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· Strong retail and rental dollars expected to flow-in in FY08 In our last report, we have imputed the estimated sales raked-in by the Zhenzhou Zijinshan Department Store and an operating margin of 5% in our forecast. According to the management, the operating margin is likely to increase to 6-7% in 2-3 years time. In addition, the management noted the first watch retail outlet in Singapore probably to be opened near Clarke Quay MRT station by the end of 2007 tentatively. This is used as a stepping stone in their move to penetrate into the South East Asian market. Maiden contribution from the sole distribution rights of POLICE sunglass, watches and other accessories is expected to be ~RMB 20m with 20% growth y-on-y subsequently.
· Target price nudged to $0.525 on same valuation metric Revenue estimates are revised downwards by 25% due to the reduction of the watch movement trading. We view this in favorable light due to its much lower margin contribution. With the transition to higher margin business segments, we raised our gross margin by ~3ppt, though it may be slightly distorted when the entire shopping mall revenue is booked in FY08. We introduce FY09 figures, capturing the rental income, incremental retail sales and POLICE distribution rights revenue. A dividend payout of 0.6 Scents is declared, translating into 2.2% yield. We continue to value Time Watch at 15x FY08F PE, giving a revised TP of $0.525 on earnings raised (previously BUY on $0.51). Upside surprise will be better-than-expected earnings yield from the shopping mall. At 94% potential appreciation from this undervalued and under-researched counter, we reiterate BUY.
Regards
Johnny Teo Kim Soon
Research Analyst
Westcomb Securities Pte Ltd
Time Watch has rebounded back very well and fast from its low 22cts back to 29cts. It is probably one of the best performing penny share during the crisis. Today we are likely to see it close at 29.5cts or even 30cts.
I am beginning to suspect that there is BB doing stealth accumulation and then lay low again waiting for the opportunity to push the price up.
please continue to update development in this stock. Thks.
Zhengzhou, the square in front of the railway station
Price continue to surge...but is still WAY UNDERVALUED!!
Leading PRC Watch Player Unveils its Flagship Departmental Store in
Henan
6 September 2007-
manufacturer and retailer of timepieces in the People?s Republic of China (PRC)
unveiled its very first, flagship departmental store in Henan, China today.
5 Sept 2007 - Westcomb
Recommendation BUY
Bloomberg Code TWIN SP
Share Price S$0.270
Target Price S$0.525
Upside Potential 94%
holding 150lots at 27 cts..
maybe bought it at the same day as the Chairman..
or the ?Group?) one of the leading manufacturers and retailers of local branded
watches in the People?s Republic of
announced today that the Group?s CEO & Chairman, Mr Michael Tung, bought
435 000 shares yesterday.
Mr Tung paid approximately S$124,600 for the total purchase of shares in the
Pan-China watch business. He paid an average of S$0.275 per share for the
purchase.
He adds on that, ?With the popularity and long-lived quality reputation of our
?Tian Wang?and ?Balco? watch brands, coupled with our extensive network,
continual expansion plans and new revenue drivers, I?m confident that the
company performance will remain strong for this year.?
CIMB 29-8-2007 TIME WATCH - Executing nicely
Core earnings in line
OEM makes impressive maiden revenue contributions
Reiterate Outperform
with an unchanged target price of S$0.40
Finally it is Time to Watch for this counter............already written-off (cold-storage since WeePoh's days) long................long time ago. Now I know why it is changed to TimeWatch :) Cheers!