.13
Jan-09 : 1-for-2 @ $0.10

If I were to work backward and exclude all dividends paid, the breakeven would be,

1. Before Feb-10 Rights = 22ct
2. Before Jan-09 Rights = 28ct

Looking at Old Man's transaction data, between Jan-09 and Feb-10 ie after 1st Rights and before 2nd Rights, he was selling at $0.1706 - $0.2004. So, if one had bought during this period, they'd be currently be profitable (breakeven if max is 22ct).

Prior to Jan-09, Old Man was buying at $0.255 - $0.29. So, if one had bought during this period, they'd have a high chance to be having some profits at current prices (unless they'd buy at above $0.28).

One intersting observation is if one were to follow Old Man, one may actually not make money (prior to the 1st rights if buy above 28ct) or would have lost out on making money (if they'd follow him to sell after the 1st Rights Issue). Further, after the 2nd Rights, he was selling at $0.155 - $0.171 (vs current $0.199).

So, be careful not to blindly follow Old Man now (to buy) as his track record doesn't seem very good.. Hee..

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wow i didnt know popular ipo dated back to 1997. i got mine around 10cent in late 2008...

Congrats! You have a 2-bagger!

But, I'll be a wet blanket by asking these questions (which I usually ask myself),

1. Did you buy a meaningful amount? (eg. 10% of portfolio) If not, why not?

2. Why did you stop buying at 10ct? Why not add to your holdings as their Balance Sheet got stronger even at higher prices?

I had a similar experience as you for Thomson Medical with my first buy @ $0.18 - $0.20. I was unable to bring myself subsequently when prices slowly moved up. Fortunately for me, I managed to overcome my mental block (unwilling to buy at a higher price) and started to buy again from 40ct+ onwards, purely based on looking at their most current financials each time.

Note : I'm not asking anyone to buy Popular Hldgs shares at current prices but rather, to be able to continue make buy/sell decisions objectively using the latest financials (for any stock).

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I went to Prologue @ Ion Orchard today to enjoy my members' 25% discount (20% for non-members). I must say the crowd is quite good. If only they could bring in this kind of crowd everyday...

My suggestion to Old Man : Continue to offer such discounts even after this one-month promotions. Turn it into a Factory Outlet kind of concept ie. Good Discounts - Go for Volume at Lower Profit Margins (as long as there's a Net Profit). They can even negotiate for lower rentals as they'll be able to bring in the crowd which may spill over to the other tenants - don't think many will be able to afford to patronise the other shops tho' as many are hi-end biz

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Deleted : Comments on the post by 'money' as I'd made some wrong assumptions and didn't account for the Bonus Issue which'd been subsequently clarified by the latest post by 'lonewolf'

[corydorus]

I sold Popular stocks at different stages on the price up despite is still quite attractive at current price. What i have learned is to slow down my sell pace. Other than that, taking profit is seldom wrong.

[dydx]

Chairman Chou has continued to increase his interest in Popular by buying from the open-market rather aggressively. On 23May, through his private holding company World Holdings (Pte) Ltd, he added another 3,098 lots and paid an average price of $0.191/share.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument

Rationally speaking, a well-established and consistently profitable business group like Popular should have an intrinsic value at least at a decent premium above its NAV - the latest (as at 31Jan12) being $0.2473/share.....
http://info.sgx.com/webcoranncatth.nsf/V...C003C346C/$file/SGXNet_Announcement_31_Jan_2012_Final.pdf?openelement

With FY12 (ended 30Apr12) full-year results due by 30Jun12 together with the usual Final dividend (last FY11:$0.006/share), I guess Mr Market my be motivated to re-rate Popular higher.

[corydorus]

Currently i see deep discount to NAV when a business involves in Property development. Popular being partial has it but smaller i believe.

[money]

hi lonewolf, did you also buy shares from the open market? it seems quite hard to average down from 36 cents to 13 cents per share just from rights subscription...

No I did not.

Did I forget to mention there was a 1-for-2 bonus in 2001

I was allocated excess rights shares for both rights issue. So that probably account for the 'averaging down' effect. If you just subscribe for your allotment without excess, maybe the averaging down will be less.

