Epicentre Holdings

(21-03-2016, 12:05 AM)Big Toe Wrote: When valuing a company, we see what are its strengths, where the future profits are going to come from, how easy it is to duplicate its business, whether business can be sustainable in the long run etc It is much easier to spot a bad company from a good one. Epi centre is an easy one, it is not very different from any other Apple reseller, there is nothing to differentiate itself from its competitors, it does not own rights to anything as far as I know, there is little or no value taht can be associated to its business right now, its margins show how much pricing power Apple has over its re-sellers/vendors. A good business will spend one dollar and get ten back. A bad business will spend 10 dollars and get 5 back.

I would be very worried if I am the boss of Epicentre now. 2 Things he could do 1. Stick to the current path, expand margin, control cost. 2. Go into a new business, preferably related business because the current model is not going to last, with or without apple setting up its own store.

The coupon rate itself is already exceeding the gross margins about 9 to 10%, according to the 2015 annual report. It means that Epicentre will have to sell more goods to cover cost, as compared to take supposedly cheaper term loans from the banks. 

I am quite doubtful if it can even sustain higher sales volumes. The sales trend on the 2015 report reflects a somewhat steady "flat" pattern over the past 5 years. 

If the company head towards doing more of the same, it will be very worrying. It is literally more convenient to order phone accessories on qoo10, ebay and other online platforms. As for mobile phone, there are many alternatives today compared to 5 over years ago. 

Apple offering a low price phone is in a way diluting the margins and the premium attached on apple products. "Commoditising" may not be the best move, but may be the most viable move forward.

Epicentre faces real challenges with exchange risk (not sure how severe), manpower cost, rental costs and threat of substitutes. I wonder how heavily hedged they are. It will be scary if they pay in USD and sell in SGD. The risk to margins is very real. Then again, i have not read the report in great detail. 

Not vested for now and not likely to be vested in the future.

^^ It's not about the environment... the business model is flawed where your supplier is your biggest competitor and the telcos are their channels. Plus no price flexibility. Probably the worst version of brick / motar vs internet model.

(22-03-2016, 09:19 AM)CityFarmer Wrote: More info on Epicentre crowd-funding, from BT.

Epicentre first S'pore-listed firm to use p2p lending

...
The debt is backed by a corporate guarantee from Epicentre Holdings, which swung into a net loss for the first half of fiscal 2016. Corporate guarantees are not common as most peer-to-peer loans are backed by personal guarantees. The debt will be repaid through the sale of merchandise, according to a summary of the deal seen by The Business Times.

One tranche has an option for Epicentre to repay the debt earlier than 12 months, through what is known as a callable note.
...
Source: Business Times

Err what's corporate guarantee? Meaning IOU aka "Trust Me I'm an ACRA entity"? If the chairman gives personal guarantee at least it means something

It is interesting for me that Epicentre took the model of being Apple's exclusive retailer. What happened in 2003 onward was that it had the first mover advantage, being the seller of then successful ipod and then iphones (challenger was the other retail shop which sold ipods iirc). However others began to see the perks and the advantage was eroded.

Now the company has been trying to find new avenues of business with the recent MOU failing. Its very true that Epicentre has to venture into new business as the old one is being gobbled up by Telecos, challenger and new re sellers. And apple itself is now competing here

Given that the company still has positive tangible book value, there is some worth for short term bond holders; but in the long run if the company keeps burning profits/cash, you and I know its value. As retail investors living in a harsh environment, I do not mind giving such loan shark rates as the investments are in equal monthly repayment which means capital is returned monthly while I watch Epic bleed as it attempts to turn around. It Survives good for me, if it dies, just asset strip its sell able inventories.

Hard truth

(22-03-2016, 10:24 AM)specuvestor Wrote: Err what's corporate guarantee? Meaning IOU aka "Trust Me I'm an ACRA entity"? If the chairman gives personal guarantee at least it means something

Yes, corporate guarantee, with no collateral secured, carries no meaning to me too. IIRC, unsecured bank loan to SME, might require personal guarantee. 

Used to own this stock until Steve Jobs pass away.

Changes in shareholding.

On 18 May 2016 Leow Kok Meng became a substantial shareholder after acquisition of 24,000,000 shares for a consideration of SGD 4,000,000,
or S$0.16 per share. This represents 25.73% of total number of voting shares.

On 31 May 2016 Lim Tiong Hian became a substantial shareholder after acquisition of 23,025,800 shares for a consideration of SGD 3,500,000,
circa S$0.152 per share. This represents 24.686% of total number of voting shares.

As at 31 May 2016 Mr Jimmy Fong Teck Loon (former controlling shareholder) held nil share.

Considering he and his wife have been drawing close to 1 mil average every financial year and now are cashing out 7.5 mil, it seems Epicentre has been a good investment for them. I wonder what these 2 new SSH see in Epicentre to spur them to invest. To me, the probable value is in its ppotential shell company status

http://infopub.sgx.com/FileOpen/FY2016%2...eID=419390

Finance cost has increased greatly and I think it will stay in the 500k region. Staff cost has increased to my surprise.

Results is pretty bad and I think creditors may be getting worried if they will get their full principal. While there is a proposed placement of 11.5 million, my question is who will pay for such a company when it is likely a company with negative equity upon completion of placement

http://infopub.sgx.com/FileOpen/EHL%20-%...eID=438669

Of key importance is that Epicentre was able to raise proceeds through the issuance of new shares

Its business has been burning cash; however with 5.4 mil cash influx, it enables Epicentre to repay its P2P loans maturing on April/May 2017.

<vested in Epicentre P2P loan>

CY09, i applause u for being brave to lend to P2P loans...
after epicentre pays back ur p2p loan, and IF they wishes to loan again, will you lend to them again?