ValueMax Group

[CityFarmer]

The IPO completed, and shares will be traded at 9.00 a.m on 30 October 2013, which is tomorrow.

Press Release: http://infopub.sgx.com/FileOpen/ValueMax...eID=261684

[mkmk]

[Image: 18A39117-ED66-4B43-A159-273A3BF4F0C3-999...eb8242.jpg]

The balloting ratio is pretty low

[desmondxyz]

Bo tio...

[CityFarmer]

Pawnbroker ValueMax surges in trading debut

SINGAPORE — Shares of ValueMax Group, one of the oldest pawnbroking chains here, surged as high as 17.6 per cent above its initial public offering (IPO) price in its trading debut yesterday, signalling strong investor interest in alternative finance providers in Singapore.

ValueMax is the third pawnbroker to list in Singapore, after Maxi-Cash Financial Services and MoneyMax Financial Services.

The firm’s shares rose as high as S$0.60, versus its IPO price of S$0.51, before easing to S$0.525 at the close. It was the second most active counter by volume yesterday, with about 206 million shares changing hands.

ValueMax said it plans to acquire firms and set up new pawnshops and second-hand jewellery retail outlets. It also aims to distribute half of its net profit as dividends for each of its fiscal years from 2013 to 2015. AGENCIES
http://www.todayonline.com/business/pawn...ding-debut

[hh488]

Seems like they did not have a Stablelising manager to support the share price? Already below IPO price.

[momoeagle]

When gold prices go down, what will happen to their inventory?
And when interest rates go up, what will happen to demand for their services?

Hi, pawnshops are governed by pawnbroker regulations and do not benefit from increase in the value of pledges except for greater margin of safety for the loans. If the prices of the pledges decrease they will face recoverability issues. The interest they charge is also capped (at 6% I think). If interest rates rises, their net interest margin decline. I think demand for their services will not be affected by much.

The maximum interest charged is 1.5% per month, 9% per 6 months or 18% per year.

The tenure of ticket is usually 6 months i.e. 9% interest on loan amount. Interest is collected upon renewal, thus the interest is not compounded.

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Pawnbrokers Act, 16.—(1) A pawnbroker may take profit on a loan on a pledge at a rate not exceeding that specified in the Second Schedule.

Second Schedule stated a maximum of 1 1/ 2% per month on the amount of the loan.
Ref: http://statutes.agc.gov.sg/aol/search/di...0#pr16-ps1-.
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Ah.. Thanks for the correction. Sorry everyone for the silly mistake. I mixed up the tenure of the loan for the interest rates when recalling off the top of my head.

Ah I didn't see the replies..

Thanks guys! That was useful information


[Not vested]

[CityFarmer]

First financial report, after the IPO, IIRC. Is the performance justifies the valuation?

Excerpts from the report:

"The Group’s revenue of $242.1 million in 9M2013 was $143.6 million or 37.3% lower than the revenue of $385.7 million in the same period last year. This was the result of the decrease in revenue from the retail and trading of pre-owned jewellery and gold business while the pawnbroking business remained relatively stable."

"Gross profit declined by 13.7% or $2.9 million as a result of the overall decrease in revenue. Overall gross profit margin increased from 5.4% to 7.4% as a result of a higher revenue mix from the pawnbroking business which commands a higher gross margin compared to the retail and trading business."

"As a result of the above, profit before income tax decreased by $5.1 million from $14.9 million in 9M2012 to $9.8 million in 9M2013"

(not vested)

[opmi]

so it is a low margin-used jewellery business 'marketed' as a high-margin pawnbroker???

% rev of used jewellery trading goes DOWN, overall gross profit margin goes UP..

[CityFarmer]

The OSK-DMG report on the company.

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Valuemax's full year revenue slumped by 30.6% due to
decline in trading of pre-owned jewellery and gold
business. Valuemax has announced that its revenue has
dropped by 30.6% for FY13 due to falling gold prices, which
led to a 31.6% decline in the retail and trading of pre-owned
jewellery and gold business and a 8.1% decline in its
pawnbroking business. NPAT has slumped by 35.6% as well
due to an overall decrease in revenue. A dividend of SGD
0.88ct has been declared. (SGX)

Ref: http://remisiers.org/cms_images/research...atters.pdf

[muns]

Do any of the 3 pawnbrokers breakdown their rev source, or do they all just lump everything to "Retail and trading of pre-owned jewelry and gold".

Does anyone know of how much comes from gold related operations alone (Retail and Trading), their rev dropped of close to 30% in fy2013 seemed to correspond nicely with the drop in gold prices, just wondering does anyone have the breakdown?
___________________________________________________________
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