ValueMax

ValueMax released 3Q13 net profit of $3.0m (-33%), in tandem with a 38% drop in revenue to $81.4m, taking 9M13 net profit to $8.3m (-34%). The dismal topline was due to a slump in revenue from the retail and trading of pre-owned jewellery and gold, which declined 40% to $75.0m, on back of a decline in gold price. On the other hand, revenue from pawnbroking increased by 14% to $6.4m. Gross margins increased from 5.9% to 8.5% as a result of a higher revenue mix from the pawnbroking business which commands a higher gross margin compared to the retail and trading business. Associate contributions increased 334.5% to $1.0m, mainly due to the inclusion of the group’s share of its Malaysian associated companies’ results for the first time in 3Q13. Going forward, ValueMax guides that grp notes that the industry as a whole is facing challenging business conditions, with lower gold prices and increased competition within the industry. Nonetheless, the group will continue with its strategy to grow its business and strengthen its brand awareness as set out in its recent Prospectus. At the current price, ValueMax trades at an annualized 17x FY9M13 P/E versus peers MoneyMax 16.8x current P/E and Maxi-Cash’s 37.6x.