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I think it is difficult to bet against a proven high-quality company, even though it may suffer a temporary squeeze in profitability.
If and when the share price falls, some existing long-term shareholders will be quite happy to add to their holdings, and new investors happy with the fallen share price may start to nibble. Also, we mustn't forget that Kingsmen has an existing performance share scheme (under which, the company awards a small quantity from its treasury shares to deserving managers/employees), which needs to be 'funded' through the company buying back shares occasionally. We can be quite sure that Kingsmen's management will activate buying back some shares when the share price is low enough or hits their 'buy' price level.
With the FY10 full-year results due in Feb11 and the usual final dividend (last FY09: $0.02/share) coming, I suppose only those who are ignorant of the above or are in need of money would choose to sell their shares during this period.
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(22-12-2010, 05:51 PM)SLC81 Wrote: The project is big and Kingsmen IMHO, night not have sufficient experience managing this type of project at first. There could be cost overrun (high material cost and manpower) and there was already a lawsuit going with one of its subcontractors so in the end, they probably will not make good profit or any profit at all for the Universal Studio Project, nevertheless, this opens doors for them to sign on Hong Kong Disney Land contracts and who know what may come along the way (we are talking about other Theme Parks in region)
The associates are loss making and while reading through its Singapore competitors's business prospect (Cityneon and Communication Design) i am afraid that competition will be tough going forward.
Kingsmen is also very thinly traded so it will go up or down a lot, either way.
For that reasons i stay out for now but this could be my big mistake, say if in Feb/2011, Kingmen collects lot of cash and decide to distribute out, most of it LOL.
I believe the bulk of Kingsmen's Universal Studios contracts were already completed in FY 2009, and what remains are some variation work orders. If I am not wrong, they already mentioned that they signed some contracts for Disneyland Hong Kong. With the experience gained from their Universal Studios project, they are in a good position to bid for thematic/scenic works in 2011 and beyond.
Though some of their associates are loss-making, I guess that is to be expected as they are just making inroads into these new regions, and barriers to entry are pretty low for this industry. The competition has always been present and Kingsmen therefore has to assert its authority by leveraging on its human capital and skills and also its reputation.
The business (although low margin) generates a lot of cash and requires minimal capex, so it is very likely that Kingsmen can maintain their dividend policy of 3.5c per year. This translates to a yield of 6.25% at today's closing price of 56c.
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Mr Edward Ho Juan Hee, Managing Director - Greater China Operations, has decided to pursue his own interest, but will continue to act as a consultant to the Group's China operations.
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For me, it is obviously a bad sign.
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28-12-2010, 05:55 PM
(This post was last modified: 28-12-2010, 05:57 PM by Musicwhiz.)
(28-12-2010, 05:51 PM)valuestalker Wrote: Mr Edward Ho Juan Hee, Managing Director - Greater China Operations, has decided to pursue his own interest, but will continue to act as a consultant to the Group's China operations.
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For me, it is obviously a bad sign.
Why so? Could you explain, please?
Note: His success Michael Ng Hung Chiao has 25.5 years of experience working in Kingsmen.
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28-12-2010, 06:10 PM
(This post was last modified: 28-12-2010, 06:12 PM by dydx.)
On the other hand, Kingsmen has put forwarded one of their most trusted senior managers from H.O. in Singapore - Michael Ng Hung Chiao - to replace Edward Ho as the new MD - China Operations.....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
In any big and progressive organizations, the roles/functions of key managers must change with the business strategies and priorities. If Ed Ho could not deliver what's expected or does not want the job, he has to be replaced. In this regard, shareholders must have faith in Kingsmen's senior management headed by Ben Soh and Simon Ong (also the controlling shareholders), supported by the BOD comprising a few other good and experienced men.
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I hope Kingsmen has, in place, measures to protect themselves from the possibility of Mr. Ho joining some other competitors eventually. Moreover, would like to know as well, what is the background of his successor, Mr. Ng, and his experience in China. It is to my understanding that not everyone can succeed doing business in China, where "guanxi" counts for more than just experience in the business. Hopefully he already is a tested hand in the Chinese arena.
