Kingsmen Creatives

[Bibi]

Called Kidzania, the $90 million park will allow children aged four to 14 to "work" in a local bank, transport company or hospital. They will be able to pretend to be police officers, doctors, journalists and postmen among other professions.

Sorry, out of topic. I want my kid to pretend to be a landlord .

[Some-one]

I prefer my kid to be an MP...

[Musicwhiz]

Retailers will continue to renovate and refurbish to stay relevant, and so Kingsmen should see a steady stream of business for its Interior Fit-Out Division.

S'pore retailers splurging on renovation & re-branding
24 January 2013 2025 hrs (SST)
URL : http://www.channelnewsasia.com/stories/s...94/1/.html

SINGAPORE: Singapore retailers are spending big bucks on major renovations and re-branding to keep customers shopping at their outlets.

Industry watchers say the competitive climate is forcing retailers to take a second look at their business strategy.

Home-grown department store Tangs invested S$45 million in a three-year transformation on its 80th anniversary. It expanded retail space by 25 per cent, which includes 14 flagship stores such as Tom Ford Beauty and Aesop.

Foo Tiang Sooi, CEO of Tangs said: "We decided to embark on this transformation project because we see the changing landscape of retail, both from competition as well as the fact that customer preferences have changed. They are a lot more affluent and savvy and through online and social media they are also able to have better judgement and variety of choices available to them."

Brand consultancy A S Louken said heritage brands in particular, recognise the need for change.

Sixty per cent of their clients are family-run businesses, such as Polar Puffs & Cakes and On Cheong Jewellery.

Most of them run by second-generation leaders trying to find solutions to stay up-to-date.

This is spurring demand for A S Louken's line of work. Revenue for them has doubled over the last year.

But today's "brand-saturated" market means identifying a consumer's wants and needs is not so straightforward any more.

Luke Lim, CEO at A S louken said: "We typically will tell our clients that you need to leverage what is core to you - your competitive advantage. Leverage that and build a distinctive space that is differentiated. Once that has been identified, communicate that space clearly. One message, one brand."

For retailers, tough competition is also forcing them to think deeply about who their customers are and how to retain them.

Lynda Wee, adjunct associate professor at Nanyang Technological University's Nanyang Business School said: "It forces them to be more focused, more niche, looking at them, knowing what they want to growing alongside them. They're getting more affluent, they're getting more discerning. I can see them moving from a mainstream department store to a more niche, more targeted, more premium kind of department store concept in the likes of Neiman Marcus, Bloomingdale."

Industry watchers add that competition today is both for brands and location.

Another heritage name, Robinsons, is moving to its flagship store and a larger space this year.

It will house some 20 new-to-market brands in the 154-year-old department store.

- CNA/xq

[Musicwhiz]

Posting the full article for Kidzania.

The Straits Times
www.straitstimes.com
Published on Jan 25, 2013
Coming up: 'Kids at work' theme park

By Ng Kai Ling

CHILDREN visiting the upcoming $90 million kids' theme park at Sentosa can look forward to "working" as doctors, pilots and journalists at local firms.

Set to open in 2015, KidZania Singapore is in talks with home-grown businesses to help make the miniature city uniquely Singaporean. For example, the "bank" and "airplane" in the theme park would bear logos of an actual local bank and airline.

KidZania Singapore is a collaboration between Mexican company KidZania and Malaysia's Themed Attractions and Resorts (TAR), which operates the existing KidZania park in Kuala Lumpur and Legoland in Johor.

TAR's chief executive Ahmad Burhanuddin said KidZania's model of corporate partnerships allows companies to brand themselves differently.

He declined to say which companies he is in talks with except that TAR "is actively involved with getting partnerships".

In KidZania Kuala Lumpur, those aged four to 14 "work" for companies such as CIMB Bank, airline AirAsia and newspaper company The New Straits Times.

The idea behind KidZania is for children to learn values such as hard work and punctuality through role play.

The park offers 90 occupations for children, who can pretend to be police officers, doctors, journalists or postmen. Doing their jobs well will earn them "money" they can use in the "city" to buy things such as food.

The 80,000 sq ft indoor theme park will also be the anchor tenant at Sentosa's new Family Entertainment Centre. Work on the centre will start in the middle of this year.

Mr Mike Barclay, CEO of Sentosa Development Corp, said KidZania fits into plans to turn Palawan Beach into an area for families with young children. He added: "We needed something indoors so that families have somewhere to go on a wet day."

TAR is hoping to attract 500,000 visitors in its first year of operation. Ticket prices have not been finalised for Singapore, but in Kuala Lumpur, a five-hour visit costs RM75 (S$30).

