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Hey all out there, any one to enlighten me what are the business of challenger. I seem to have confidence in this company.

(15-10-2013, 10:24 PM)8ALEX8 Wrote: [ -> ]Hey all out there, any one to enlighten me what are the business of challenger. I seem to have confidence in this company.

Maybe you would like to first let us know why do you have confident in this company?

(vested)

This company seem to have alot of growth ahead down the next few years. I mean challenger is like the main place pple goes to to get their electronic gadgets and tech is something that everyone is always chasing after. This is sort of like a recurring business, something like fashion that doesnt dies off. I seem to see more and more challenger shops opening around with those mega and mini ones.

Hi Alex, if you look over the shoulder at Challenger's past results, yes, it had been a great growth story (RoE 30-40+%; growth in net assets, revenue, net profit margins around 5%).

When buying stocks, whether the price we paid is low or high depends on how the company develops going forward and how Mr Market prices it. How much future growth is already factored into current price you think and u reckon it can match those priced-in expectations?

From your comments, it seems like you believe that the growth will persist. Questions for u to ponder over - how much are you willing to pay for growth? How about the possible downside risks such as rising rentals, pipeline of new outlets given size of local market?

(15-10-2013, 11:04 PM)8ALEX8 Wrote: [ -> ]This company seem to have alot of growth ahead down the next few years. I mean challenger is like the main place pple goes to to get their electronic gadgets and tech is something that everyone is always chasing after. This is sort of like a recurring business, something like fashion that doesnt dies off. I seem to see more and more challenger shops opening around with those mega and mini ones.

That is one way to find a good company to invest in.

In addition, you will need to read their annual reports to see if the money that you will be paying for the company is reasonable.

Annual reports can be found at companies' website under investor relations.

I like challenger, its ROE is pretty high at over 30%
I think its more of a growth stock

currently its at about 11 to 12 times earnings, still cheap I think... but if it sells above 15 times earnings I will not buy

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btw guys I would like to ask

how come challenger the liquidity is so poor and also no analyst coverage

thanks

What attracted me to this stock when I bought it more than 5 years ago, was firstly, like what 8Alex8 ha said, I noticed Challenger shops doing decently at Funan Centre and also popping up at the neighbourhood malls. It is a trusted established local brand. This, coupled with good yearly cash flow from operations, zero long term debt, solid cash pile, consistent profit margins, good dividend payouts - I gathered that this mum & pup IT business is doing decently. Thirdly, it is an inexpensive stock that had not attracted much notice from analysts. Hence, my buy decision. But I must admit that I had omitted the future forward-looking analysis part in my buy decision.

I avoid hot stocks that hit headline news, because by the time I get to know about it on the papers, the price would have been chased up already & I don't make. Late bird catches no worms.

I think a large chunk of the shares are held by Leong Thye Loo & the directors themselves, hence the thin trading of this stock?

(16-10-2013, 09:01 AM)riverfish Wrote: [ -> ]What attracted me to this stock when I bought it more than 5 years ago, was firstly, like what 8Alex8 ha said, I noticed Challenger shops doing decently at Funan Centre and also popping up at the neighbourhood malls. It is a trusted established local brand. This, coupled with good yearly cash flow from operations, zero long term debt, solid cash pile, consistent profit margins, good dividend payouts - I gathered that this mum & pup IT business is doing decently. Thirdly, it is an inexpensive stock that had not attracted much notice from analysts. Hence, my buy decision. But I must admit that I had omitted the future forward-looking analysis part in my buy decision.

I avoid hot stocks that hit headline news, because by the time I get to know about it on the papers, the price would have been chased up already & I don't make. Late bird catches no worms.

I think a large chunk of the shares are held by Leong Thye Loo & the directors themselves, hence the thin trading of this stock?

When I got vested with this stock, it was for all the same reasons as you have mentioned above. What worries me now is the gradual decline in their profit margin. To me 5% is a decent margin but their's is slightly less than 4%.

I wonder whether the decline in their margin is due to their Valore products. Valore seems to me like a high volume, low profit kinda product, and the managaments seems to be marketing Valore products quite aggressively.

Would anyone of you guys buy Valore? I bought their portable battery for my phone. I like the design, and it is functional.

(16-10-2013, 09:20 AM)natnavi Wrote: [ -> ]

(16-10-2013, 09:01 AM)riverfish Wrote: [ -> ]What attracted me to this stock when I bought it more than 5 years ago, was firstly, like what 8Alex8 ha said, I noticed Challenger shops doing decently at Funan Centre and also popping up at the neighbourhood malls. It is a trusted established local brand. This, coupled with good yearly cash flow from operations, zero long term debt, solid cash pile, consistent profit margins, good dividend payouts - I gathered that this mum & pup IT business is doing decently. Thirdly, it is an inexpensive stock that had not attracted much notice from analysts. Hence, my buy decision. But I must admit that I had omitted the future forward-looking analysis part in my buy decision.

I avoid hot stocks that hit headline news, because by the time I get to know about it on the papers, the price would have been chased up already & I don't make. Late bird catches no worms.

I think a large chunk of the shares are held by Leong Thye Loo & the directors themselves, hence the thin trading of this stock?

When I got vested with this stock, it was for all the same reasons as you have mentioned above. What worries me now is the gradual decline in their profit margin. To me 5% is a decent margin but their's is slightly less than 4%.

I wonder whether the decline in their margin is due to their Valore products. Valore seems to me like a high volume, low profit kinda product, and the managaments seems to be marketing Valore products quite aggressively.

Would anyone of you guys buy Valore? I bought their portable battery for my phone. I like the design, and it is functional.

The declines on NPM in the last few years were due to increase of COGS. The gross margin declining from 22% (FY2009) to 19% (FY2012). NPM dropped only 1% from 5.8% (FY2009) to 4.8% (FY2012), which showed that margin compressed by supplier was mitigated by more efficient operation.

There are signs that the margin will improved, base on quarterly report of FY2013.

One of the advantages of the company, is its low or negative CCC. It means little capital needed to expand. But the CCC number was deteriorating for the past few years, mainly due to faster payment to suppliers.

Malaysia's revenue has grown from FY2008 of 1.4 mil to 19.4 mil in FY2012. There are still more room to growth in Malaysia, IMO

(vested)

(16-10-2013, 09:01 AM)riverfish Wrote: [ -> ]What attracted me to this stock when I bought it more than 5 years ago, was firstly, like what 8Alex8 ha said, I noticed Challenger shops doing decently at Funan Centre and also popping up at the neighbourhood malls.

Beneficial for retail REITs?