Company Review: Kingsmen Creatives

As a one-stop design, production and logistics center, Kingsmen tops as a leading communications design and production entity in the Asia Pacific region. Providing clients with integrated solutions in Exhibitions & Museums, Retail & Office Interiors, Research & Design and Integrated Marketing Communications, Kingsmen is the epitome of a reliable global marketing communications firm.

Listed on SESDAQ in 2003, the company was affected by SARS in 2004.  However, since then, the company has posted a CAGR of 30% in earning over the past 3 years.  Net profit margin has improved from a low of 2% in 2004 to 5.9% in 20071H with its average ROE around 20%.  The company has a net cash position and insiders hold about 25% of the total shares.

I was attracted to the company due to the big name clients that it served such as Adidas, Chanel, Hour Glass, Esprit, Nokia, DFS, DBS/POSB, FJ Benjamin and others.  This is an impressive list of clients and having seen some of the interior designs, I am impressed by their works.  One concern that I have is its low net profit margin, hopefully it can be better with new production facilities in Malaysia.  With its expansion plan on track, it is expected the company would grow further this year.

I was lucky to come across this company in Dec. 2006 and purchased 15 lots at a price of $0.22 (at an amazing low historical PE of 4.5).  The market has recognized the potential of this micro cap over the year and its price has more than double over the past 9 months.  I will continue to hold on to my 15 lots as long as the company continues to perform well.

20071H Results

The company has posted a good first half results in August with its bottom line improves by 65%.  It is expected that company to continue to do well in the second half of 2007 which traditionally contributes a higher percentage to company’s revenue and profit.