Khind – not an obvious investment opportunity

[i4value]

The problem social investing sites is that every one has the same information. As such I am not so sure it is easy to make money. That is why I prefer to take a contrarian view and hunt where the crowd avoids.



A good example is Khind. You probably would not consider Khind looking at just the Fundamental Mapper. But following a detailed analysis, I found that it is financially sound with a history of returning capital to shareholders through dividends.

While recent years have seen a decline in profit margins, KHIND’s focus on improving operational efficiencies could lead to margin recovery. There is also a good margin of safety

[weijian]

Hi i4value,

Once again, thanks for another good detailed study on Khind, a msian home-grown consumer appliance brand.

The (temporary) boost in revenue in FY20/21 has been well replicated in almost all companies who derive their revenue from discretionary spending of consumers. More so for Msia-centric retailers/brands as the Gov had allowed multiple EPF re-withdrawals during covid era. Been on the lower end of the appliance brand spectrum, it would benefit disproportionally as the Rakyat who withdrew the most from EPF are probably also their clientele.

Khind subcontracts out the mfg and I would assume it is mainly to China. So it is logical to assume that their suppliers (contract manufacturers) are also their competitors. And all of them are competing in the lower end of the brand spectrum. Khind's competitors have a huge home market to sell to while Khind derives the majority of its revenue only in Msia/Spore. The future is going to be really tough if your own customers/suppliers are competitors, either present or future, and you have no way to differentiate.