Kingsmen Creatives – New Stock Added!

kingsmen creatives logo

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“Seems like there’s a lot of tech stocks in your portfolio,” Derek from Finance.sg remarked once when we were at an Evening with AK.

 

I don’t really discriminate stocks into tech sector or whatever sector.  As long as the business makes money, and makes sense, I like it.  However, that comment struck a chord with me and I really did re-look at my portfolio.

 

I would like to talk more about tech stocks but I would save that for another loooonnngg post.  One of the major risks about tech is their heavy dependence on macro trends and constant innovation within the company.  Once I realised my overexposure to this risk, I decided to scout for other stocks to diversify into.  Stocks that are not so dependent on technology or heavy innovation or macro trends.

 

Kingsmen Creatives seem to fit the bill.  To sum it up in one sentence, Kingsmen Creatives has a prudent management that seems to be able to deliver results in an industry saturated with less able incumbents.

 

I opened a tiny position in Kingsmen Creatives at a price of $0.805.  Tiny position so I don’t stress my cashflow too much. (I got volatile and unpredictable income unlike most of you who have stable jobs.)  Tiny position so that I am compelled to learn and understand more about the company and industry over time.  Also, I am still hoping that the bear market bleeds out the stocks even more to give me a cheaper price!  (Current PE is 10.)

 

KingsmenCreative Share Price Chart   5MZ.SI   Yahoo  Singapore Finance

Kingsmen Creative experienced a recent fall in share price due to a 26.5% drop in revenue in its Retail and Corporate Interior’s Division. (S$56.6 million in 1H 2015, a 26.5% decrease from S$77.0 million in 1H 2014)

 

From the latest 1H2015 Press Release:

“The decrease was due to soft demand for interior design and fit-out services from the high-end luxury retail segment. The division, however, continues to see good demand for its services from the affordable luxury and travel retail segments. Key accounts for this division include Aldo, Michael Kors, Shilla Travel Retail, and Tiffany & Co.”

 

The high-end luxury retail segment is affected by slowing demand and general weakness in China.

 

I don’t think this problem is a permanent one.  The industry may probably take some time to tide through its troubles and get the ball rolling again.  An investor friend of mine pointed out that “Luxury goods appeal to human vanity and the current slowdown in the luxury segment may probably just weed out the weaker or less adaptable players.”

 

Besides, Kingsmen is still able to adapt and get its revenue from other areas like Exhibitions & Museums or from the more affordable retail segments.

 

Sure they may not enjoy high margins, but… as the Hokkien saying goes:  Bo He Jiak Hei Ma Ho!  ( No fish, eat prawns also can!)

 

Investor Relations  Financials Highlights

 

Risks

 

From my scuttle-butting or research via word-of-mouth, it seems like the only other established player that can match Kingsmen Creatives in Singapore right now is probably Pico Inc.  Other than that, the industry is made up of mostly smaller players that don’t really have the design or architectural capabilities of Kingsmen Creatives.

 

However, the management of Kingsmen have highlighted that their biggest risks would be western MICE(meeting, incentives, conferences, events) companies making inroads into Asia.  That would be something to look out for.

 

Another risk often cited about Kingsmen is founder risks.  That also is something to take note of almost every company.  In the event that the founder/s leaves, we must watch if the replacement is able to continue to execute as well as the original founder/s.  (Just like how the whole world is watching Tim Cook of Apple….)

 

kingsmen creatives founders

 

Diversification Play

 

Kingsmen Creatives is more of a diversification stock for my portfolio.  I am looking to spread my bets outside of all my aggressive tech stocks like GoPro, Facebook, LinkedIn, PayPal, etc.  Although technology may change, the creative minds of architects and designers are still needed to create wonderful structures and installations.  And Kingsmen Creatives, with their track record of delivering, may prove to be best in the Asian market for now.

 

 

Other Resources

 

These blogs provide a more in-depth analysis of Kingsmen Creatives.  So you can refer to them if you are interested to learn more about the company:

MusicWhiz

A Path to Forever Financial Freedom

 

 

[ 3  More Undervalued Stocks to be Revealed ]

 

*** HAPPENING ON SATURDAY, 17 OCTOBER 2015!****

600 investors gathering behind closed doors for 1 full day of intensive learning and discussion.

I have gotten my tickets to the Invest X Congress 2015.  And you can join me too.

Victor and Rusmin from the Fifth Person will be providing a detailed analysis of 3 stocks.  All you need to do is to take some notes!

Other speakers include:

AK, famous blogger of ASSI, the man who earns $150K in yearly dividends.

Tay Jun Hao of the Asia Report, who manages his family portfolio at annualised returns of mind-blowing 27%

Topics that will be covered:

– Value-Growth Investing

– Value Investing

– Income Investing

– Portfolio Management

Tickets are Running out.  Click on the image below to get them now!

Invest X Congress

12 Comments

  1. B

    Hi Jerry

    Thanks for mentioning my link.

    Congrats on the buy there. I think it’s an overall solid company who just got themselves stuck at a bad time. The net bottomline margin is a shed away from mistakes so it’s something they’ve got to be very careful on when budgeting for things. Other than that, I think consumer retail and luxury segment will pick up again once consumer confidence is up.

    Reply
    1. The Bf (Post author)

      Your article and Musicwhiz’s article are very comprehensive!

      Reply
  2. joel

    design studio is a similar company that looks good too

    Reply
    1. The Bf (Post author)

      Looks interesting. Got any articles to link to?

      Reply
  3. My Sweet Retirement

    Hi Jerry,

    I also notice you are quite heavy vested in tech stocks after reading your blog.

    I was almost tempted to invest in GoPro after reading your blog. Seems price of GoPro is beaten down by the recent crisis.

    Kingsmen Creatives is also on my watch list. Will probably invest once I done my own analysis and research.

    Reply
    1. The Bf (Post author)

      Hi there,

      I am still super bullish on GPRO. It has dropped due to Ambarella saying chip sales will be slower in the next quarter. Now GPRO is looking even cheaper… but I have to refrain from buying because I am heavily invested in it and I need to diversify.

      🙁

      Reply
  4. Pingback: Kingsmen Creatives Ltd (My Take) | A Pen Quotes

  5. Pingback: Kingsmen Creatives Ltd (My Take)

  6. Derek

    Hi Jerry,

    不管黑貓白貓,能赚钱都是好貓。:)

    Reply
    1. The Bf (Post author)

      That’s right!

      Reply
  7. Sureshkumar

    Are you averaging down. now the price is 65C.

    Reply
    1. Jerry (Post author)

      Hi Suresh,

      I have actually averaged down few months back. I have stopped now as it is already a big part of my portfolio. Don’t wanna over concentrate my portfolio on this 1 stock.

      Reply

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