Epicentre Holdings

actually, i believe apple products command the highest margins in the mobile handset industry.

with regards to epicentre, it is really a proxy to apple. i don't see apple continuing to dominate the market as it has today, and as such i'm not sure of epicentre's fate when that happens. i'm of the opinion that its current price has ran far far ahead of its valuation.

(13-05-2011, 03:42 PM)karlmarx Wrote: actually, i believe apple products command the highest margins in the mobile handset industry.

with regards to epicentre, it is really a proxy to apple. i don't see apple continuing to dominate the market as it has today, and as such i'm not sure of epicentre's fate when that happens. i'm of the opinion that its current price has ran far far ahead of its valuation.

it is probably more accurate to say that apple's margins are the highest in the industry.

Margins for apple retailers are another matter altogether.

Well, Epicentre is riding on the coattails of Apple. So as long as Apple is popular, people will pay for overpriced products made in china by taiwanese companies like Hon Hai.

But Steve Jobs dies and Apple's future become cloudy, then it is a problem whether Epicentre can switch to another product or reinvent itself. I still remember when people talked about Adobe buying Apple!

If you believe in the apple story why not go for the real fruit instead of the vendor?

What is the pe of apple versus epicenter. It's all about valuation.

Is the passing of Steve Jobs contributing to its 10.7% decline today ?

Half year results [1H FY 2012] are out for EpiCentre (see attached). Looks like a much weaker performance compared to the same period last year, as competition has intensified due to the release of iPad 2. Revenue hardly budged while COGS increased more than revenues, depressing gross margins. Admin expenses also increased quite a fair bit and eroded net profit significantly, resulting in a -75% drop year on year.

Cash Flows also look weak with no FCF for 1H FY 2012, compared to the same period last year.

No interim dividend was declared, compared to a special one-off dividend of 1 cent/share last year.

(Not Vested)

Mr. Market appears to very much concur with MW's sobering assessment of yesterday midnight time regarding this retail counter's IH 2012 results. EpiCentre's share price closed down ~ 7.5% today in volumes which were 10 times its recent daily average.

Two personal anecdotes on Epicentre from my side:

Recently my son - a scruffy herbert of a University student - wanted an iPad 2 - don't they all? So I went to my nearest EpiCentre in KL (Malaysia is much cheaper for iPad's than Sin City - even if you take out the 7% GST). They didn't have the iPad "version" that my son wanted (64 GB if I recall correctly). EpiCentre undertook to get one within a couple of days - but they couldn't deliver - we then went to a competing Apple re-seller and got the one he wanted on the spot. I was struck by Epicentre's inability to deliver - over-promising and under-delivering - in such a competitive arena.

Secondly - During my visits to Epicentre's outlet, I observed that, while their outlet was pretty full at all times, hardly anyone was buying. And those few that were spending were there for accessories costing a few tens of Ringgits - not the high-priced multi-thousand-Ringgit Mac laptops, iPhones and iPads.

As I said ....... just anecdotes. But I do wonder.

I came darn close to pumping some personal dollars into EpiCentre last September (thinking that the global events of August/September had dealt their share price a tad too harshly). More luck than anything that I didn't.

Not vested,
RBM

(15-02-2012, 12:09 AM)Musicwhiz Wrote: Half year results [1H FY 2012] are out for EpiCentre (see attached). Looks like a much weaker performance compared to the same period last year, as competition has intensified due to the release of iPad 2. Revenue hardly budged while COGS increased more than revenues, depressing gross margins. Admin expenses also increased quite a fair bit and eroded net profit significantly, resulting in a -75% drop year on year.

Cash Flows also look weak with no FCF for 1H FY 2012, compared to the same period last year.

No interim dividend was declared, compared to a special one-off dividend of 1 cent/share last year.

(Not Vested)

As a post-script to my VB posting above, I noted that EpiCentre's share price was beaten down further today, falling by 7% on a (relatively) weighty volume of 197,000 shares. This means EpiCentre has seen a ~ 14% share price drop in two SGX trading days, following the announcement of their 1H 2012 Financials. EpiCentre's share price now stands at S$ 0.40. I believe it is fair to say that Mr. Market has passed his judgement on the 1H 2012 results............... and may be he's not fully done yet.

With Apple rumoured to be announcing release of the iPad3 next month, followed by the iPhone5 and possibly some form of breakthrough Television later in the year, there may be some near-medium term upside here - if they can gain market share from other Apple Re-Sellers and get costs under control (a problem MW identified in his 15 February posting). I am terrible at identifying/picking the "bottoms" of a Company's share price - I wonder how much further down EpiCentre's has to go, i.e. before it can be considered a good value-based buy???

Not Vested,
RBM

Use to hold this stock some time back. Looked promising then until started seeing all the copy cat resellers sprouting up one after another, looked almost identical. Realised then that the business was easily copied, overheads were high, Apple wanting to muscle into the distribution business ala Mercedes Benz and Cycle and Carriage and, at the time they were trying to enter into China which was highly risky (though I am not sure how it is doing now in China). All these made me look for some other safer counters.