TheHourGlass    Last:2.53    -0.11

The Hour Glass

Stock is currently cum dividend.

This is a good stock to buy and hold over the next 5 years for the following reasons:
1) Proven management, business model and earnings growth track record
2) The three big watch brands (PP, Rolex, AP) are at a moment in history where demand is skyhigh and THG is strongly anchored with these brands
3) The next five years could see high inflation globally with all the money printing by central banks. Luxury watches is one product where higher prices are readily accepted by consumers
4) The company itself acknowleges that economic/profit profile of the company has undergone a marked shift for the better in the past one/two years
5) Yet valuation remains cheap at ~10X (peer Watches of Switzerland is ~40X)
6) Continuing from point (4), the Company is confidently raising its dividends and confidently continuing to buy back shares from the market.

The above reasons will slowly attract more institution funds. Before that happens, Singaporeans should collect and hold this local champion first. Re-allcoate your portfolio from the ' blue chips' in STI - their businesses are in structural decline and slowly decaying, IMHO.   

DYODD

 

You will get reward if you pay a little attention to this counter, this stock is going to rise in anytime soon

 

Let' s recap the fundamentals:

Historical financial performance. In just 4 years, profit expanded by 70%.

• FY2017 profit after tax = S$50M
• FY2021  profit after tax = S$85M 
• In just 4 years, profit expanded by 70%. And achieved largely by just organic growth. No monkey business (restructuring or venturing into unrelated businesses) that might have distorted the results. Which other SG company can claim such outstanding performance. 

Valuation based on business fundamentals (=$2.50/share based on 15X PE). 15X PE is a no-brainer for a company that can expand profit by 70% in 4 years.

1. FY2021 underlying earnings = S$92M (with adding back of S$10M fair value loss on investment properties)
2. But investing/valuation should be  about one' s belief about where the company will be in the future
3. So assuming 3% earnings growth per year, Year10 net profit would be S$124M, average net profit over 10 years would be ~S$110M (for a round number)
4. As an owner, THG would earn me on average S$110M per year for next 10 years
5. Ascribing 15X PE to S$110M = the business has a value of = S$1,650M
6. Why 15X? I don feel that one should use 15X when one is considering to BUY (margin of safety considerations). But I don think that one should sell unless it reaches at least 15X (let a good business/investment compound and enjoy the ride  considerations)
7. Adding net cash of ~S$140M (as at Mar2021) to S$1,650M = the company is worth = S$1,800M      (for a round number)
8. I do not add the value of THG' s investment properties because THG does not have a intention to realise their value through selling them, rather THG would likely covert them into boutiques for its core business.
9. S$1,800M divide by 704M shares = $2.50 per share.

 

In the past 5 years, revenue and profit have remained consistent, net profit margin has increased, and dividend payout has increased. Good to invest long term

 

Good time to accumulate on weakness

 

after weak holder is taking profit, it will start uptrend again

 

company keep share buyback, something is brewing

 

Walk into THG and you' ll realise there' s not a single Rolex for you to purchase. 

ADs right now are huat-ing more than ever. 

 

13 Jul - Share buyback continues at high volume.
 

Date	No. Shares	S$	S$/share
Total	5,080,700	6,448,056	1.27
13-Jul-21	478,000	707,954	1.48
12-Jul-21	557,000	822,228	1.48
9-Jul-21	165,000	242,725	1.47
8-Jul-21	524,000	778,342	1.49
5-Jul-21	100,000	150,085	1.50
28-Jun-21	182,000	275,245	1.51
25-Jun-21	492,000	735,772	1.50
24-Jun-21	149,900	221,973	1.48
23-Jun-21	200,000	290,745	1.45
21-Jun-21	359,000	496,592	1.38
18-Jun-21	100,000	138,355	1.38
17-Jun-21	316,500	430,169	1.36
16-Jun-21	427,300	567,588	1.33
23-Mar-20	10,000	5,615	0.56
20-Mar-20	390,000	218,910	0.56
19-Mar-20	600,000	342,500	0.57
17-Feb-20	10,000	7,770	0.78
14-Feb-20	20,000	15,490	0.77

 

8 Jul - Share buyback continues at high volume.
 

Date	No. Shares	S$	S$/share
Total	3,880,700	4,675,150	1.20
8-Jul-21	524,000	778,342	1.49
5-Jul-21	100,000	150,085	1.50
28-Jun-21	182,000	275,245	1.51
25-Jun-21	492,000	735,772	1.50
24-Jun-21	149,900	221,973	1.48
23-Jun-21	200,000	290,745	1.45
21-Jun-21	359,000	496,592	1.38
18-Jun-21	100,000	138,355	1.38
17-Jun-21	316,500	430,169	1.36
16-Jun-21	427,300	567,588	1.33
23-Mar-20	10,000	5,615	0.56
20-Mar-20	390,000	218,910	0.56
19-Mar-20	600,000	342,500	0.57
17-Feb-20	10,000	7,770	0.78
14-Feb-20	20,000	15,490	0.77

 

The Directors have recommended a final dividend of 4.00 cents per ordinary share (one-tier) amounting to approximately $28,160,000. This is subject to the approval of the shareholders of the Company at the Annual General Meeting to be held on 28 July 2021.

