Kingsmen Creatives

[Musicwhiz]

Besides Pico & Cityneon, would it be easy for competitors from other regions to enter SG market & start competing with Kingsmen?

I think I covered this point on my blog and it is also found in this thread (read through all 19 pages if you have time).

The basic issue here is that there are already many smaller contractors who do fitting out for a wide range of retail shops etc, but these are small scale and they have their own market segment to cater to. Kingsmen competes more on high quality and professionalism and being able to do roll-out Management services for international clients, so this is an edge for them. Being in this industry for 35 years also helps.

For MICE side, it's hard for a new competitor to come in as these are mega-events which require track record, adequate staff and also time/commitment which smaller firms may not possess.

[Thriftville]

Besides Pico & Cityneon, would it be easy for competitors from other regions to enter SG market & start competing with Kingsmen?

I think I covered this point on my blog and it is also found in this thread (read through all 19 pages if you have time).

The basic issue here is that there are already many smaller contractors who do fitting out for a wide range of retail shops etc, but these are small scale and they have their own market segment to cater to. Kingsmen competes more on high quality and professionalism and being able to do roll-out Management services for international clients, so this is an edge for them. Being in this industry for 35 years also helps.

For MICE side, it's hard for a new competitor to come in as these are mega-events which require track record, adequate staff and also time/commitment which smaller firms may not possess.

Thanks for your quick reply! Actually I'm wondering whether there are companies much larger & experienced than Kingsmen in the US, Europe, that may come to SG to compete?

[Musicwhiz]

Thanks for your quick reply! Actually I'm wondering whether there are companies much larger & experienced than Kingsmen in the US, Europe, that may come to SG to compete?

My personal view is that this is unlikely to happen, though there is a possibility. Most of the larger event companies in the USA and UK already have an established base there and also their own dedicated clientele. It will be hard to break into the Asian market due to the afore-mentioned reasons and also because their cost base is still relatively higher compared to companies operating in Hong Kong (Pico) and Singapore (Kingsmen and Cityneon).

Take note that Kingsmen is actually "breaking into" the US and Europe market by doing fixtures export! This is because costs are much lower when fabrication is done in Malaysian factories (this includes cost of labour and also capital equipment) and these fixtures can be manufactured at a lower cost; and so this makes it attractive to companies in USA and Europe who are hoping to cut costs.

[Jon-san]

Would they be considered a takeover target then? Despite all their expertise and market share, the valuation of the company remains fairly low. Mightn't it be possible for a larger company to come in and buyover KC as a shortcut to establishing a foothold here? Especially considering that KC's management has already hinted that they would be willing to sell out if the price is right. Anyone knows offhand who are the big names in US/Europe?

[Thriftville]

Thanks for your quick reply! Actually I'm wondering whether there are companies much larger & experienced than Kingsmen in the US, Europe, that may come to SG to compete?

My personal view is that this is unlikely to happen, though there is a possibility. Most of the larger event companies in the USA and UK already have an established base there and also their own dedicated clientele. It will be hard to break into the Asian market due to the afore-mentioned reasons and also because their cost base is still relatively higher compared to companies operating in Hong Kong (Pico) and Singapore (Kingsmen and Cityneon).

Take note that Kingsmen is actually "breaking into" the US and Europe market by doing fixtures export! This is because costs are much lower when fabrication is done in Malaysian factories (this includes cost of labour and also capital equipment) and these fixtures can be manufactured at a lower cost; and so this makes it attractive to companies in USA and Europe who are hoping to cut costs.

Oh great answer! I think that makes me feel more comfortable adding Kingsmen into my shortlist.

[valuestalker]

Wondering why they decided not to announce the contracts won by them?

I guess the idea is to avoid more competition?
but in the other hand, remove the catalyst that comes along with the good news.

IMO, it is not really a bad thing if you are investing for the business and not share price.
But also, it lacks of visibility for investors or to-be-investors.

[Musicwhiz]

Wondering why they decided not to announce the contracts won by them?

But also, it lacks of visibility for investors or to-be-investors.

I've asked Andrew Cheng the GM on this. His reply was that they would like to, but many of their projects (especially those in the MICE segment, which is their M&E Division, as well as thematic/scenic) are tied to Governments and so the contract value has to remain confidential as they are bound by the T&C not to disclose it. Also, I guess with them clinching so many smaller or medium-sized events it may not make practical sense to keep announcing these as they are part of the ordinary course of business.

In terms of visibility, I view Kingsmen's Interiors business as more of a steady revenue stream rather than contract-based, as there will always be fitting outs required and international brands are always expanding and either opening new outlets or refurbishing existing ones. For the MICe segment, we can take cues from the general industry trend which is - growing within SEA region.

As it is, I am also going for the Kingsmen AGM next Wed April 27 to find out more about their prospects for the mediun-term and business contracts secured thus far.

[valuestalker]

Few interesting things (at least for me) that i have noticed from their AR 2010 (please do correct me if i perceived it wrongly):
1. Anthony Chong's position is a level higher than other MD? a potential successor?
He is entitled for 2-5% of PBT of few kingsmen subsidiaries, at least 2 of them mentioned in the AR.

2. Top 20 Shareholders make up a nice reading for me, as it consists mostly Kingsmen's executive directors.
3. Receivables past due but NOT impaired has been doubled in 2010 from 2009.

[Musicwhiz]

Few interesting things (at least for me) that i have noticed from their AR 2010 (please do correct me if i perceived it wrongly):
1. Anthony Chong's position is a level higher than other MD? a potential successor?
He is entitled for 2-5% of PBT of few kingsmen subsidiaries, at least 2 of them mentioned in the AR.

2. Top 20 Shareholders make up a nice reading for me, as it consists mostly Kingsmen's executive directors.
3. Receivables past due but NOT impaired has been doubled in 2010 from 2009.

Hi, noted with thanks.

I think the 2-5% PBT is an incentive scheme to spur him to do better for the Subsidiaries. Nothing too unusual there.

Top 20 Shareholders yes, I guess they are holding on tightly to their shares for the upcoming dividend.

Receivables Level can be deceiving as evidenced by FY 2009 when receivables climbed due to the timing differences in collecting for the USS contract. Since these are NOT impaired, I would not worry too much and just treat it as a timing difference.

[valuestalker]

Few interesting things (at least for me) that i have noticed from their AR 2010 (please do correct me if i perceived it wrongly):
1. Anthony Chong's position is a level higher than other MD? a potential successor?
He is entitled for 2-5% of PBT of few kingsmen subsidiaries, at least 2 of them mentioned in the AR.

2. Top 20 Shareholders make up a nice reading for me, as it consists mostly Kingsmen's executive directors.
3. Receivables past due but NOT impaired has been doubled in 2010 from 2009.

Hi, noted with thanks.

I think the 2-5% PBT is an incentive scheme to spur him to do better for the Subsidiaries. Nothing too unusual there.

Top 20 Shareholders yes, I guess they are holding on tightly to their shares for the upcoming dividend.

Receivables Level can be deceiving as evidenced by FY 2009 when receivables climbed due to the timing differences in collecting for the USS contract. Since these are NOT impaired, I would not worry too much and just treat it as a timing difference.

Hi MW,

Thanks for your always insightful info on this company.
A really good Kingsmen ambassador. (kidding).
For point 1, yes i agree with you, i am just speculating whether he is the potential successor because other MD are not entitled to the incentive.

I am quite worried about point 3 though.
Past due 90days but not impaired has been doubled from 2009.
not sure whether it is related to the arbitration?