Lets do the maths. Say you got 1,000 at IPO 36c. (Let's ignore transaction cost)

1-for-2 bonus: 1,500 shares now average 24c ($360/1500)

1st right issue: 1-for-2 at 10c. So now shares cost $435/2250=19c

2nd rights issue: 3-for-10 at 13c. So now shares cost $522.75/2,925 = 17.87c

So assuming all you just do is subscribe your allocatment at the rights issue, you will still be 11% up. (from last Friday closing price of 19.9c)

If you have done nothing and not participated in both rights issue, your shares will be 24c and you will be 17% down. (from last Friday closing price of 19.9c)

So bro kopikat has put it most elegantly: If you choose not to participate in the rights issue and the biz recover, then too bad for you.

hi wolf, thanks so much for the detailed explananation. I guess it also takes much courage to subscribe for excess rights during the depth of the financial crisis

[touzi]

I visited 2 Popular stores today. The one in AMK Jubilee Square has downsized significantly from about a few years ago. It used to sell all kinds of computer accessories and novels. Now it is mainly school books. In terms of floor space it looks like a 30-40% reduction.

The second shop I visited is at Junction 8. I am not too sure, but I think it has scaled down as well. At least the entrance used to be much bigger and I cannot find any travel related books this time.

Has Popular changed its strategy for its suburban branches?

[KopiKat]

New support @ $0.199 for 357,000 shares on 28-May-12.

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I visited 2 Popular stores today. The one in AMK Jubilee Square has downsized significantly from about a few years ago. It used to sell all kinds of computer accessories and novels. Now it is mainly school books. In terms of floor space it looks like a 30-40% reduction.

The second shop I visited is at Junction 8. I am not too sure, but I think it has scaled down as well. At least the entrance used to be much bigger and I cannot find any travel related books this time.

Has Popular changed its strategy for its suburban branches?

I don't think they'd changed their strategy. Rather, I think they'd always been dynamic enough to adapt to market situation. I remembered a few years back, they opened a mega store (occupting 3 floors) at the then just opened building next to Lot 1 (CCK). After a couple of years, when the initial huge crowd dwindled, they closed down that place. At the same time, they also had an exiting store at Lot 1, which they continued to operate. IIRC, it shifted at least once within the same mall (I think they upsized it after they closed down the mega store next door).

But then again, I'm vested, so, I may be unwittingly only observing these as positives...

[KopiKat]

I was at Prologue @ Ion Orchard yesterday. Some koyok comments,

1) Storewide 25% discount (20% for non-members) ends on 24-Jun (Sun)
2) They have stopped issuing 1-for-1 Epilogue vouchers but exisiting vouchers are still valid

I have the following comments on Epilogue (Cafe),
- Staffed by 4 youngsters (at my age everyone looks young)
- ~14 Tables (2 to 6 seaters), capacity ~ 50
- Food is ok and well presented
- Less than half full even though Lunch time
- Service is very slow (3-4 tables ordered aro' same time for 10-15 sets)
I think they ought to convert it into a cafe that provides ready snacks such as pastries and cakes + coffee / tea or they need to improve on their speed substantially.

3) I got Gift Vouchers for Prologue + Epilogue @ Orchard Central instead of the Epilogue ones for my new purchases.

The key observation is they must have converted the existing premises at Orchard Central (used to be UrbanWrite selling stationery) for their 2nd Prologue cum Epilogue store. Their voucher cum flyer says 'The First Stop for New Releases', so it looks like the niche will be for newly released books. Opens on 29-Jun, will pop in sometime in Jul to check it out.

* Sell Koyok Time *

Discount better than the regular Jun/Dec 20% off for members. Some more no need for cut-out voucher. Trying hard to attract customers to Prologue / Closing down sale?

My sister (also vested as she followed me) was the one who alerted me to the sale. Some info,

1. You'd need to spend $52 so that it's $38 after discount (25% for members) in order to have the 1-for-1 offer at Epilogue. $13 for a meatball pasta (quite pricey if you compare with Food Court prices but I guess quite ok if 1-for-1).

2. Discount (25% for members) also valid for Music CD and DVD. Usually at CD-Rama (within Popular bookstores), I think only 5% discount for members.

I'll check it our over the weekends and perhaps stock up on some of my kids' school stuff + Music CD (if really 25% off).

* End of Koyok Selling *

[kazukirai]

Time to play devil's advocate (even though I'm vested).

I see the book 'Search Inside Yourself' by Chade-Meng Tan selling for $19.47 after discount. At the current US/SGD exchange rate, that's like US$15 and some.

I bought my copy (kindle ebook) for US$13.99. And today there's the news about NLB loaning out ebook readers.

I don't think Popular's going to make much money from this part (selling new and popular titles) of the business. Let's all hope that Singaporean and Asian parents remain kiasu!