 

I hv sold all at 1.55, seems merril lynch is accumulating. I'm shifting temporary to pronex and will be back again

 

Looks liek they' ve stopped the share buy back. Counter did not look good today (Friday).

 

thanks for the update always

choonoohc      ( Date: 28-Jun-2021 21:49) Posted: 28 June - Buyback continues.   Date   No. Shares    S$    S$/share  14-Feb-20             20,000             15,490                     0.77 17-Feb-20             10,000                 7,770                     0.78 19-Mar-20         600,000         342,500                     0.57 20-Mar-20         390,000         218,910                     0.56 23-Mar-20             10,000                 5,615                     0.56 16-Jun-21         427,300         567,588                     1.33 17-Jun-21         316,500         430,169                     1.36 18-Jun-21         100,000         138,355                     1.38 21-Jun-21         359,000         496,592                     1.38 23-Jun-21         200,000         290,745                     1.45 24-Jun-21         149,900         221,973                     1.48 25-Jun-21         492,000         735,772                     1.50 28-Jun-21         182,000         275,245                     1.51         Total :   3,256,700   3,746,723                     1.15

 

Don' t be the last person to ride the bus

 

The accumulation stage and the recent strong company share buyback.

 

28 June - Buyback continues.
 

Date	No. Shares	S$	S$/share
14-Feb-20	20,000	15,490	0.77
17-Feb-20	10,000	7,770	0.78
19-Mar-20	600,000	342,500	0.57
20-Mar-20	390,000	218,910	0.56
23-Mar-20	10,000	5,615	0.56
16-Jun-21	427,300	567,588	1.33
17-Jun-21	316,500	430,169	1.36
18-Jun-21	100,000	138,355	1.38
21-Jun-21	359,000	496,592	1.38
23-Jun-21	200,000	290,745	1.45
24-Jun-21	149,900	221,973	1.48
25-Jun-21	492,000	735,772	1.50
28-Jun-21	182,000	275,245	1.51
Total :	3,256,700	3,746,723	1.15

 

25 June - Buyback continues.

The price at which the company is buying back shares has increased significantly from when it first started this year ($1.50 vs $1.33).

Even so, the company is not slowing down on its share buyback. 
 

Date	No. Shares	S$	S$/share
14-Feb-20	20,000	15,490	0.77
17-Feb-20	10,000	7,770	0.78
19-Mar-20	600,000	342,500	0.57
20-Mar-20	390,000	218,910	0.56
23-Mar-20	10,000	5,615	0.56
16-Jun-21	427,300	567,588	1.33
17-Jun-21	316,500	430,169	1.36
18-Jun-21	100,000	138,355	1.38
21-Jun-21	359,000	496,592	1.38
23-Jun-21	200,000	290,745	1.45
24-Jun-21	149,900	221,973	1.48
25-Jun-21	492,000	735,772	1.50
Total :	3,074,700	3,471,478	1.13

 

Fundamentally I think it is very cheap.

See my earlier valuation in this forum thread. At $1.50, it is like 10X PE.

Which quality SG company is trading at just 10X PE?

In my view, Hour Glass is premium to the likes of your Temasek-linked companies. The strength of family-management vs career-managers. 

Also Watches of Switzerland is trading like 50X PE.

AttasBoss      ( Date: 24-Jun-2021 18:43) Posted: 149,900 shares@$1.48 share by back today

 

24 June - Buyback continues.

Based on company' s buyback volumes and total traded volumes for the day, there seems to be an active competition between company and the market.

I wonder what kind of intstructions / buying strategy does the company give to its broker. 
 

Date	No. Shares	S$	S$/share
14-Feb-20	20,000	15,490	0.77
17-Feb-20	10,000	7,770	0.78
19-Mar-20	600,000	342,500	0.57
20-Mar-20	390,000	218,910	0.56
23-Mar-20	10,000	5,615	0.56
16-Jun-21	427,300	567,588	1.33
17-Jun-21	316,500	430,169	1.36
18-Jun-21	100,000	138,355	1.38
21-Jun-21	359,000	496,592	1.38
23-Jun-21	200,000	290,745	1.45
24-Jun-21	149,900	221,973	1.48
Total :	2,582,700	2,735,706	1.06