I purchased shares in Kingsmen Creative on January 25 and 26, 2010, and the following few postings will elucidate the thought process and analysis which went into the rationale for the purchase decision. Note that some of the factors which led to this decision are qualitative by nature, and are also known as “intangibles”, but are nevertheless important in assessing if a company is suitable for investment. Though an objective assessment would be difficult to predict if a Company will continue to do well, a somewhat rational look at the business model and Management quality does give some hints as to what may come. That said, an investor should always prepare for some risk of partial permanent loss of capital, no matter how thorough or detailed the research is. My job is to minimize the risk of loss, and maximize the probability of gains over a decent period of time; and as the business grows.
This analysis will be split into several sections, of which I will cover the industry in which Kingsmen operates, its competitive climate, its financials, fundamentals and business units (divisions); and also its prospects, plans and investment merits (and demerits). Part 1 will touch on their business, industry characteristics and Profit and Loss + Balance Sheet.
Introduction – Kingsmen’s Business
Kingsmen Creative was formed in 1976 and has, in all this time, been a leading provider of integrated marketing solutions; as well as specializing in its core businesses of Museums and Exhibitions (of which it assists in organizing and setting up), and Retail and Commercial Interiors, which it helps to do fitting out. It has staff strength of about 1,100 in Asia Pacific and Middle East and is a member of many associations, examples of which are Interior Design Confederation and Singapore Retailers’ Association. Kingsmen’s name is synonymous with quality and they boast an impressive clientele of blue-chip names ranging from The Gap, FJ Benjamin and Burberrys just to name a few. They have also participated in events such as the F1 Singapore Grand Prix and also the upcoming Shanghai Expo in 2010. More details of their clientele base can be found on their website. Their name “Kingsmen” actually originated from the separate words “King’s” and “Men”, which represents the belief that the customer is of paramount importance and should be served by men with commitment and integrity. Read more…