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(21-06-2011, 12:08 AM)dydx Wrote: Based on what I can observe, owners of luxury watches adopt different distribution strategies, and some for different markets. While some of them have chosen to maintain wholly-owned subsidiaries in Asia to undertake own local/regional wholesale, distribution, and marketing/advertsing functions, most of them do not own/operate their own retail outlets. I believe most of the single-brand luxury watch retail boutiques are owned by independent retailers like THG, either on exclusive or non-exclusive basis. E.g. THG distributes/retails Hublot watches in Singapore, Malaysia and Thailand on an exclusive basis, and has established single-brand Hublot flagship boutiques in Singapore and Malaysia, on top of selling Hublot watches in all THG outlets in these 3 countries. For Rolex, while this popular brand is sold in nearly all established luxury watch retailers on a non-exclusive basis, THG was given the right to operate a single-brand Rolex boutigue in Ion Orchard (located on the ground floor near the Prada boutique).
Apart from investing in retail outlets at good and strategic locations, another 2 key successful factors for THG are smart merchandising and good inventory control.
Hey dydx, thanks a lot for the valuable insights!
It's great to know that Hublot and Rolex give them some sort of exclusivity.
Do you foresee that THG is able to get exclusive distributorship in other countries in the asia pac region? The reason I ask this question is that I find their business model easy to duplicate. Although it takes high capital to setup shops and some industry knowledge to run well, it's not easy to prevent new entrants into this segment.
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The Hour Glass ($1.20) - Good support level at $1.18 -1.20 with huge accumulation. Something brewing out there...
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This morning, soon after the market opened, someone gutsy enough moved THG share price to the $1.30/1.31 level and queued to buy shares at $1.31 for a good 8 minutes till 9.08am, before stopping. This is indeed a strange market action!
If the someone means business, I guess there should be more market action to come?!
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29-06-2011, 12:06 PM
(This post was last modified: 29-06-2011, 12:13 PM by valuehunter.)
My opinion is that for a well-managed and nicely profitable company like THG and Vicom, usually it is only a matter of time before its share price catches up with its intrinsic value, though ocassionally some corporate actions may come along to unlock value for shareholders.
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(29-06-2011, 12:06 PM)valuehunter Wrote: My opinion is that for a well-managed and nicely profitable company like THG and Vicom, usually it is only a matter of time before its share price catches up with its intrinsic value, though ocassionally some corporate actions may come along to unlock value for shareholders.
or the founding family will take it private.
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The recently released FY11 (ended 31Mar11) AR makes interesting reading....
http://www.thehourglass.com/AR/AR_17_1.PDF
Again, I am particularly impressed by Executive Chairman Henry Tay's Chairman Statement in p13 to p15. If he has written the Statement himself, I think Dr Tay has again shown his mettle as a proven leader for THG and in steering the business towards continuous, steady and profitable growth.
I now look forward to the coming $0.05/share Final dividend for FY11 which will be paid on 17Sep11 , with 'XD' date fixed for 30Jul11. As before, shareholders can choose to receive their dividends in cash or new shares, as provided for under an existing scrip dividend option.
Based on the last done share price of $1.24 (as of the close of 1Jul11) and FY11's EPS of $0.181, Mr Market is now pricing THG at a historical PER of 6.85x, on a cum-dividend basis. A relevant question: Is the current market valuation good enough for a premier and very well-established and managed business, that is poised to grow further and likely to deliver even higher profits over time?
IMHO, it is quite reasonable to assume or believe that the best is yet to be for THG's business and market valuation!
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06-07-2011, 09:50 AM
(This post was last modified: 06-07-2011, 09:55 AM by valuehunter.)
For investors interested in this business, it is important to understand the passion and intimate knowledge Michael Tay has for the business. It is also important to understand how retailers work with their suppliers, their relationships and the preference of suppliers in their choice of retailers. Perhaps one can glean some useful insights from an old Sep 2008 article available in THG's website under the press room section.
Given that the luxury watch retail segment is not bullet proof to recession, a strong management with a strong focus on long term planning will ensure that THG will be steered by steady hands in good times and in bad.
Is THG still a good value proposition at current valuation? In my opinion, certainly so. Of course, as a vested party, i may be biased. Let Mr Market be the jury in the long run..
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People may wonder who is the largest independent retailer of Rolex brand luxury watches in Singapore?
There is a Rolex ad in the front-page of ST today (15Jul11), and at the bottom of the ad, there are a total of 10 independent retailers listed - including the better-known Cortina, Dickson, Sincere, and THG; and the lesser-known Kee Hing Hung, Lee Chay, Luxury Fashion, Tai Hong Hung, The Time Place, and Watch Palace. What is more interesting is that THG has listed a total of 8 outlets; whereas the other 9 retailers have listed a total of 15 outlets, with Dickson alone listed 4 outlets.
So by sheer number of outlets alone, THG's position is a commanding 37.5% of the total. Without doubt, THG is the leading Rolex retailer in Singapore - and very likely also enjoying the largest market share for Rolex watches sold in Singapore among all the independent retailers!
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Crabcrab attended AGM on the 15 July 2011 this year - Chairman Henry Tay had commented that the JV PMT-THE HOUR GLASS had actually emerged as the market leader in luxury watch sector in Thailand....
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Pricing for the $0.05/share Final div. for FY11 (ended 31Mar11) to be taken in scrip has been fixed at $1.2083 per new share.....
http://info.sgx.com/webcoranncatth.nsf/V...000374935/$file/Issue_Price_of_New_Shares.pdf?openelement
A relevant question: Is it better to take the div. in scrip or cash? For cash, can use the money to buy a new watch. For scrip, cannot buy a new watch now; but if THG's share price goes up further, can sell the shares at a bigger profit say next year, and use the money to buy perhaps 2 watches, or a real classy watch.
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