TLV Holdings Ltd (42L:SES)

sub-aboutus-img012017TLV Holdings Limited was incorporated on June 22, 2015, and is domiciled in Singapore at 3 Kaki Bukit Place, Eunos Techpark, Singapore 416181.

TLV designs, manufactures, and sells jewelry via (a) 14 ‘mid-market’ stores (Taka) and 2 pawn stores (Top Cash) in Singapore and (b) an international wholesale business.

TLV Holdings Limited and its subsidiaries were formed through a restructuring exercise, where it became the holding company of Taka Jewellery Pte. Ltd. (“TJPL”) through a share swap arrangement on 17 August 2015. The Group represents the continuation of Taka Jewellery Pte. Ltd. and its subsidiaries.  Annual Report 2017

On August 17, 2015 (FY2016), pursuant to the share swap agreement, the Company issued and allotted 492,455,998 ordinary shares to the shareholders of TJPL for an aggregate consideration of $82,075,999.67 (S$0.17 share) for the entire issued and paid-up capital of TJPL. On September 15, 2015, the company completed a private placement for an additional 76,459,000 shares, (70,777,000 new shares and 5,682,000 vendor shares), at S$0.22 share.

Due to various reasons, the 2016 annual report shows only 73,050,000 shares were issued at $0.22, S$0.20 net of expenses (S$14,643,000), for a total listing of 565,506,000 shares.

In June 2015, the company hired Jim Rogers as a strategic consultant — to expand the business through acquisitions, joint ventures or strategic alliances with parties who create synergistic values (“Strategic Growth Strategy”).

In June of this year, TLV initiated a joint-venture agreement with Maoming Liutao Zhubao Chuangyi Chanye Co., Ltd. to open a chain of retail stores in the Maoming area of Guandong province.  TLV has 34.3% position in the joint-venture. [TLV has a 70% stake in Taka HK Venture; Taka HK Venture has a 49% stake in the JV.]

The total amount of the Taka HK Venture’s investment in the Proposed PRC JV shall be RMB 9.8 million (equivalent to approximately S$1.97 million) and be funded through internal resources.  [Press Release]

Total share-count on March 31, 2016 of 565,506,000 was reduced 6,100,000 to a March 31, 2017 balance of 559,406,000 — via a S$698,000 treasury repurchase. [No outstanding options issued.]  Insiders own the majority of the shares outstanding.

SUBSTANTIAL SHAREHOLDERS
Direct Interest Deemed Interest
Teo Boon Leng* 171,359,453 30.6%
Ang Kah Leong* 157,884,355 28.2%
Lee Sui Hee 55,733,478 10.0%
Sim Choon Lam 29,033,684 5.2%
74.0%
 *Co-founders (1997)

The balance sheet is strong and cheap, with the stock trading at 60% of NCAV.  Metrics are solid, but FS-Score is low due to current free cash flow issues.

3/31/16 3/31/17
Cash and Short-term Investments 12,709,000   $ 10,340,000   $
(0.75 * Accounts Receivable) 34,689,000   $ 36,288,000   $
(0.5 * Inventory) 48,351,500   $ 41,674,500   $
Total Liabilities 67,425,000   $ 53,990,000   $
NNWC 28,324,500   $ 34,312,500   $
NCAV 88,388,000   $ 88,204,000   $
NCAV + LT Investments 93,638,000   $ 93,767,000   $
TBV 100,938,000   $ 100,637,000   $
Enterprise Value 96,793,570   $
Retained Earnings 69,362,000   $ 69,354,000   $
Dividend Payout (5,004,000) $ (2,171,000) $
Shares Outstanding 565,506,000 559,406,000
P / NNWC 200% 155%
P / NCAV 64% 60%
P / NCAV + LT Investments 60% 57%
P / TBV 56% 53%
NCAV Burn Rate 28.0%* -0.2%
Debt / Equity 11.7% 12.1%
F-Score 4 5
FS-Score 5 4
Z-Score 2.7
Beneish M-Score (4.0)
EV / Operating Income (5yr) 237%
EV / Operating Income (10yr) 237%
Operating Income (10yr) 40,904,000   $
*Due to IPO/Restructuring

Notes:

  • Future operating lease commitments in 2016 stand at S$11,763,000.
  • Defined contribution pension plan
  • Allowance for impairment of receivables went up to S$2,095,000 (2017) from S$864,000 (2016)
  • The Company issued 73,050,000 new ordinary shares pursuant to the initial public offering of the Company at $0.22 per share of which 1,591,000 shares amounted to $350,000 was issued to PrimePartners Corporate Finance Pte. Ltd. (“PPCF”) and 682,000 shares amounted to $150,000 was issued to Group Financial Controller (“GFC”).
  • The company has closed a few stores in past 2 years.

Disclosure: Placed limit order @ S$0.094

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s