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ALP STOCK INVESTMENT CLUB
(12 February 2016)
Company: Old Chang Kee Ltd (Code: 5ML)
12 February closing price: S$0.660
12-MTarget price: S$0.700
1.) Sector: Food and Beverage Industry
2.) Core business structure: Old Chang Kee is Singapore’s leading brand of curry puffs and other hot savouries. With one of the best curry puffs around and achieving excellence in accessibility, variety and wholesome goodness, Old Chang Kee has also diversified and extended its product range. Old Chang Kee now seeks to establish itself as a major recognizable brand in modern Singapore while preserving its valuable heritage.
3.) Segment that generates the highest revenue: The Group is principally engaged in the manufacture and distribution of food products. As such, the Group has not presented a breakdown of segment information by operating segments
4.) Countries that the business operates: Singapore, China, Malaysia, Indonesia, Philippines, Australia.
5.) Challenges: Old Chang Kee has to face current challenges such as a labour shortage and the push for productivity while facing intense competition as there is a growing number of new entrants for this industry.
6.) Strengths: Old Chang Kee is able to generate high amount of profit through the sales of its signature product, the curry puff. Contributions from new outlets and higher receipts from existing outlets are able to offset closure of some outlets. This shows that they have high stability and scalability to their business and is expected to grow even larger in the near future.
7.) Significant events: Launched our first Changi Airport outlet in Terminal 3, a 2-in-1 concept with Old Chang Kee sharing the premise with Curry Times, Winner of Influential Brands’ Top 1 Brand, kiosk category.
8.) GTI Ranking: 273
*The Group had changed its financial year end from 31 December to 31 March. The figures reported for FY2012 comprise 15 months, from 1 January 2011 to 31 March 2012.*
10.) Recommendation: Buy. It is advisable to continue investing and tracking this stock because Old Chang Kee has been making revenue increases from 2009 to 2014. It is certain that their stock price will increase in the long run and might be reaching their fullest potential in the near decade.
COMPILED BY: Zong Han
DISCLAMER: Readers should not rely solely on information published and should seek independent financial advice prior to making any investment decision. The publisher accepts no liability for any loss whatsoever arising from any use of the information published herein.
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