Kingsmen Creatives

[weijian]

I couldn't find if this was a sponsored post (probably indirectly it is). Seems like a new corporate teambuilding option?

I played at the world’s first Nerf Action Xperience Arena before its grand opening in Singapore – and it was epic

Hasbro’s foam-based weaponry toy brand Nerf launched the world’s first Nerf Action Xperience Arena on Children’s Day morning (Oct 4). The 18,000 square feet compound features four unique play zones that are beyond exhilarating to any Nerf fan – even adults.

https://www.businessinsider.sg/i-played-...-was-epic/

[karlmarx]

If the ticket sales in the following months does not pick up, the opportunities for sub-licensing will be low, and so will the fees. This Nerf project does not appear to have the potential to contribute significantly to the group's earnings.

As KC's margins continue to compress and the visibility of its IP projects dim, its shares are no longer as cheap as previously thought. 

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Kingsmen Creatives: Imitation is flattery, but results may vary

https://www.businesstimes.com.sg/compani...s-may-vary

THE easiest story to sell is one that people have bought before. Ever since exhibitions innovator Cityneon blazed off the Singapore stock exchange earlier this year, analysts have searched among second-liners for the next multi-bagger.


Some have suggested that Kingsmen Creatives, a builder of exhibition displays for trade shows and theme parks and provider of design works and fit-out services for stores and museums, could be "the next Cityneon".

But even as Kingsmen takes a leaf from Cityneon's playbook with its new push to become a developer and marketer of intellectual property (IP) for experiential and themed attractions, it is starting from a very different place.

On Oct 4, Kingsmen opened the world's first Nerf family entertainment centre at Marina Square. Ticket sales have been "encouraging" so far, Kingsmen chief executive Andrew Cheng said. The exhibit is permanent and ticket sales risk lies squarely on the shoulders of the company, which spent between S$5 million and S$8 million to build the activity zone; it also has to cover rent for the 18,000 sq ft space.

[Mushy]

(I own shares in this company)

In the recent 2 months I have wandered into and around the nerf action arena (non-paying sections) 4 times, before and after the start of sch holidays, usually around late morning to lunchtime. I think this is not peak hour. Not crowded, but not really empty. Maybe 2 to 4 dozens excluding staff. As a comparison, there seems less customers at porroropark (which targets a different age group) nearby. Cannot really gauge if ticket sales had been good base on these experiences.
As for the animal planet show at the science centre, I also cannot find much reviews/blogs about it so far.

For the above 2 items, i have not been able to find on the internet any real indication of sales. I asked my wife if she heard about the animal planet show at sci centre but she is not aware. She is quite well-informed about acitivites for kids as she is the main one in our family to source for such.

Where do ticket sales for these new businesses fall under, exhibitions and thematic? I think at the next AGM, shareholders should ask mgmt for more details on the sales.

[dzwm87]

(I own shares in this company)

In the recent 2 months I have wandered into and around the nerf action arena (non-paying sections) 4 times, before and after the start of sch holidays, usually around late morning to lunchtime. I think this is not peak hour. Not crowded, but not really empty. Maybe 2 to 4 dozens excluding staff. As a comparison, there seems less customers at porroropark (which targets a different age group) nearby. Cannot really gauge if ticket sales had been good base on these experiences.
As for the animal planet show at the science centre, I also cannot find much reviews/blogs about it so far.

For the above 2 items, i have not been able to find on the internet any real indication of sales. I asked my wife if she heard about the animal planet show at sci centre but she is not aware. She is quite well-informed about acitivites for kids as she is the main one in our family to source for such.

Where do ticket sales for these new businesses fall under, exhibitions and thematic? I think at the next AGM, shareholders should ask mgmt for more details on the sales.

Why not bring your kids to try out both? My 2 cents worth is not to peg their Nerf Experience to Cityneon. I wonder how much rent they have to pay for the 18,000 sq ft space. For this to be a home-run, you need massive operating leverage. Weekdays naturally will be empty so you need the school holidays to be packed (e.g. very long queues). Otherwise, it won't move the needle and worst case, get dragged by fixed cost.

I used to think that they have a sticky and profitable business model but now, I think this is a management that got too comfortable: fat pay and happy as long as they can get to a maintenance mode.

[random85]

(I own shares in this company)

In the recent 2 months I have wandered into and around the nerf action arena (non-paying sections) 4 times, before and after the start of sch holidays, usually around late morning to lunchtime. I think this is not peak hour. Not crowded, but not really empty. Maybe 2 to 4 dozens excluding staff. As a comparison, there seems less customers at porroropark (which targets a different age group) nearby. Cannot really gauge if ticket sales had been good base on these experiences.
As for the animal planet show at the science centre, I also cannot find much reviews/blogs about it so far.

For the above 2 items, i have not been able to find on the internet any real indication of sales. I asked my wife if she heard about the animal planet show at sci centre but she is not aware. She is quite well-informed about acitivites for kids as she is the main one in our family to source for such.

Where do ticket sales for these new businesses fall under, exhibitions and thematic? I think at the next AGM, shareholders should ask mgmt for more details on the sales.

To share my two cents worth, I did not know about either the NERF or the Animal Show before I investigated into this stock. However, I need to disclaim that I do not have kids. Wondering if this portends badly for the company.

