2nd Chance Properties

[izam]

Just bought some today. Happy to know they've gone ahead to buy over Noble Hotel.

[KopiKat]

When gold prices dropped last month, my first thought was that 2ndChance will likely get hit as they have a Gold segment biz and such a a drop will negatively impact them as they have inventories which were bought at higher prices. I was also wondering if they do any hedging.

Instead, 2ndChance share price remained strong...

I subsequently read an article in TheEdge on HK listed Gold Jewellery biz eg. Chow Tai Fook. The analysts were positive that the gold price drop had resulted in much higher revenues for the companies with an expected nett positive impact. In another thread, someone also posted that all physical gold being sold at UOB were quickly snapped up during that 1-2 days when gold prices had dropped the most.

Altho' no longer vested, I'm eagerly waiting for 2ndChance quarterly results to learn if what the analysts were projecting for the HK listcos will also be true here. One key difference is the end customers. For HK listcos, their end customers are both HK and China Chinese. If I'm not wrong, historically, Chinese (plus Indians?) likes to hoard Gold....

[nathanmaloney]

Kopi,

That's an interesting angle to look at the counter's insistent rise.... Didn't think about their gold business.

[piggo]

The analysts were positive that the gold price drop had resulted in much higher revenues for the companies with an expected nett positive impact. In another thread, someone also posted that all physical gold being sold at UOB were quickly snapped up during that 1-2 days when gold prices had dropped the most.

Actually 2nd Chance's inventory are mostly gold (it was on the cover page of one of their ARs), so a drop in gold price would result in a decrease in value of a good portion of their "hard assets". Whether or not that will increase revenue (and hopefully profits) we wouldn't know.

I'm more interested in their plans to IPO their retail segment, which is more or less the reason why their expanding in Msia (I think). The noble hotel buy is a good one, since it's a good place to sell their goods (and also be their immediate competition's landlord). However to date, their results aren't impressive but guess it's still too early to tell.

[Nick]

Perhaps one of the positive catalyst could have been Mr Salleh purchase of 1.3 million shares @ $0.435 ?

http://info.sgx.com/webcoranncatth.nsf/V...F003C19C7/$file/SCPL_FORM1_MRSALLEH_03-06-2013.pdf?openelement

(Not Vested)

[CityFarmer]

The analysts were positive that the gold price drop had resulted in much higher revenues for the companies with an expected nett positive impact. In another thread, someone also posted that all physical gold being sold at UOB were quickly snapped up during that 1-2 days when gold prices had dropped the most.

Actually 2nd Chance's inventory are mostly gold (it was on the cover page of one of their ARs), so a drop in gold price would result in a decrease in value of a good portion of their "hard assets". Whether or not that will increase revenue (and hopefully profits) we wouldn't know.

I refer to FAQ #13 in AR, and post the relevant part below. Gold inventory is only 5% of its asset, next to investment properties (67%) and quoted securities (18%). So we should not overly concern on its impact IMO

"The gold price can also slide to lower levels. It can collapse suddenly in a relatively short period of time,
especially if it had run up to a very high level. In which event, the reverse will take hold in that revenue should
increase but gross margin decrease. Our profits will be more stable if prices decrease gradually over a longer
period. A sudden collapse in prices on the other hand, will be a big hit to our profitability or may even cause
a first ever loss. If this happens, it should be a one-off event in which case prices will probably stabilise
gradually and thereafter we should enjoy more normal profits.
The management believes in maintaining the gold inventories at an optimal level and does not speculate on
the future price of gold or trade in gold derivatives."

I'm more interested in their plans to IPO their retail segment, which is more or less the reason why their expanding in Msia (I think). The noble hotel buy is a good one, since it's a good place to sell their goods (and also be their immediate competition's landlord). However to date, their results aren't impressive but guess it's still too early to tell.

Yes, I am also interested on the same plan, but no further update after Mr. Salleh talked about it years ago. IMO, it is still too early since equity of apparel (both Sgp + M'sia combined) is slightly over S$15 mil, which is too small for listing in Singapore. Pre-tax profit combined is estimated as S$7mil which is still lower than required.

(vested)

[nathanmaloney]

Usually the company issues warrants/bonus shares mid year, it has happened 3 times in the past few years.

Maybe insiders buying on knowledge/anticipation of such future events?

[CityFarmer]

Mr. Salleh bought 2 million shares in 2 days, 11 and 12 Jun, @$0.435

http://info.sgx.com/webcoranncatth.nsf/V...80037EEFD/$file/SCPL_FORM1_MRSALLEH_12June2013.pdf?openelement

[greengiraffe]

Mat Salleh has been good so far... I think the recent M'sian investment may have underpinned his optimism. Moreover, 2nd Chance dividends remains very attractive.

While an enbloc of City Plaza may be a long shot, the king of City Plaza is certainly well positioned for a revival of the area.

Like!
GG

Mr. Salleh bought 2 million shares in 2 days, 11 and 12 Jun, @$0.435

http://info.sgx.com/webcoranncatth.nsf/V...80037EEFD/$file/SCPL_FORM1_MRSALLEH_12June2013.pdf?openelement

[CityFarmer]

Q3FY2013 result will be announced on 28 June 2013.

http://info.sgx.com/webcorannc.nsf/Annou...endocument