Old Chang Kee

[valuehunter]

I remember reading a thread on OCK when the forum was afralug.

I observe with interest the long queues at many of the OCK stores i happen to pass by. There is a pretty good mix of customers, ranging from young kids to the older folks. Bearing in mind these young kids will eventually grow up and continue buying OCK finger food which are largely affordable, it seems to be a reasonable and sustainable business to buy into for the long term. It is also a cash generative business.

One area of concern could be the low margins, which could be exacerbated by high raw material costs. However the business has been around for so long, I'm quite sure the management would take prudent steps to mitigate this risk. What are your views of this company?

[valuehunter]

OCK has recently increased the prices of some of its finger food (e.g. curry puff, chicken wings, etc.) by 10 cents (8.3%) to 20 cents (16.7%) respectively. It remains to be seen how this can impact sales and ease the pressure on its margins. At the moment at least, it is perhaps comforting that people are still queueing to buy its products. Maybe people don't feel the pinch when it is only a 10 to 20 cents absolute increase.

[pianist]

i have some OCK warrants, and thinking whether to exercise the warrants bought at 0.05 with an exercise price of 0.10, the stock price now around the range of 0.30..How do I exercise the warrants? can i ask anyone who has exercised warrants before on the execution part? i have a cheque book with cimb, i just wonder if this cheque book is ok for making payment to cdp for exercising the warrant. i ask because i read somewhere that personal cheque book are not recognised by cdp?

[yeokiwi]

Cheque and cash will not be accepted.

You have to get a cashier order from the bank to exercise warrants. If you have DBS bank account and internet banking, you can order cashier order online for free. For other banks, you may have to pay a few dollars to get a cashier order.

You will need to contact the company that handles OCK warrant and I think in this case, it is boardroom to get the form for warrant conversion. Fill in the form and submit the cashier order together and wait for the warrant conversion.

[pianist]

yeokiwi thanks for & appreciate the reply..hmm..didnt know dbs offer such online CO for free..
do u think is wise to exercise? i am thinkin if i dun exercise i might miss out on the nice dividends..

[yeokiwi]

Is it wise to exercise?
That's a more difficult question.

If you think that OCK is a good company and willing to increase your stake in the company, you should exercise the warrants.
I think the rationale for exercising warrants is the same as buying a share. You must calculate the opportunity cost of the money that is to be used to exercise the warrants.

Alternatively, if you have no wish to increase your stake in the company, you can also sell away the warrants.

If you really want to have the dividend, you probably can exercise the warrants just before the dividend goes XD.

[mottainai]

yeokiwi thanks for & appreciate the reply..hmm..didnt know dbs offer such online CO for free..
do u think is wise to exercise? i am thinkin if i dun exercise i might miss out on the nice dividends..

Why do you want to exercise the warrants when no dividend payout is imminent for OCK? Company warrants have time value and can appreciate in value along with the mother share.

[pianist]

thanks for e comments..i guess u r rite..there is no rush in doing so..
btw i just saw old chang kee's chicken wing now selling at $1.40 up 20cents..
i am just wondering if they have the pricing power for their chicken wing.
to make a comparison of today market price for chicken wing

可爱鸡's barbecued/fried wing found in many foodcourt is selling for $1.20 per piece
brewed dark soy chicken wing at many eating places is selling for $1.20 per piece
ikea's popular chicken wing at its restaurant is selling for $2.80 for 2 piece, with smaller price per pc for higher quantity

personally if Old Chang Kee can make wing like ikea, i dun mind paying $1.40 per piece, or in the long run they should have a similar pricing strategy like ikea - rewarding customer more discount for bigger quantity purchase

[valuehunter]

personally if Old Chang Kee can make wing like ikea, i dun mind paying $1.40 per piece, or in the long run they should have a similar pricing strategy like ikea - rewarding customer more discount for bigger quantity purchase

To the best of my knowledge, OCK does have such promotions on and off (and quite regularly too), though this may not be limited to just chicken wings. For example, the latest promotion is for the new range of puffs (Green Curry'O & BBQ'O) going at 2 for $2.80 (usual price: 1 for $1.50).

[Musicwhiz]

OK, would someone care to tell me what is a "Green Curry 'O"? What's the filling inside it? There's no info at all when I went to the OCK store today. And yes the promo says $2.80 for BBQ O and Green Curry O but where's the info on these two new puffs? Frustrating to say the least.

And another grouse (for me as a customer but the shareholders will be jubilant) - the normal "Curry O" has increased in price yet again from $1.20 to $1.30 (an 8.3% increase). Last I remembered inflation was only 3.4%. Why can't they increase it to $1.25 or something? This is too much!

(FYI: I am slowly boycotting OCK in favour of Provence and Jollibean, for snacks).