Sakae

[CY09]

I do think Mr Douglas has lost the plot to this question. Mcd focuses on food and the way they improve is innovate products and focus on their operational processes. Starbucks too try to go cyber payment but that's because they want to complement the payment module for their food.

Hence i feel this is the sign that sakae management is misguided

[Big Toe]

It is problem faced by many small-medium sized enterprise. Market share is slowly eroded away by new comers.
So, instead of upping their game, they try to venture into something that may be out of their core competence.
Trying many things and seeing which one sticks. Usually it does not pan out.
In this time and age, a company needs to be on top of their game to thrive.
At least in the F&B scene, there are a lot of hungry young talent trying to carve a name for themselves.
Douglas Foo has ambition, that's a good thing but he is no Elon Mask.

[kikababoo]

It’s clear something is wrong when Sakae venture into cryptocurrency...

[Triple70]

This is not a F&B company?

http://www.sakaeholdings.com/about

Looking at the 5yr chart.. certainly looks “distracted”.

[mobo]

During the course of my work, I have interacted with numerous founders and CEOs of local SMEs and here’s my extrapolated opinion of what likely has happened to Sakae and Douglas Foo. In a sense, he’s not alone with the same predicament, it is VERY common in the SME space.
 
The gist of it is when the founder(s) were younger, the entrepreneurial spirit was there to do everything to make it work. That means the few key people took heavy financial and emotional toll in terms of stress, setbacks and work hours. The emotional crutch that helped them through such difficult times was the belief that they just needed to get the train on track and financial and emotional rewards will flow in much more easily thereafter.
 
The problem is this underlying premise is untrue in most cases. Even if you belong to the minority who succeed like Sakae, life after that is not a bed of roses. You end up constantly having to defend your turf and under pressure to improve and grow the business, otherwise you still end up kaput in the end. This is what Buffet sometimes describes as constant assaults on economic moats.
 
This is where many original entrepreneurs fail the litmus test. They run out of energy and passion to continue ploughing because this is not what they “signed up for” when they took all that shiit earlier on. They feel that they’ve already done all that can be done during the early days and feel repulsed at the notion of continuing this cycle perpetually.
 
Many then try to take the shortcut out. They try to milk whatever they can from the existing business and try out all sorts of “exciting” alternative opportunities. It will be self-rationalized as diversifying income sources and lowering enterprise risk, but what they are really looking for is something new and easy to make money. There is no shortage of brokers happy to introduce all sorts of deals and business opportunities to these guys who happily lap it up.
 
Granted some small minority might succeed, but most will end up squandering not because of the investment opportunities per se, but due to the fact that they are just unable to inject the same enthusiasm and hard work into the new business as they are ultimately see it as a means to achieve the “happily ever after” business ending. They approach the whole venture more like a passive retail investor with a brokerage account rather than an active businessman.

[Big Toe]

Completely agree with Mobo. Most people including business owners see business as a destination, where hardwork will pay off in the end.
The truth is that even for the minority who achieved success, it is difficult to keep the success going. It is tough keeping up, the business environment is in a constant state of flux. It is an on-going journey. Amazon tackles this by having the mentality of a day 1 company. GE on the other hand, has the mentality of a 100 year old company that has grown too large, too comfortable. I have seen first hand how some of these large and old MNCs squander money away even when they are posting losses. The top executives dont care, it's not THEIR business and they are still very comfortable with their salary package and perks.

Also in this time and age, you have competition that is out to disrupt and the first 3-5 years will see these new players having no regard for profit. They want to grow market share at all cost, with the backing of large institutions. Competing head-on would be a terrible mistake.

[morten]

Good points above.

The entrepreneurs that started well in SG will naturally proceed to expand outside SG... Outside their comfort zone .

This is then when many of them realized they are no match against the competition in foreign soil.

Disheartened that their products or svcs cannot be a Creative or Breadtalk, many of them sink back to SG and the unexciting basics.

Cashed up, often they will get into real estates (and leverage). For many years now , real estates has been a kind refuge and playground for the rich (unlike the treacherous nature of businesses and stock mkts). The leveraged returns magnify the returns (and addiction).

Real estate investments are a poor contribution to general economy and it has created a nation littered with lazy, unimaginative and unproductive landlords. Pretty much what SG is all about today.

Sent from my CLT-L29 using Tapatalk

[Wildreamz]

Good points above.

The entrepreneurs that started well in SG will naturally proceed to expand outside SG... Outside their comfort zone  .

This is then when many of them realized they are no match against the competition in foreign soil.

Disheartened that their products or svcs cannot be a Creative or Breadtalk, many of them sink back to SG and the unexciting basics.

Cashed up, often they will get into real estates (and leverage). For many years now , real estates has been a kind refuge and playground for the rich (unlike the treacherous nature of businesses and stock mkts). The leveraged returns magnify the returns (and addiction).

Real estate investments are a poor contribution to general economy and it has created a nation littered with lazy, unimaginative and unproductive landlords. Pretty much what SG is all about today.  

Sent from my CLT-L29 using Tapatalk

This is such a great post and probably should be shared in this thread as well: https://www.valuebuddies.com/thread-9024-page-4.html

[dreamybear]

3Q2018 results are out; profit of $75,000. However, cash at 30/09/2018 : 1.8 million vs cash at 30/06/2018 : 4.1 million

More info at infopub.sgx.com/FileOpen/Announcement - Financial Results as at 30 Sep 2018.ashx?App=Announcement&FileID=534089

In other news, Mr Foo selling investment bungalow for 16 million.
(https://www.tnp.sg/news/business/sakae-h...alow-1613m)

If situation doesn't improve, I guess company may decide on a rights issue to shore up cash.

[new-comer1]

More cost cutting in the future ?