Krithika Sivakumar, 14, is excited about the theme park and is thinking about visiting the one in Malaysia first. "It's not like other theme parks where you take rides... I want to try being a pilot or astronaut or dentist."

kailing@sph.com.sg

[RBM]

Earlier this evening I made a posting on the VB Pico thread, where I attempted to summarise my personal take on Pico’s recent FY 2012 results announcement.

Pico is undoubtedly Kingsmen’s key competitor – and, dare I say, company with whom Kingsmen should benchmark - in Asia Pacific. As such, I believe it will be interesting to see if there are parallels with Kingsmen’s forthcoming FY 2012 results, which I understand we can anticipate being announced in the last few days of February – i.e. in a couple of weeks’ time. For convenience, I append my Pico posting below. As you will see, I have mixed views on Pico’s 25th January results disclosure, particularly as regards their final dividend declaration ……… but I am particularly pleased with Pico’s share price performance over the last five months or so (something which I don’t believe anyone can say regarding Kingsmen).

In no particular order, I would like to touch on three points ……………. (and please bear in mind I am consciously being provocative here)…………………………

- I am still holding out hope for Kingsmen to raise their final dividend, i.e. above S$ Cents 2.5. One of the drivers of such hope was that, as of the FY 2011 results, Pico’s dividend yield was substantially higher than Kingsmen's (even though Kingsmen’s is not-too-shabby at ~ ~ 5.1%). With Pico having announced a full year dividend reduction, as compared to FY 2011, and with the Pico dividend yield now standing well below 5% (also due to Pico share price appreciation), I wonder if Kingsmen’s BoD will feel less pressure to raise the final dividend? I hope not.

- I find the dimensions of Pico’s growth plans and investments in China striking. The two new factories Pico are about to bring on line, in Beijing and Shanghai, are huge……….. and apparently very high tech. Factory space in each is several tens of thousands of square meters and Pico’s output capacity in the PRC will double as a result. In their FY 2012 results announcement, Pico also talk at length to the focus they are placing on automation and innovation and their determination to grow their PRC business further. Will Kingsmen be able to compete effectively against such enhanced capabilities in the PRC? – or will they seek out niches within which they can eek out a margin?

- I note that Pico took on some lower-margin undertakings during 2012, particularly in the PRC (this adversely impacted their profitability). It will be interesting to see if Kingsmen are prepared to talk to their competitive position in the PRC and moreover if they have accepted lower margin business to maintain/enhance their market share – in the PRC or elsewhere for that matter.

Since 1st September last year, Kingsmen’s share price has increased by 3% (three percent). In the same 5 month period, Pico’s share price increased by 32 % (thirty-two percent). Over the last 12 months, Kingsmen’s share price is up 31% (in S$ terms) as compared to Pico’s 40% HK$ based increase. Clearly Kingsmen has not enjoyed anything like the rally that many other smaller/mid cap counters on the SGX have enjoyed and the “irregularities” reported in January may have weighed, although not as much as some had initially feared.

I look forward to Kingsmen's FY 2012 results announcement. I hear fireworks going off ............ it must be CNY. Have been typing for too long!

Vested in Kingsmen (& Pico)

+++++++++++++++++++++++++++++++++++++++++++
My Pico VB Posting of earlier this evening……………….

I extend to all VB forummers “Kung Hei Fat Choy”,

Pico reported out their audited FY 2012 results, i.e. for the 12 months ending 31st October 2012, on 25th January 2012. Having now digested on them, my take on Pico’s results, in the form of three +ve’s and three -ve’s is as follows…………….

+ve: Sales were up by ~ +10 % year-on-year – by division these were: 33% in “Signage”, 28% in Museum & Theme Parks and 13% in Pico’s key Exhibition & Event Marketing unit.

+ve: Pico’s revenue growth in China continued – China revenues now constitute > 55% of Pico’s total revenues.

+ve: Pico has secured several major projects going forward, e.g. Shanghai Disneyland, the 2014 World Cup in Brazil and the Russian Sochi 2014 Winter Olympics – these can be expected to boost revenues in the coming years. To further propel growth in the PRC, Pico will open two new huge factories, in Beijing and Shanghai, later this year; these will double existing output capacity. The ~ 41,000 m2 Shanghai factory will be the largest Pico has.

-ve: NPAT declined by ~ 4% as compared to FY 2011 – mainly because a) Pico took on a few lower margin projects (in China if I read it correctly) during the course of 2012 and b) re-structuring charges arising from closure of their Chicago office and consolidation of their India operations. As regards point b), DBS Vickers, in their analyst report of 28th January, seemed at pains to stress that if such one-offs were excluded, then QUOTE FY12 core profit actually increased 11% UNQUOTE. I still believe Pico’s FY 2012 bottom line is “so-so”.

