Kingsmen Creatives

[brattzz]

May comes, i can only guess it's gets much worst for KC due to the month long CB until June 2020, figure KC board has to face reality and hang on there, :O

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14 May 2020 Kingsmen eAGM at 10am today
(click to read SGX announcement)

Rev $365m up 1%
GP $77m down 5%
NP $0.5m down 93%

For those who missed the eAGM, look out for the meeting minutes to be publish within 1 month.

Stay home and stay safe, everyone.

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15 May 2020 Result of eAGM this morning all passed except Resolution 8.
52% against issuing performance shares to company/staffs.

(click to read)

Stay home and stay safe, everyone.

[weijian]

This is interesting. I read back this thread and saw that VB RBM proposed for a rejection in share issuance to Mgt/employee in AGM2019.

RBM's post back in early 2019: https://www.valuebuddies.com/thread-5-po...#pid152160

Eventually, the "Against Votes" lost (AGM 2019 results: https://links.sgx.com/FileOpen/SGXNETAGM...eID=557144)

Tally of results:
AGM 2018: 6.6 Mln (70%) to ~2.8 Mln (30%)
AGM 2019: 9.9 Mln (71%) to ~4.1 Mln (29%)
AGM 2020: 5.3 Mln (48%) to ~5.8 Mln (52%)

It seems like Mgt has been "defeated" by a continual OPMI uprising with a combination of the apathy (or loss of support) of its proxies.

[RBM]

Thank you for your kind update Weijian,

The rejection by Shareholders of Kingsmen’s proposed share performance share grants has been overdue and yesterday’s AGM Resolution # 8 Poll Result should not come as a surprise to Kingsmen’s Management. It is galling that in a year where there was no Final Dividend declared that Management had the nerve to push for Employee share grants. The Poll result was entirely deserved.

If you read Kingsmen’s latest annual report there is absolutely no mention of the calamitous drop in share price - even before the onset of the Coronavirus, Kingsmen’s share price was down by >50% over the previous 12 months. And the profitability drop barely attracted any narrative in the AR. These realities pushed previously loyal shareholders over the edge.

This year I (and some others) decided to be more discreet in pushing for rejection of Employee Remuneration Resolutions - that approach seems to have worked - I am convinced that last year Kingsmen’s Management ‘cottoned on’ to a Shareholder Revolt (note the 2019 AGM Yes votes for this resolution in Weijian’s tabulation above) and they rallied around some of their closer large shareholders to vote in favour. I am convinced that Kingsmen’s Management reviews this VB thread and they will likely have noted the contents of some forummers messages, including those posted by yours truly, wherein I pushed for rejection of four Employee-Remuneration-related AGM resolutions.

It remains to be seen how Ben, Simon and Andrew (and the BoD?) react to this public admonishment. I would urge the BoD to objectively address the question of how they can more closely align management remuneration to Kingsmen’s share price - for too long Senior Management remuneration has not reflected the deterioration of Company profitability.

I wish all VB’ers and their loved ones the very best of health in these extraordinary times. Take care. I apologise for the sporadic nature of my VB postings.

Vested,RBM

[weijian]

Hi RBM,
It seems like you have picked up some lessons from Sun Tze's Art of War.

Generally, OPMIs choose the "Flight" option over "Fight". Currently, i would choose the former too but I really do not think that there is any issue with choosing the "Fight" option. Sometimes, when we have been vested monetarily and emotionally long enough, we literally internalized the exalted value investing principle of ownership mentality to an extent, that we are willing to "fight our "towkay big brother" partner or even take steps to to steer the company in the right direction again, despite our resource limitations.

I think those guys will probably shrug it aside for a year. I am sure this is a painful lesson learnt and probably wouldn't be repeated in 2021. Their proxies will be back again, come Hell or High Water, regardless of seasons.

[dydx]

Kingsmen's Retail & Corporate Interiors (which includes manufacture of fit-out materials in China/M'sia for exports, including to U.S.) has suffered greatly in FY19 because of weak demand and the imposition of U.S. import tariffs on Chinese goods, which greatly affected some contracts signed previously. There was also the start-up costs and expenses for their own new thematic projects.

Together with their team of pioneer key managers (most of them are listed among the 'Top 20' shareholders), founders Soh and Ong remain committed to the long-term success of the group's business. This can be easily confirmed by the business transformation Kingsmen has started in the recent years and is actively pursuing, and the investment in the new purpose-built corporate HQ building . It is not Kingsmen's style to let go employees easily, as good people and talents make this business work. If circumstances require them to cut expenses, I am sure Soh and Ong will, and I will be surprised if they have not already done so.

With a wide geographical coverage with direct presence in some 20 countries, Kingsmen even though being a fragmented business is quite valuable. Against the current market cap of only $44.0m, Mr Market is obviously overly conservative. I remain positive that the business and its financial performance will recover after Covid-19, and that when it is time for Soh and Ong to retire - I am assuming they will always act together in this business - Kingsmen will be sold to a new owner at close to its fair intrinsic value, for the benefit of all shareholders.

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my random thoughts

1. I'm not vested in KC but if the price is right, why not.
2. Yes, there is a reason why not. It's business must be able sustainable aka minimally, I should be confident that it could survive current challenge. (if I assessed that KC could make it this round, then the investment merit is established).

at this moment, I had not put much effort into KC as there are better opportunities to spend my time - primarily bluechips.

however, I took a mental note on KC because it's a biggest holding of our valuebuddies.
this deserved a closer look when the time is appropriate.


(I had a habit.  When a stock is hot or own by someone, I will refuse to do any deep dive.
  however, exactly opposite, after the same stock had cool down drastically, then it automatically activated in my study list.
  this is kind of weird but some how it works for me.)

back to KC, it had spunk out into my face and i am forced to take a closer look.

it's just a matter of time before i start buying.

the price seems to be right and the sentiment is ripe too.

Thank you buddies.

Stay home and stay safe, everyone.

[Mushy]

For a valuebuddie, I am a very latecomer to KC.
As I had previously openly shared, I had been building up my KC shares. The share price had stabilized abit (like every other) so I am just sitting waiting patiently. I am halfway to my target. I expect the worst had still not come for the financial results of this company and hence the share price had not seen the worst. I wonder if they will give an interim results update like other companies whom had decided to skip quaterly results announcement.

Previously I thought the business activities might be almost zero during sg circuit breaker and lockdown in other countries. Their business is non essential after all. After attending the agm, good to know they are engaged with the local covid19 efforts so some workers can work and revenue will not be zero. They still seem so confident with their experiential plans. Luckily for them this year, the agm is not live otherwise the questionings from shareholders will surely be stressful.

I attended the "agm", but switched off when the polls started and didn't realise the last results. hmmm....

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vs design studio (another interesting counter by valuebuddies), 
KC survived.

This to me is already a rather good indicator that KC has some moat.
To some vested valuebuddies, the moat must be obvious.
To those not vested, the lack of clear and visible moat is equally obvious too.

To me, KC has moat. 
Moving forward, my assessment of KC moat is widening or shirking will determine the quantum of $$$ to allocate for KC.

Thank you all.
Really appreciate your help and I benefited tremendously from your kind sharing.

Thank you very much and I wish all valuebuddies a nice and fruitful investment journey.

Stay home and stay vested, everyone.