Kingsmen Creatives

[sahara]

I'm not sure you realise just how many western investors would love to buy a business like this at 9 times. If only they knew it existed.

Hi!

Would you be able to provide some comps in USA or Europe and their valuations?

Difficult as there aren't many direct comps, but ITE Group (London listed) mostly does trade exhibitions and trades at a trailing P/E of nearly 22. Fierra Milano (listed in Italy) does trade shows and conferences and trades at nearly 15 times.

But speaking of investing in general, if Kingsmen was listed here in the UK it would be trading at closer to 20 times, no question. I could write you off a long list off worse businesses trading at richer valuations.

I'm a happy holder, plus I get to own the SGD instead of GBP!

[dydx]

Looks like one single huge trade in Kingsmen shares has just been done - 5,700,000 (yes, five point seven million) shares at S$ 0.87 per share. I cannot recall any such single large trade in Kingsmen's recent history. I have no insights on this.

Vested

That is almost 3% of Kingsmen total issue share.
Interesting.

It is indeed very heartening to see someone - without any doubt, a serious investor! - willing to fork out a cool $4.959m (before brokerage) to buy 5.7m shares or close to a 3% (based on the latest 191.646m outstanding issued shares) equity interest in Kingsmen and at a new record-high price of $0.87/share in one single transaction.

[Jacmar]

Looks like one single huge trade in Kingsmen shares has just been done - 5,700,000 (yes, five point seven million) shares at S$ 0.87 per share. I cannot recall any such single large trade in Kingsmen's recent history. I have no insights on this.

Vested

That is almost 3% of Kingsmen total issue share.
Interesting.

It is indeed very heartening to see someone - without any doubt, a serious investor! - willing to fork out a cool $4.959m (before brokerage) to buy 5.7m shares or close to a 3% (based on the latest 191.646m outstanding issued shares) equity interest in Kingsmen and at a new record-high price of $0.87/share in one single transaction.

You guys are suffering from "confirmation bias" in your thinking. To every buyer there is a seller. You got to ask why the seller is in such a hurry as to dump such a large amt on to the buyer.

[Musicwhiz]

You guys are suffering from "confirmation bias" in your thinking. To every buyer there is a seller. You got to ask why the seller is in such a hurry as to dump such a large amt on to the buyer.

That was precisely what I was thinking as well - who is the seller? I am more interested to know who the seller is, rather than the buyer.

[dydx]

You got to ask why the seller is in such a hurry as to dump such a large amt on to the buyer.

Isn't the answer very obvious here: Because there is a willing buyer who is prepared to pay a high price of $0.87/share to buy the whole lot of 5.7m shares from the seller, who is happy with the price and is in need of the money.

[Jacmar]

You got to ask why the seller is in such a hurry as to dump such a large amt on to the buyer.

Isn't the answer very obvious here: Because there is a willing buyer who is prepared to pay a high price of $0.87/share to buy the whole lot of 5.7m shares from the seller, who is happy with the price and is in need of the money.

To you, yes but to the sceptical mind no. the seller who ever he is has been a SSH for a reasonable length of time(I presume) and must have met with management many times and knows the company very well. he can at any time meet with management to learn more of the company latest developmetns including the latest scandal. I conclude maybe he doesn't like what he sees and wants to take some money off the table. now vs the buyer who just comes in from the cold.

[a74henry]

Substantial shareholder selling is not a good sign. Is he bringing a strategic shareholder to this company by selling his shares to him?

[dydx]

I really don't think the seller is Ben Soh or Simon Ong, and I will be very surprised if either one of them sold Kingsmen shares at the current price level just to raise the $5.0m for himself.

Just for the sake of discussion, when a large shareholder of Keppel Corp - it could be a local or foreign fund, or a rich man or family, or even Temasek! - sells a 3% stake in the company to another buyer at a high price in one single transaction which is done or crossed off-market, do most other shareholders start wondering in their minds for the worst of Keppel? Probably not, as it is fair to say that different people/investors buy and sell shares for different reasons, including for most sellers the motivation to take profit on a stock which the gain has met their expectations, or when they are in need of money.

I guess there is nothing wrong for investors to have a sceptical mind, but I think the main focus should be on developing a good understanding of the quality aspects and the potential of the underlying business, as well as having assessed the qualities and character of the people running the business.

[sahara]

You guys worry too much. The motives of the seller don't change the value of the business by one cent - unless you believe it's insider information of course.

[Musicwhiz]

There is a one-page write up on Kingsmen Creatives in this week's The Edge Singapore publication (March 16, 2013 issue).

I summarized some of the key highlights (my thoughts are in brackets):-

1) The Group is in serious discussions with several major residential developers in China and Myanmar to build attractions in their large-scale residential developments. (This is something new and potentially may form a new revenue and growth driver for the Company, assuming it pans out).

2) More growth should come from megamalls in Indonesia. Revenue from Indonesia rose >20% to $10.7 million.

3) Kingsmen plans to build a foothold in alternative marketing, tapping new technologies and media to help its clients promote their brands both offline and online. (Kingsmen provides marketing consultancy to their clients too, and this division has seen significant growth yoy, up +41.5% to $12.6 million. The sad thing is, though, that this division commands very poor margins).

4) The Research and Design division provides the back-end support for all the Group's projects, as Kingsmen understands how the design is to be translated from drawings into the physical look and feel. While revenue contribution was just $10.2 million, the margins are the best.

5) Benedict is not worried for the newbuilding - they have an option to extend it for 6 years, so they are taking their time to find the right location. Soh and Ong are keen to find a place in the same area, according to the article.

Erratum on the article - Article mentions a final dividend of 4c/share for a dividend yield of 5.1%. This is not correct - it should be a final dividend of 2.5c/share for a full-year dividend of 4c/share, translating into a yield of 4.65% according to theclosing price of $0.86 according to their article.