Kingsmen Creatives

Kingsmen Creatives: stock is +2.3%, marking a new 52wk high, albeit on thin volume.
The co does store fit-out (including design and concept creation) for major retail brand, incl the likes of Apple, Burberry, Chanel, Cartier, LVMH, Osim, Gucci, etc.

Maybank KE Research notes KMEN’s penetration into China back in 2006 has been fruitful, with the co now involved in “last mile solutions” for key retail brands setting up shops in key cities in PRC. Believes the new mall opening across China are a catalyst for KMEN, particularly as margins in China are healthy due to the rising component of Design work.

Adds, a new revenue generator is in alternative mktg services to the key brands, eg. helping put together launch parties. At avg cost of $1m each, the margins are much better than fit out costs.

The house notes KMEN has moved up the value chain over the yrs, and is no longer just another contractor, but a fully integrated solution to the brand owners. Believes KMEN’s experience in theme parks projects like Universal Studios in Sentosa has put them in a good position to take on more in the region.

Says funds have been accumulating, with mgt having spoken / to speak to more insti investors (eg. Fidelity) soon, arranged by other brokers.
At fwd P/E of 7x and sustainable div yield of 6%, says the stock is perfect for long-only small-mid cap funds.