Posted by $$ BUYSELL $$ > 2022-11-03 16:21 | Report Abuse

everyday going up now come down..anything up must come down.

Posted by Amazonboy > 2022-11-03 16:56 | Report Abuse

Strong closing...still got hope...Lol

Posted by 263263 > 2022-11-03 17:00 | Report Abuse

wait good new

Posted by curiousq > 2022-11-03 17:08 | Report Abuse

casino stock

Posted by shareprofit > 2022-11-03 19:23 | Report Abuse

Allowed 2mil more stocks buy back before hit limit 10%...VT will come in aftr that to cont.

Posted by Raiz368 > 2022-11-03 19:47 | Report Abuse

VT already give instruction for treasury to buy back price below 1.70

Posted by treasurehunt > 2022-11-03 21:57 | Report Abuse

1. Share Buyback from 7 Oct 22 to 3 Nov 22 - 14.331 million shares ( RM 29.45 million ) @ Average price RM 2.055
2. Total Day Trade from 7 Oct 22 to 3 Nov 22 - 22.464 million shares @ 64% of the shares acquired by Share buyback
3. Besides share buyback, shares volume traded by other players 4.14 million shares from 7 Oct 22 to 1 Nov 22 (while price was riding high )
4. Exclude share buyback 3.05 million shares from 2 Nov 22 to 3 Nov 22, shares volume traded by other players 4 million shares

Posted by treasurehunt > 2022-11-03 22:10 | Report Abuse

Article from the Edges :
7-Eleven Unaware of Reason for Share Price Rise
Publish date: Wed, 02 Nov 2022, 08:50 AM

Unaware of the reason? Lol

Posted by treasurehunt > 2022-11-03 22:21 | Report Abuse

SEM is highly geared in its existing Balance Sheet position. With the expansion plan of 7 Cafe from 100 to 150 stores, Capex is needed between RM 50 million to RM 75 million this year (assume average RM 500k per store). Now, the interest rate is escalating and they need more money to finance the expansion next year. What would the do? Borrow more money for expansion?

Extracted: 7-Eleven Malaysia is aiming to expand its own cafe store count to between 100 and 150 by this year, up from 28 currently.

Dubbed 7CAFé, the group has budgeted an investment of between RM450,000 and RM550,000 for each new cafe opening in a bid to reach the target, said Wong.

https://www.theedgemarkets.com/article/7eleven-malaysia-aims-expand-cafe-store-count-150-year

Posted by treasurehunt > 2022-11-03 22:30 | Report Abuse

SEM has thrown RM 29.45 million for share buyback from 7 Oct 22 until now. They need another RM 3.5 million to snap up 2 million shares achieving the max 10% share buyback.

Why SEM wants to spend RM 33 million for share buyback rather than investing in 7 Cafe expansion?

Posted by Raiz368 > 2022-11-04 00:02 | Report Abuse

Finally bounce back from 1.61 to 1.73

Posted by dompeilee > 2022-11-04 07:19 | Report Abuse

It's a blatant political donation. From SEM's bank account(& your pockets) into politicians' pockets!(They bought in the 1.50s & sold to clueless newbies & the co. itself on the way up)

Posted by shareprofit > 2022-11-04 09:50 | Report Abuse

anytime now for another huge jump....SEM SBB definitely has it's reason

SBB until all time high...without a reason is a blatant lie coz SBB authorisation is for specific criteria and reason.

Posted by treasurehunt > 2022-11-04 10:06 | Report Abuse

With the existing gearing level, SEM growth is limited and won't be easy to borrow money for future rapid expansion especially cafe business. Besides growth bottleneck, rerating is obviously not feasible.

Posted by treasurehunt > 2022-11-04 10:12 | Report Abuse

To unlock the value of convenience stores business , degearing and improve its growth prospects , it seems that disposable of Caring is a better option.

Posted by treasurehunt > 2022-11-04 10:21 | Report Abuse

What would happen to SEM bottom lines with the existing borrowing RM 1.4 billion in the rising interest rates environment for the next 2 years if the management do nothing?

Posted by treasurehunt > 2022-11-04 10:26 | Report Abuse

SEM margin is low and non comparable to the Starbucks business with high margin. BJFOOD is able to cope with the rising interest costs.

Posted by Tibbers > 2022-11-04 10:27 | Report Abuse

chill, VT just want let u guys experience the beauty of climb stair steadily and then go for bungee jumping. hue hue hue. Awesome VT. kesian yang kena trap, bye bye money.

