Below is the investment thesis for Popular Holdings from beyondproxy.com
- Retailing & Distribution : ( Books, Stationery, Magazines etc.)
- Publishing ( Publishing Books, Magazines etc.)
- Property Development ( Residential Property Developer)
- Selling Assessment & School Books: These are the books which are required by school children ( Singaporean have to study in local schools) & assessment books are the one which students read to complement their existing school material. This to me is stable ex-growth business in Singapore & Hong Kong while growing in Malaysia as Popular expands its presence across smaller towns in Malaysia.
- Selling Stationery: Again this is a stable business & on SSS basis revenue seems to be flat. Last year Popular has started getting into Office Stationery Business (which has bigger potential than Stationery Retailing).
- Selling Books : This business faces the greatest risk from Digitalisation as people move towards e-books. It set up stand alone book stores under brand name of Harris, Prologue etc. ( following concept of Kinokuniya, Borders). This business has not been successful & though company does not disclose it; these stores are loosing money. As a strategy Popular has been reducing the number of these stores & has been using existing book stores ( where it sells school books & stationery) to sell the books. Popular does not have a wide range of selection which e.g. Kinokuniya has but what it has is reasonable collection of best seller – so when the customers will visit shops for stationery, printer inks, assessment books etc. – they buy the books which are best sellers, children book etc. To attract customers to Buy books & stationery – the company has Popular Loyalty Card where membership is priced very attractive S$ 12 for 1 year & S$ 30 for 3 year. This card enables the customer 10% discount on all Popular Bookstores. This way if I have a Popular Card – I am able to Buy books at price lower than Kinokuniya – though I get less choice At Popular Bookstore.
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