Consumer Hidden Gem

Marco - sunset or sunrise?? GEM or Germ??

Daz Ng
Publish date: Mon, 18 Aug 2014, 11:05 AM
Daz Ng
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Price Stagnant, but earning growth consistently
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Good Morning everyone on this quiet sunday. Stock market had rebounded but some stock is not moving yet, however, with foreign investor are buying in KLCI for the past week, i suppose KLCI will find its support and move higher eventually. 

Eversince i started blogged about MARCO, there are a lot of people keep saying it is a sunset business already, why bother to invest?? Well, if we look closely enough, you will still find that first world advance economy like US or EUROPE, people still buy newspaper in the morning and wear watch to school or work..and I like to wear G shock for my workout & sport and most interesting part is that student need a watch because they dont allowed to carry cellphone to school. My daugther is 5 years old and i would only provide her with smartphone when she already in form 5 in high school. So, why is it a sunset business?? Well, maybe we should start treating buying stock/share is like starting your own business, we have to be able to see value in a business and analyse the management of the company and most importantly the financial track record of the company. 

Today, i would like to share some of the direction/business plan of casio in 2015

 

(a) In the timepiece business, Casio will launch new watches with the latest technology. They will include hybrid models featuring GPS and radio-control, as well as models capable of connecting to smartphones with Bluetooth®. The Company will
further strengthen its six main watch brands, including G-SHOCK, to keep growing the business and maintain high profitability.
(b) In the electronic dictionary business, Casio will expand the business and maintain a high level of profitability by strengthening models for elementary school students in the domestic market while expanding its line-up in digital vocabulary books. In overseas markets, it will tap into ASEAN markets as it seeks to expand its business.
(c) In the systems equipment business, Casio will improve profitability for projectors through cost reduction and the introduction of new technology.
(d) In new business, the Company will work on expanding large orders for its CASIO Signage business. It will also introduce Art Clocks and expand painting contents in the digital painting business.
 
 
Sales figure of casio in ASIA
 
Asia
(millions of yen)
93,764
(03/2009)
79,707
(03/2010)
83,063
(03/2011)
82,658
(03/2012)
88,731
(03/2013)
115,554
(03/2014)
% of Net Sales
18.1
18.6
24.3
27.4
29.8
35.9

 

Well, I guess the information provided is clearly stated Casio Business Growth planning and Direction. When we talk about MARCO, people tend to relate it's business to just Timepiece/watch. Its in fact more than that, we fail to see the expansion in stationary network and sales. Can you imagine if primary school in malaysia start using the digital vocabulary book/dictionary and every student is having one? with a good relationship with government, its possible. It will be like every student now carry casio scientific calculator and in the future they might carry the digital vocabulary book/dictionary. There are more growth that havent mention, the data projectors, digital art clock and painting, and music instrument!!! 

Is this a SUNSET Business?? can imitation copy the special feature of G shock or Baby G with innovative new technology? Do you allow your kids to carry smartphone to school and risk losing it or put her at risk to snatch robbery? does school allow kids to carry handphone? I guess you already have the answer in your HEART! Happy Investing and have a fantastic weekend!

This article is purely my personal opinion and buy at your own risk.

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Discussions
5 people like this. Showing 7 of 7 comments

HJey

You should use MY & SG sales only not Asia. Marco doesn't distribute to China, HK, Japan & etc. It's not sunset industry but Malaysia has limited growth for Marco

Majority of Marco sales comes from watches cater to entry level. You should visit City Chain & Time Galerie to understand about retailing in Malaysia

2014-08-18 11:32

Justin Ngo

Marco got 4 segments, namely timepiece, calculators, pianos and camera.
it's selfie camera get great respond from consumers. so not only timepiece, it camera segment is doing well too. besides, calculator segment is the dominated business, all Malaysia students in the secondary school are using Casio branded calculator, not other. Only Casio scientific calculator.

2014-08-18 11:56

nearownkira

yeah you are promoting Casio not Marco.Marco business in electronic piano is not very good, never mentioned about it huh.

2014-08-18 11:58

JT Yeo

I think a better way to think about the business is since Marco is involved in wholesale and retail then the questions will be:

Is Marco the sole distributor for Casio products and other brands? - If they are then we will have to look at how big is the market in Malaysia.

If no then what are the strength of their distribution network? Why must retailers get Casio products from Marco than other distributors through other distribution network?

For retail, what is their competitive edge compare to other watches retailers? i.e. Lower cost structure, better after sales service etc.

To me what they are selling is neither sunset nor sunrise, but more like a stable/slow growth industry.

2014-08-18 12:30

1901

Is Marco the sole distributor for Casio products and other brands? - good question, find out d answer first.

2014-08-18 18:34

Justin Ngo

marco has 800++ watches dealer all around malaysia. they r regular customers who take products from marco.

2014-08-18 22:29

backspace

just wait for this coming Q report, the figures will speak for itself, whether sunset or sunrise.

even you look at the past Q report, the number or quite consistent, the EPS got diluted because of the warrant conversion, now that the warrant has expired, no issue with further dilution.

yes you may say if the earning is consistent and not improving, why is it wise to invest? for 1, even the earning is stagnant, not increase largely, the dividend payout alone is enough for you to hold it as defensive stock.

2nd, they just appointed a young CEO, whether he is capable or not we not yet know, but it shows that the company is looking forward, pumping new blood in management with new ideas into it.

3rd, this company is cash rich, in the past they just keep the money and pay out dividend, i believe with the appointment of new CEO, he may make use of the cash pile to do something. we just have to wait and see.

2014-08-19 00:04

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