Posted by treasurehunt > 2022-11-04 10:34 | Report Abuse

Be prepared for the worst of SEM bottom line if no deal done in Caring business unit. Lolz

Posted by dragon328 > 2022-11-04 11:07 | Report Abuse

SEM total borrowings amounted to RM745.3 million, minus off cash holdings of RM197.4m, net debt is at RM547.9 million only, not RM1.4 billion.
Interest payment for 6 months ended 30 June 2022 amounted to RM15.368 million, annualised to RM30.7 million, implying an average interest rate of 30.7/745.3 = 4.1% which is deemed reasonable.
Interest received for 6 months ended 30 June 2022 amounted to RM1.346 million, annualised to RM2.69m, implying an average interest income rate of 2.69/197.4 = 1.36% inline with normal bank deposit rates.

Posted by dragon328 > 2022-11-04 11:11 | Report Abuse

For the 6 months ended 30 June 2022, SEM registered operating cash flows (before capex) of RM157.9 million, annualised to RM315.8 million which is very strong.

Capex incurred in the 6 months ended 30 June 2022 amounted to RM37.83 million, annualised to RM75.66 million, in line with what SEM CEO said on planned opening of 100-150 7-Cafe this year at average RM500k per store.

Posted by dragon328 > 2022-11-04 11:13 | Report Abuse

So after allowing for planned capex of RM75 million, SEM will still have free cash flows of RM315m - 75m = RM240 million or almost 20 sen per share for dividend distribution and debt reduction.

Posted by dragon328 > 2022-11-04 11:14 | Report Abuse

Part of this huge free cash flows have been used to aggressively buy back own shares, which may top RM33 million when it hits 10% max SBB. I would applaud such SBB given that the company has so much free cashflows of RM240 million a year

Posted by dragon328 > 2022-11-04 11:20 | Report Abuse

While SEM could distribute most its free cashflows as dividends, say RM185 million or 15 sen dividend per share (to give a 10% dividend yield), it could use the same money to buy back 10% of own shares at current prices and distribute the treasurer shares as dividends, in which case minority shareholders like us would still get 10% dividend yield.

I would prefer the latter where the company share price can be pushed up to a more reasonable level, i.e. RM2.00-2.50 as the company buys back the share. For cash dividend distribution, the share price will be adjusted down by 15 sen once dividend goes ex and share price has less support.

Posted by treasurehunt > 2022-11-04 11:39 | Report Abuse

Bear in mind that Lease Liabilities, in fact, is a borrowing in another term here. Look at the AR 2021 (Note: 7 Finance Costs), interest payment on lease liabilities RM 36 million in 2021 whereas Payment of principal portion of lease liabilities RM 137 million as shown in the Cash Flow Statement.

Posted by dragon328 > 2022-11-04 11:42 | Report Abuse

True that SEM has a low net profit margin currently, but the better way to gauge its profit margin will be to look at its gross margin and EBITDA margin.

For the 6 months ended 30 June 2022, SEM registered revenue of RM1,783.6 million and gross profit of RM503.9 million giving a gross profit margin of 28.8%.
SEM's EBITDA came in at RM224 million or an EBITDA margin of 12.5%.

In comparison, BJFood had an EBITDA margin of 34% for FY2021 which is substantially higher than SEM EBITDA margin.
But if we look back a few years when BJFood had not achieved economy of scales for its Starbuck business, BJFood EBITDA margin was at 23.9% for FY2020 and 15.4% for FY2019. It was only when Starbucks embarked on aggressive expansion of its higher-margin drive-thru format stores from 2019 then its margin expanded very fast.

I see similar trend in 7-11 business as it expands on the high-margin 7-Cafe stores which enjoy almost double transaction per pax than traditional 7-11 convenient stores.

Posted by treasurehunt > 2022-11-04 11:44 | Report Abuse

Not much choices to SEM besides disposing Caring unit to pare down the borrowing levels and the extra cash for investing in 7 cafe business.

Posted by dragon328 > 2022-11-04 11:52 | Report Abuse

SEM has a huge fixed overhead costs (selling & distribution, administration costs), i.e. shop rentals, labour costs, electricity & water bills etc, of RM470m for 6 months ended 30 June 2022, or 26.4% of revenue.

If transaction per visit increases by 10% while fixed costs remain, revenue will increase by RM357 million a year and EBITDA will increase by almost the same amount to RM800 million giving an EBITDA margin of 22.5%, which would catch up to BJFood's level of EBITDA margin for FY2020.

Posted by dragon328 > 2022-11-04 11:59 | Report Abuse

by then, pretax profit would jump by a much larger factor, i.e. RM800m (EBITDA) - RM194m (depreciation) - RM63m (interest costs) = RM543 million, or 185% increase from current level of RM190 million.
Applying a tax rate of 25%, net profit would come in at RM407 million or EPS of 33 sen.
Applying a normal PER of 20x, SEM would be worth RM6.60 per share.
Applying a 5-year average PER of 31x, SEM would be worth RM10.20 per share.

