FJ Benjamin    Last:0.01   -

Powering up

EastonBay,

My investment and timing was pure luck.

Was having beer with some friends on the Friday before and one of them suggested I take a look of FJB.

Had the whole weekend to do my research and analysis.

The first uptrend on 4 April was just lucky timing.....

 

shplayer, thanks for sharing with me the rationale behind your decision.  I bought the mother share on 14th Mar. I was attracted by FJ's ability to bring in Gap, which for years refused to come into Singapore and it's share in St James. I started watching it since January and read it's financials. But I  missed the boat then because I refused to pay more than 0.70 for it (there was a quick run-up then). I waited till the end Feb/early march's correction before moving in mid March.  

 

Thanks again for going through your thought process.

 

EastonBay,

Analysts fair value/target price is >$1.00....GS $1.10. I don't go by fair value.

Perhaps I can run you through my analyst and thought process before deciding on investing in the Warr on 2 April.

From the FY2006 AR (YE 30 Jun 2006), it was stated in the Chmn/CEO statements:

1.  that the Company has finished its restructuring process.....cut off unprofitable lines/closed stores etc.
2. They also stated that FY2007 will add about 74% more footprint space.

HY 2007 (31 Dec2006)......

1. they have already opened 31 of the planned 52 store openings
2. the above store openings does not take into account their Banana Republic and Celini line of stores.
3. Their 32% stake in St James' Power Station started in Dec 2006...so 3Q 07 will see the benefits of this.
4. HY 07 results was 3x better that HY 06.

From the above, I made the following forecasts:

1. From the financials, my est of FY07 was 4.5cts.
2. My est for FY 08 and 09 was for between 30% to 40 % YoY growth - with the IR and higher economic growth => est FY08 eps about 6.0 and FY09 about 8.0 cts.
3. At the mother share price of 70 cts (at the time of my purchase)....so fwd FY 09 P/E was 7.8X

The warrant, with its gearing of 2.8x the mother share was more compelling....so the rest is history.

As for the fair value....I am not so sure....today's (86 cts) fwd FY09 P/E is >10X.

 For now, I am just letting the market momentum carry the price and see where it brings it.

 

 

The warrant is definitely giving a better return than the mother share.

Too bad, miss this boat..

 

shplayer, need your advice on this (won't hold anyone responsible, invest/divest at my own risk).

I am pleasantly surprised at the price increase today. My question is what is FJ Benjamin fair value according to your calculation? And what do you think is the driver to today's price surge? (related to F1?)

 

Citysky,

My estimate of FY 2007 (30 Jun 07) FJB eps is about 4.5cts based on fully diluted with all warrants converted (balance of about 120 mil warr as of 23 Mar 07). This works out to be about P/E of 18X current price of about 80cts.

This P/E is pretty high but given the potential high growth rate........est FY 2008 and 2009 to be about 30 - 40% per. year (personnal est)....fwd P/E (FY 2009) is about   10X.

My personnal opnion........Caveat emptor........vested in warrants.....just sharing.....invest/divest at your own risk.

 

sorry, typo-error. Conversion.

 

<The Edge Singapore> last weeks has an article warned about the coming diluted effect on this counter as looks like very likely there will a big conversation happen upon warrant coming due. Future out-look still quite positive as FJ is serious about buying more brands and exploring in region.  

 

 

 

 

 

Goldman Sach targets $1.10!!! CHEONG AH!!!!

Source of opportunity

FJ Benjamin (FJB) has restructured for better profitability by exiting

unprofitable brands and de-leveraging its balance sheet. This high-end

fashion retailer is now embarking on a rapid store expansion plan which

could grow retail space three-fold over FY2006-FY2008E. An underresearched

stock, we believe it also offers rare exposure to discretionary

consumer spending in Singapore which we estimate accounts for 60% of

group revenues. We initiate coverage on the stock with a Buy rating and

12-month price target of S$1.10/share, offering 54% potential upside.

 

arise2257,

 

Ah ha...this is not the same as the European Call warrants....this warrant is issued by the company.

This is how it goes....

 

Expiry date is 16 Jul 2007....i.e. about 3.5 mths away.

Conversion ratio 1 : 1

Conversion price - 45 cts

 

What it means is that if you have the warrants, you can convert it to the mother share (1 warrant for 1 mother share) before 16 July 2007 by paying 45 cts.

 

Current warrant price is 33 cts and mother share price is 79 cts.

 

So, if you buy warr at 33 cts, your total cost for the mother share will be 33 + 45 = 78 cts....a 1 ct discount to the mother share.

 

But this is not the advantage of the warrant.  The gearing is the attraction. Theoretically, if the mother share moves 1 ct, the warrant will move the same amount in the same direction. So, you have a lower capital outlay for a higher % gain. The gearing in this case is 79/33 = 2.39X. Of course, the gearing cuts both ways.....depending on the direction of movement.

 

What's up with this guy? Is it worth buying the warrant?

 

Starting to run.....up 6 cts...so is the Warrant.

 

singaporegal,

 

Thanks.......anyway, vested in the warrant........lets see how it goes.

 

Hi shplayer,

 

A little hard to tell for this one.  If you take a time frame of only a few days, it looks like the Acc/Dist and Chaikin are uptrending. But if you take the time frame of one month, it may not look that good. The volumes are ok but not extraordinarily good.

 

singaporegal,

 

Sorry to impose on you again.

 

My interpretation is chaikin, A/C and RSI all trending up. Bands also abit tight and hovering below the upp band. Vol also up.

 

Positive sign?

 

Thanks

 

Stock Analysis based on TA of FJ Benjamin:

FJ Benjamin shows a more than 2 times increase in volume over average 5 days. Price cleared moving averages resistance and confirmed with a MACD bullish divergence.  Support found at around $0.70 followed by $0.66.

For more analysis and FJ Benjamin charts, please refer to www.bull-fish.com

 

It is returning to luxury goods retailing with an agreement to acquire the distribution rights of French brand Celine for southeast Asia from the world's largest luxury goods group LVMH Moet Hennessy-Louis Vuitton.



It said the deal would yield immediate returns for the group, which currently has the distribution rights of mass market brands like Gap, Banana Republic and Guess in the region.



"Financially, the Celine business is profitable so this is expected to translate into an immediate return on investment," said Nash Benjamin, FJ Benjamin CEO. He declined to give more details.



Founded in 1959, FJ Benjamin was known for distributing high-end fashion brands such as Gucci, Lanvin and Fendi, but it had to give up most of these brands after the Asian financial crisis in the late 1990s.



The agreement will see FJ Benjamin acquire 7 Celine stores and inventory in Singapore, Malaysia, Indonesia and Thailand. Benjamin said the group expected to have 11 to 12 Celine stores in the next 5 years in the region.

 

it could be due to time declay. As the expiry for this 16 July 07

 

FJ WARRANTS TRADING AT MASSIVE DISCOUNT EVEN IF YOU FACTOR IN 1.5CT DIVIDEND.

MOTHER: 79CTS
WARRANTS: 31CTS
CONV: 45 CTS
DISCOUNT: 3CTS!

WHY??

 

I just been to their warehouse at Fu Yu building one month ago. From my visit, I had learnt that this company is very cost conscious.

Their G.A.P products sales is simply overwhelming. Their next brand in line Banana Republic will be a hit in the regional market as well. Keep these developments in view for those who are holding onto these shares.