Challenger Technologies

[yaosheng]

Digital Life is under Singapore retail chain, Newstead Technologies Pte Ltd. Newstead also owns the Nubox stores which operate as Apple premium resellers.

http://www.newstead.com.sg/aboutus.php
http://www.youngupstarts.com/2012/02/27/...-behavior/
http://www.youngupstarts.com/2010/09/16/...er-retail/

Anyone has comparisons between Newstead and Challenger? For example in terms of pricing, product range, staff service, location etc etc

[dydx]

Anyone has comparisons between Newstead and Challenger? For example in terms of pricing, product range, staff service, location etc etc

Go ahead, some people should do it. But I can tell you beforehand such casual comparisons would be inconclusive, because most IT retailers sell similar products at comparable prices, and their staff service level is generally good and acceptable.

The extra qualities a more successful IT retailer chain like Challenger has and which help it to prevail over the competition over time must include the store concept and layout; the provision of an entire range of customer services (in Challenger's case: the established membership scheme and benefits, the "PC Clinic" service, etc.) and its consistency; prowess in product merchandising and sourcing, and management talent and drive. The last factor is especially crucial and is best assessed by way of a face-to-face chat with CEO Mr Loo Leong Thye, which one can have by attending the coming AGM and catching the man after the formal meeting proceedings, perhaps over a cup of coffee or the buffet lunch.

[shanrui_91]

I will prefer to compare Cyberactive and Challenger then as they are placed side-by-side or opposite each other in IMM and Jurong Point. What's more surprising is that non-member price of cyber active is cheaper than the member-price of challenger (since they are so near to each other, it makes sense for me to compare prices before i buy).

perhaps as what dydx says, it is really the non-price factor that enhance their sales. The store looks nicer, there's more staff and it is bigger though I will believe that cyber active is a more cost-effective company. Membership also helps to create the discount illusion though cyberactive accepts safra card as a member discount

(not vested)

[dydx]

Challenger's FY11 (ended 31Dec11) AR makes interesting reading.....
http://info.sgx.com/listprosp.nsf/6c6be9...c002a6124/$FILE/Challenger%20Technologies%20Limited%20Annual%20Report%202011.pdf

Having reviewed the AR, I am particularly impressed by the following 2 points -
1. In FY11 Challenger's group business operation achieved/maintained a very high ROE of 45.6%.
2. Challenger's Leadership Statement which is defined/highlighted in p9 - "Our leadership vision is consistently manifested in our management’s actions, values and goals. We are committed to training and empowering our staff to contribute proactively to the development of the company. Together, we surmount challenges, chart new growth and attain greater heights."

I now look forward to the coming $0.012/share FY11 Final dividend which will be paid on 25May12, with 'XD' date fixed for 10May12.

[Mr Nobody]

The sale persons at Challenger are quite helpful and 'autonomous' ie allowed to make decisions to close a sale. But others are equally good - Best, Courts, HN. You can't invest in Best or Courts though.

[dydx]

While I am a little surprised by the 6% yoy decrease in revenue in the latest 1Q results.....
http://info.sgx.com/webcoranncatth.nsf/V...A003630C8/$file/1Q2012FinancialResults.pdf?openelement [results announcement]
http://info.sgx.com/webcoranncatth.nsf/V...A003630C8/$file/PressRelease1QFY2012Final.pdf?openelement [press releaqse]
, on the other hand I am much comforted/encouraged by the rather sharp increase in the all-imporatnt GP Margin to 20.1% (from 17.5% in 1Q-FY11, and 19.1% for full-year FY11). This could have been achieved through smarter merchandising, and/or better bulk discounts from suppliers coupled with smarter negotiation and, to a smaller extent, customers accepting Challenger's pricing model.

Well, notwithstanding the temporary slower sales in Jan/Feb, consumer demand for IT products should continue to increase over time, and Challenger - as the leading chain store for IT products in Singapore - is well placed to meet the demand, unless the present management under Mr Loo decides to slacken.

Would Mr Market choose to sell down this counter to create an opportunity for other serious longer investors to buy in cheaper?

[dydx]

Challenger will be opening yet another new store - at Causeway Point - in 4Q12.....
http://info.sgx.com/webcoranncatth.nsf/V...1003F585B/$file/New_lease_Announcement_CWP.pdf?openelement

This will be the 22nd Challenger stores in Singapore. In addition, Challenger operates another 8 small-format "Challenger Mini" outlets in Singapore, and its Malaysia Division operates 4 Challenger stores in West Malaysia.....
http://www.challenger.com.sg/locations_challenger.html

Challenger is due to announce its 2Q/1H results by 15Aug12, and I suppose we can reasonably expect another Interim dividend (Note: last FY11's Interim dividend was $0.01/share, paid 2Sep11).

[Musicwhiz]

Challenger will be opening yet another new store - at Causeway Point - in 4Q12.....
http://info.sgx.com/webcoranncatth.nsf/V...1003F585B/$file/New_lease_Announcement_CWP.pdf?openelement

This will be the 22nd Challenger stores in Singapore. In addition, Challenger operates another 8 small-format "Challenger Mini" outlets in Singapore, and its Malaysia Division operates 4 Challenger stores in West Malaysia.....
http://www.challenger.com.sg/locations_challenger.html

Challenger is due to announce its 2Q/1H results by 15Aug12, and I suppose we can reasonably expect another Interim dividend (Note: last FY11's Interim dividend was $0.01/share, paid 2Sep11).

Hi dydx,

Just curious as to how many stores closures Challenger had over the past 2 years (i.e. 2010, 2011 and 1H 2012)? I remember reading about it some time back but don't have the details. Was it explained as to why the stores were closed, and did the Group lose any money over those stores?

I've been to Challenger stores myself (Parkway Parade, VivoCity and 112 Katong) and I must say they are well-stocked and staff are friendly/helpful.

Does Challenger have a capex plan for store roll-outs in the next 1-2 years? How many more stores does it plan to open in addition to the current 22? How many more Challenger Mini stores are planned? And also wondering which segment of the population are the "Mini" stores targeted at? Is it simply a downsized smaller format of their main stores or is the product range dissimilar?

Thanks in advance.

(Not Vested)

[dydx]

I don't think Challenger in its operating history has exhibited a certain pattern of closing their stores (presumably those loss-making or less profitable ones). The last store closure was the one at Sembawang Shopping Centre in Jan12 (see my post #149). We know from its track record Challenger has over the years successfully built up the largest chain of IT products retail stores in Singapore - on a consistently profitable basis, and without raising much new capital from shareholders or incurring much external debts - and the group continues to expand steadily/carefully into West Malaysia.

Musicwhiz, I don't have all the extra details you asked on Challenger, so please ask the CFO or CEO if you really want to find out more.

[Musicwhiz]

Hi dydx,

Many thanks for the reply!

Have a great weekend.