(Do not own shares but looking into establishing a position)

[brattzz]

*Already terminated, not good news for Kingsmen sir.

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NEWS RELEASE

TERMINATION OF AGREEMENT WITH VISION HIGH TO BRING NERF ACTION XPERIENCE TO THE CHINA MARKET

Singapore, December 31, 2019 – Kingsmen Creatives Ltd. (“Kingsmen”) (“金明创新”), and its subsidiaries (the “Group”), a leading communication design and production group, refers to the announcement made on 15 July 2019 in relation to the agreement entered into between Kingsmen Xperience, Inc. (“Kingsmen Xperience”), its US-based subsidiary and Vision High (HK) Limited (“Vision High”) to open NERF family entertainment center attractions within the China market (the “Agreement”).

The Group wishes to announce that Kingsmen Xperience and Vision High have mutually agreed to terminate the Agreement and each party shall release the other party of all the obligations and duties under the Agreement.

The termination of the Agreement is not expected to have any material impact on the earnings per share and net tangible assets per share of the Group for the current financial year ending 31 December 2019.

None of the Directors and controlling shareholders of the Company has any interest, whether direct or indirect, in the above transaction (other than through their shareholdings in the Company).

[Mushy]

I understand this used to be a valuebuddies darling stock.
Share price keeps falling and falling still.
Covid19 keeps the people and therefore their revenue away at least for the first half year.
The amount of cash is more than the market cap. Despite this they decided to have no dividends this year, which has not happened for a long long time.
Are things going forward so bad that they must hang on to every cent they have?

[ksir]

I understand this used to be a valuebuddies darling stock.
Share price keeps falling and falling still.
Covid19 keeps the people and therefore their revenue away at least for the first half year.
The amount of cash is more than the market cap. Despite this they decided to have no dividends this year, which has not happened for a long long time.
Are things going forward so bad that they must hang on to every cent they have?

The interest of minority shareholders and management are no longer aligned.
Even when they are earning peanuts, management can still pay themselves well (and don’t forget all those share awards).
It’s ridiculously painted picture of how management can reward themselves without breaking any law, perhaps only breaking their face value.

See their actions and cautious investors would know how misalignment their interests are with minority sh.

If I were such management, perhaps I’d do below:
* Chasing up top line, sacrifying the bottom line.
* Awarding shares to Themselves albeit they are already the major shareholders and albeit the low bottom line.
It’s not difficult to set the kpi as chasing top line.
* No share buyback when the price is undervalued.
* No Management share purchase when the price is undervalued.
Why need to buy using your own money when the company can award the shares to you.
* and eventually after all that, when the price is low enough, here they come to throw the lowest possible low ball offer to privatise the company.
* End with happy ever after for management, like the fairytale stuffs they built for rws.

Aboves are all hypotheticals.
Investors can see what the real management do and decide for themselves whether management skin in the game is the same as minority shareholders.

<divested since last year>








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[karlmarx]

This thread started in 2010, so there's 10 years of history here.

Anyone looking to learn to be a better investor should take the time to read the thread from start to finish, and reflect on the discussions. It's a learning gold mine.

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So this is seemingly yet another company whose business is selling 'for free,' given its cash level being higher than market cap. Is this a good deal?

The covid situation will hit KC very hard because not only are fit-out/events jobs delayed/postponed/canned, but also its Nerf venture, which is currently suffering from low/no sales and high overheads. After the covid is over, there is still the question of whether the Nerf venture can at least not lose money. My take is that it may be written off by the end of the year.

KC's IP segment was hit by not only poor execution, but also bad luck. Such are the risks of moving up the value chain.

Given the circumstances, I think it is prudent for the Board to conserve cash, for it may lose a good portion of it this year. KC's market price probably reflects an expectation of a huge impact on FY20's performance, which I think is not likely to be profitable.

The most attention should, however, probably be placed on its bread and butter fit out and exhibition businesses. Like most businesses, KC has been affected by the regional slowdown over the past years. A slower-growing (or not growing) market means more competition for all players.

Think of KC as the ID/contractor you hired to renovate your home, and multiply that by several orders of magnitude. There will always be demand for such services, but it is also a low-barrier business. If this is indeed the case, then the only time that KC will prosper will be when the market has more jobs than the players are able to take, allowing them to raise prices.

So a KC investor only has to wait for the broad economy to improve meaningfully, which may take, say, 2-3 years. The huge capital expenditure from MBS and RWS will provide them with large jobs, yes? If KC does return to former levels of profits and dividends, the investor should be quite well rewarded.

But I'm not sure about its chances.

[MOV]

From a high of $1.06 (in 2015) to today's share price 28.5 cts, Kingsmen is trading at 0.5 P/B with cash ($65m) > market capitalisation ($57m). 

Since the Great Financial Crisis, it has never traded this low and also never had a single year of loss. This is possibly the most challenging year and perfect storm the company is currently facing in its history since SARS in 2003. (which also happens to be IPO year for Kingsmen)

Can management pull through FY2020 without a loss, given its revenues probably will drop at least for next 2 quarters? A lot of hope rest on this statement from FY2019 commentary:

"The Group is taking proactive steps to minimise overheads, and reassess its operations and staff structures....." 

Or will the company follow the example of Breadtalk and restructure outside of public markets? Is the company attractive as an privatisation candidate?

Only time will tell..........