-ve: Personally speaking, I am also a tad disappointed with Pico’s final dividend declaration. If the HK$c 5.5 final dividend is included, the full year total is HK$c 9.5, i.e. down > 20% on the FY 2011 dividend, although I recognise the HK$c 12 FY 2011 dividend included a HK$c 4 “special”. The FY 2012 dividend corresponds to a pay-out ratio of 48%, which should be compared to the 59% ratio, i.e. including special dividend, in FY 2011. Based on Pico’s last done of HK$ 2.25 of yesterday, their dividend yield currently now stands at 4.2 %.

-ve: I had expected more revenues arising for Pico from their Yeosu (South Korea) Expo contract. Although I was aware Yeosu was a smaller-scale affair than the Shanghai World Expo, I was surprised to read in Pico’s results announcement that QUOTE the total contribution to revenue was only about 20 % of that from the Shanghai World Expo 2010 UNQUOTE. May be I was being unrealistic regarding revenue expectations from this smaller Expo?……….. but Pico earlier did beat their chest about their involvement.

Since the Pico VB thread was kicked-off on 1st September last year, Pico’s share price has increased by 32 % (thirty-two percent). Over the last 12 months, Pico’s share price is up 40% (forty percent). This positive share price performance lessens to some extent my disappointment regarding their final FY 2012 dividend declaration – but while I had not anticipated anything like a 32% increase in FY dividend, I was not anticipating a dividend reduction.

I will shortly be making a posting on the Kingsmen Creatives thread – since I believe there are some potential parallels and implications in Pico’s results that VB forummers who are vested in Kingsmen may want to consider. Pico is undoubtedly Kingsmen’s key competitor – and, dare I say, company with whom it should benchmark - in Asia Pacific.

Vested in Pico (& Kingsmen)

[Musicwhiz]

Hi RBM,

Thank you for your write-up on both Pico FE (a key competitor of Kingsmen) as well as your views on Kingsmen. Let me address some issues:-

1) Kingsmen had already kept their interim dividend constant at 1.5c/share, so I doubt there would be an increase in the final dividend to >2.5c/share. My take is that if they wanted to rase total full year dividends they would have done so at the interim stage while keeping final constant. I could be wrong, let's wait and see. Or else they may also do what they did in FY 2010 - declare a special dividend of 0.5c in addition to a final dividend, labelling it as "one-off".

2) I think we have to recognize that Pico FE's capabilities are more towards M&E (mega-events) and their Interiors division is much smaller as a revenue contributor. Kingsmen, on other hand, has a burgeoning Interiors portfolio of loyal and repeat customers who require refurbishment/expansion. Therefore, it would look as though Pico FE is clinching the mega-events and leaving kIngsmen in the dust - two points should be brought up here - Kingsmen is about 1/3 the size of Pico and so cannot undertake the more mega-projects, they do not have the scale and no desire to do these large projects which involves a lot more complexity and manpower. Kingsmen is also much "weaker" in China compared to Pico FE, as they are still building up their presence there (with the recent announcement of a setup in Kunshan, China). Note that Pico FE's customer base and contracts are mainly China/HK-centric while Kingsmen has a core diversified geographic base (with Singapore and Malaysia taking up the bulk of Interiors). So I won't worry too much about Pico's mega new factories as the pie is growing larger for all players.

3) Kingsmen also will take on lower margin projects from time to time. The 2009 USS project was one of them - as they needed the boost to be able to manage and claim they have successfully delivered on a theme park project. KIngsmen may have to sacrifice a little margin in order to build up a solid reputation for quality and reliabilty - I am perfectly OK with this if it builds up and cements long-term relationships with potential key clients. In the theme park space, there are many developements coming up with Philippines announcing a casino/integrated resort plan, Sentosa's Kidzania and Malaysia having more plans to expand their theme parks (I read that a theme park resort company in Malaysia wants to IPO to raise funds for further expansion).

4) Finally, I won't really worry myself too much over share price movement or to fret over Kingsmen's supposedly "laggard" status with respect to the recent penny-stock rally. My view is that the rally affected many speculative companies, some with business models which may not sustain over the long-term, while others have yet to show a profit. Kingsmen, being a slow and steady company, was understandably overlooked in the mad rush for the lottery. As long as its business is growing and expanding steadily, I have no qualms remaining a shareholder.

Interesting for Pico FE to reduce their dividend though, did they mention the reasons for doing so? The thing about companies is that they are not obligated to pay a dividend at all, much less increasing dividends over the years. With you mentioning that Pico FE needs to build mega-factories in Beijing and Shanghai, perhaps they needed more of the cash for expansionary capex? Kingsmen may not require such heavy capex as their fabrication facilities are currently located in both Malaysia and Singapore and would be sufficient for their volume of work now.

Happy Lunar New Year to you!

