Challenger Technologies

[D123]

My estimates of IT product and services revenue per retail space (square feet) fell in 2008 and 2009. Although 1H2010 figures seem to indicate a bounce back, it is still short of 2005 levels. The opening of the megastore in Mines, KL, which I understand is not in the central part of KL city, might be a factor, and cannibalization among its Singaporean stores might be another.

Same store sales (SSS) has been positive for the last 2 FY, according to CFO Tan. This measures sales growth for shops that have been in existence for at least a year.

As such, assuming there's indeed a decline in rev/psf, it's likely due to the setting up of new shops. These will take some months to ramp up. Unless SSS is negative, I don't see any evidence of cannibalization.

Malaysian op was running at a loss in 2009, IIRC. We'll have to wait for the AR's segmental results to see the perf for FY10.

I calculated the same store sales (stores lasting more than a year) and found that it declined from about $1800 in 2008 to $1400 in 2009. Can the CFO be referring only to Singapore stores?

bluechipstamp,
if you can give the link to the CFO's comments, it would be much appreciated.

[dydx]

To my surprise, today (18Feb11) Challenger closed at an all-time high of $0.50 - up $0.055, or 12.4%. While the total volume transacted of 242 lots is nothing to shout about, the buyers wanted the shares so badly that they cleared everything on the 'Sell' queue. Something really positive coming together with the scheduled release of FY10 (ended 31Dec10) full-year results coming Monday?

Perhaps it is timely to take a look at Challenger's H1-FY10 results announcement.....
http://info.sgx.com/webcoranncatth.nsf/V...600179798/$file/SGXNET_1H2010_Challenger.pdf?openelement

Based on the H1's numbers, I think it is almost a given that for full-year FY10, Challenger will post a revenue in excess of $210.0m, and very likely also record NP way in excess of $12.0m, as usually H2's revenue and profits should exceed H1's. Besides, the continued strength of the AUD (vs. SGD) towards 31Dec10 should also bring in a nice forex gain on Challenger's AUD-denominated financial assets.

Based on the 230.139m issued shares (as at 30Jun10), and the last done share price of $0.50, Challenger now has a market cap. of $115.0m - not exactly cheap; but for a well-established, low-risk, nicely profitable business with further growth potential, not exactly expensive either.

[bluechipstamp]

I calculated the same store sales (stores lasting more than a year) and found that it declined from about $1800 in 2008 to $1400 in 2009. Can the CFO be referring only to Singapore stores?

bluechipstamp,
if you can give the link to the CFO's comments, it would be much appreciated.

D123-san, sorry for the 1 mth late reply. I didn't see your msg until now.

There's no link, as the info is garnered from attending the last 2 AGM's. U may want to call up the comp sec for the meeting minutes, and the info should be there. I dunno why retail coys here don't publish SSS in their AR's.

BTW, how did you compute SSS? U can't unless u know the breakdown of sales betw new and old (> 12mth) stores?

Challenger now has a market cap. of $115.0m

I wonder why they're still not reporting quarterly results. They've passed $75m mkt cap long ago, and should be required to do so.

[cif5000]

BTW, how did you compute SSS? U can't unless u know the breakdown of sales betw new and old (> 12mth) stores?

And not to forget the Matrix stores. They are there not to generate top sales.

I wonder why they're still not reporting quarterly results. They've passed $75m mkt cap long ago, and should be required to do so.

From my notes.
"Expect quarterly reporting in 2012 when market cap stays consistently above 75m and SGX issues notice. One year to get ready after notice."

[memphisb]

Challenger at Funan

OPEN 24/7!

Check out the countdown at http://www.challenger.com.sg/

[dydx]

Check out the countdown at http://www.challenger.com.sg/

Having gone through the website in detail, IMHO, without any doubt, Challenger has become an innovative, multi-faceted, customer-centric, growth-oriented, and very hard-working retail enterprise! Credit must go to CEO Loo and his team!

[pianist]

hmm..24/7 hrs concept interesting..but i wonder will it add up more costs if human traffic in the middle of the night is near to zero..
i heard from friend in the US, the apple store also opens 24/7..not sure how true it is

[piggo]

makes me wonder whether that'd be profitable... What are the odds of people buying it gadgets in the middle of the night?

[memphisb]

Should have done it for Jurong Point with NTUC xtra 24/7.

Not sure about profitable and its overheads but its good idea. Don't need to rush office hours to get IT stuffs, more parking spaces and sometimes good for less minute breakdown gadgets like printers, mouse, corrupted portable hardisk, thumbdrives etc etc. Should they also include pc clinic support?

Whats important its the kinda first in SG, the Challenger store name will spread for being there for distress users and of course last minute shopping for presents. Kudos.

[lonewolf]

Buying IT products from Challenger is like buying your TV/household sets from Courts or BEST etc.

Only idiots and those who are lazy would do it. (with sincere apologies to those who patronise the above mentioned shop)

Having said that, I would still give Challenger credit cos it does fulfil a niche for the idiots and the lazy. Or perhaps those who place a greater premium on their time and dun mind paying 20-40% more for the same item.

As for the 24/7 concept, I think position it a Funan is a great idea compared to an ulu place like Jurong. A lot of people who were sceptical about Mustafa and NTUC going 24 hrs but those have proven to be a hit and I think Challenger will do alright.