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(28-12-2010, 07:00 PM)Jon-san Wrote: I hope Kingsmen has, in place, measures to protect themselves from the possibility of Mr. Ho joining some other competitors eventually. Moreover, would like to know as well, what is the background of his successor, Mr. Ng, and his experience in China. It is to my understanding that not everyone can succeed doing business in China, where "guanxi" counts for more than just experience in the business. Hopefully he already is a tested hand in the Chinese arena.
Yah, those are my concerns when i saw the news.
but comes to think of it, Mr Ed is actually husband of Tan Ai lin
>>Mr Ho is deemed interested in 2,245,573 shares of Kingsmen Creatives Ltd held by his wife, Ms Tan Ai Lin.
Recently Kingsmen just acquired 11.7% of Ms Tan Ai Lin's share in Kingsmen (North Asia) Limited.
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We can review the roles/responsibilities and brief background of Michael Ng and Edward Ho by refering to p6 of Kingsmen's latest FY09 AR.....
http://info.sgx.com/listprosp.nsf/07aed3...50018b436/$FILE/Kingsmen%20AR09.pdf
From Kingsmen's FY05 AR, I have managed to extract a more detailed description of Michael Ng, reproduced below -
Michael Ng Hung Chiao is a Director of Kingsmen Exhibits Pte Ltd. He is responsible for the day-to-day operations and leading and motivating the sales and operations team. He is also involved in expanding the clientele base and maintaining key accounts of both local and international clients. From 1975 to 1978, he was an Assistant Technician (Construction) with Jurong Town Corporation. From 1978 to 1980, he was a Marketing Executive with United Public M&E Pte Ltd. Thereafter he joined Item Pte Ltd as a Marketing Executive from 1981 to 1983. Michael Ng joined Kingsmen Exhibitions Builders Pte Ltd in 1984 as a Sales and Marketing Manager and was made the Director of Kingsmen Exhibits Pte Ltd in 1991. He received a Master in Business Administration (Marketing) from the University of Hull in the United Kingdom.
It is clearly mentioned in today's (28Dec10) announcement that Edward Ho is leaving the employment of Kingsmen on 1Jan11 "to pursue his own interest, but will continue to act as a consultant to the Group's China operations.".....
http://info.sgx.com/webcorannc.nsf/Annou...endocument
We could have predicted the coming of this event, as Kingsmen, in an earlier announcement dated 6Dec10, decided to buy out Ho's 11.7% equity interest (held by his wife, Tan Ai Lin) in subsidiary Kingsmen (North Asia) Ltd which holds the group's Greater China operations.....
http://info.sgx.com/webcoranncatth.nsf/V...100085DF7/$file/KNAAcquisitonAnnouncement.pdf?openelement
We should all also take a good look into Kingsmen's already quite well-established and growing Greater China network/operations by simply visiting its website and reviewing the projects completed and customer names.....
http://www.kingsmen-gc.com/eng/greater_network.html
Clearly, Kingsmen's Greater China network/operations is not a one-man show!
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I went to Kingsmen's website to look for more info of Michael Ng and accidentally saw this:
Euroshop visit us hall 12, B53.
a quick googled:
From 26th February to 2nd March 2011 when the international retail industry meets in Düsseldorf. After all, the opportunity to profit from the definitive industry highlight comes around just once in three years – at EuroShop!
Only here will you find more than 1,800 exhibitors from 50 countries and 104,000 trade visitors from 93 countries on 200,000m² gross exhibition space.
Quality, variety and internationality – EuroShop.
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SENIOR MANAGEMENT APPOINTMENTS & REALIGNMENT OF DUTIES
http://info.sgx.com/webcoranncatth.nsf/V...80033FAD0/$file/SeniorManagementappointments.pdf?openelement
Personally, I view it as a good move to clarify their management succession planning while keeping the old guns to mentor the upcoming team.
(Not Vested)
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.
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