[RBM]

Thank you for your response Musicwhiz – much appreciate the thought you have put into it. And a happy CNY to you as well.

A couple of points in response to the points you make MW:...............

1. Competitive Threat of Pico. In their financial results announcement, I note that Pico state that they managed to pick-up contracts for QUOTE a number of recurring shows, as well as several new projects UNQUOTE, which included some that I would have thought were very much bread-and-butter for Kingsmen and very much in Kingsmen’s backyard, e.g. :
- 50Plus Expo in Singapore
- APEC 2012 Second Meeting of the Committee on Trade and Investment (CTI2) in Singapore
- Singapore Garden Festival
- NEWater Visitor Centre in Singapore
- Singapore Air Show (I believe Kingsmen also got some business from this as well?)
- Port of Lost Wonder at Sentosa in Singapore
- HTC, Mercedes-Benz and Panasonic stores in Vietnam
- Bangkok International Motor Show and Motor Expo

Additionally Pico’s Exhibitions division successfully brought-in new clients such as Bloomberg, Chow Tai Fook, Goldman Sachs, SAP, SEAT and Volkswagen and they designed/built Exhibition Stands for the likes of Audi, BMW, Boss, Chevron, H&M, Huawei, Man Diesel, Maersk, P&G, Peugeot, SAP and Tudor. I would have thought these were key targets for Kingsmen as well.

South Asia, which Pico define as Singapore, Malaysia, Vietnam (Kingsmen’s backyard?) and India accounted for 27.5% of Pico’s revenues – certainly not a minor piece of business for them.......and as you correctly point out MW – Pico is about three (3) times the size of Kingsmen, at least in market cap terms.

My sense is that Pico is a formidable competitor for Kingsmen ...... and possibly becoming more so. When the pie is growing for all the companies in the space that Kingsmen and Pico operate in, and there is enough profitable work to share around, that is all fine and good ……………….. but when a cold wind blows who will be better positioned? Kingsmen or Pico?

2. Pico’s Dividend Reduction. I have reviewed Pico’s FY 2012 Financial Results Statement again and I cannot find a detailed explanation of why their full year dividend has been reduced. Of course, Pico’s FY 2011 dividend was made up of HK$c 8 plus a HK$c 4 special and they would likely argue that, excluding the special dividend, their FY 2012 dividend of HK$c 9.5 is an increase on FY 2011. I’m still disappointed with Pico's FY dividend proposal. A ~ 4% reduction in NPAT to my mind should not be associated with a ~ 21% reduction in dividend.

Pico has a robustly strong cash positive position, having a net cash balance of HK$ 939 Mln (or ~ S$ 150 Mln). And most of the CAPEX required for Pico’s new mega factories in Beijing and Shanghai has already been sunk (these factories come on stream during the coming two quarters). So I do not believe the ~ HK$ 100 Mln or so that Pico will devote to CAPEX this year will have a bearing on their BoD’s full year dividend proposal to Pico's shareholders.

As you say, as regards Kingsmen’s Final Dividend for FY 2012 ……………. lets wait and see.

One final thought for now, relating to the relative dimensions of Pico and Kingsmen.......... Pico's net cash balance of ~ S$ 150 Mln happens to be exactly the same sum as Kingsmen's market capitalisation, based on last Friday's closing share price on the SGX. Maybe, when Pico's BOD were formulating their FY dividend proposal, it was not so much preserving cash for capital that was driving their thinking ........... but rather preserving cash for a certain acquisition. Now there is a mischievous thought on my part!! May we live in interesting times.

Vested (in Kingsmen & Pico)

P.S. I will place this posting on the Pico VB thread as well.

[violinist]

So the fraud thingy is resolved, just like that?

[RBM]

Answer: No. I do not believe I suggested it was resolved or off the table in my recent postings.

But from my perspective, I don't see any point in contemplating the "fraud thingy" outcome until the CAD investigations (and probably the full audit review as well) are complete and reported out to the shareholders.

Vested

So the fraud thingy is resolved, just like that?

[Musicwhiz]

Hi RBM,

With respect to your previous post on competitive edge, my understanding is that for large projects, all players can be given a slice of the pie as it would be too large for any individual player to manage. While Pico's clients are also targets for Kingsmen, they each have their loyal customer base already and it is up to the business development department to try to win contracts away from the other. My view is that there are more than enough contracts to make everyone happy - Kingsmen's IMC division is also doing brisk business with road shows and alternative marketing for companies.

Each company would rattle off its own achievements and showcase its client base, so I would not fret too much over that. I would be interested to review the upcoming FY 2012 results to see if any progress was made on the theme park front though.

As for Kingsmen's final dividend, I am guessing it would remain at 2.5c/share. Let's wait and see.