Posted by treasurehunt > 2022-11-04 11:59 | Report Abuse

The biggest problem to SEM now is lacked of cash to finance the growth of 7 cafe and Caring unit. Somemore, hiking in interest rates will squeeze existing the bottom lines level.

Posted by dragon328 > 2022-11-04 12:06 | Report Abuse

SEM convenient store business has already been registering encouraging growth in transaction value since it started the 7-Cafe business format, with transaction ticket per pax at RM8.43 for 2QFY2022 vs RM7.31 for 2QFY2021 or an increase of 15%.
It was reported that a 7-Cafe store registered an average transaction size of over RM12 per pax, compared to just RM6.00 per pax for a traditional 7-11 convenient store. As SEM converts more traditional 7-11 stores to 7-Cafe format (just like BJFood build more drive-thru format store of Starbucks), average transaction ticket will increase over time for the group convenient store business.

Posted by treasurehunt > 2022-11-04 12:08 | Report Abuse

When i read 'EBITDA' word, it reminds me of GPacket CEO using this word non stop to boost the prospect of the business in the many articles published by the The Edge few years ago. Lolz

Posted by dragon328 > 2022-11-04 12:08 | Report Abuse

As I already pointed out, SEM has very strong operating cash flows of over RM300 million a year, it will not have problems of lack of cash for expansion which just requires about RM75m a year
@treasurehunt, pls recheck your figures from SEM latest quarterly report

Posted by dragon328 > 2022-11-04 12:09 | Report Abuse

EBITDA is an important indicator as it excludes the non-cash items like depreciation and amortisation

Posted by treasurehunt > 2022-11-04 12:10 | Report Abuse

In the end, disposal of Caring unit would be the best option available to SEM now.

Posted by dragon328 > 2022-11-04 12:10 | Report Abuse

Even after I factor in the depreciation & amortisation and the interest costs of RM63m, SEM would see its pre-tax profit jumping by over 100% in next 2 years

Posted by dragon328 > 2022-11-04 12:11 | Report Abuse

I agree with you that disposing of Caring at a good price is a good option for SEM now

Posted by treasurehunt > 2022-11-04 12:11 | Report Abuse

The rest is secondary. First priority is to sell Caring.

Posted by dragon328 > 2022-11-04 12:13 | Report Abuse

If SEM can get a valuation of RM1.5 bn to RM1.8 bn for Caring or a PER of 35x to 40x, then it will be a good value to monetise it

Posted by dragon328 > 2022-11-04 12:13 | Report Abuse

but it is not up to us to decide whether to sell Caring or not, it depends on whether SEM can get a good offer

Posted by dragon328 > 2022-11-04 12:15 | Report Abuse

of course, disposing of Caring now will give the share price a push, but what if the offeror sticks to RM1.3 billion offer?

Posted by treasurehunt > 2022-11-04 12:16 | Report Abuse

RM 1.2 billion cash for Caring unit is good enough to SEM in the lowest scenario or pocket cash RM 1 billion (75% stakes)

Posted by treasurehunt > 2022-11-04 12:18 | Report Abuse

The problem is that investors don't dare to pump in more capital into highly geared SEM now.

Posted by dragon328 > 2022-11-04 12:20 | Report Abuse

the share price collapse over the last 2 days might be caused by insiders selling or goreng kaki pulling off ahead of slowing of SBB, I do not know who

The volumes for these 2 days selling totalled some 7 million shares, and as you have kindly calculated, the net buying of SEM from other parties (other than company SBB) was 8.1 million shares from 7 Oct to 3 Nov, so the selling should ease off from today as most of these 8.1m share buyers should have sold off

Posted by Amazonboy > 2022-11-04 12:24 | Report Abuse

Today fund managers look at free cash flow for investing & based on figures SEM has strong fcc...why need to sell Caring cheap

Posted by dragon328 > 2022-11-04 12:25 | Report Abuse

RM1.3 billion price tag is good enough to me too, as SEM will pocket almost RM1.0 billion cash. It could pay off all its debts and still have RM450 million cash, and would be able to save RM30 million of interest costs a year

Posted by dragon328 > 2022-11-04 12:29 | Report Abuse

Lease liabilities are a class of liabilities but are not strictly borrowings. In the case of SEM, lease liabilities are mainly shop rentals that it enters with shop owners for tenancy of 2-5 years for its over 2000 shop outlet. Current accounting method calls for capitalising of such long term tenancy as a form of liabilities. These lease liabilities are charged out in part in the P&L as lease interests and in whole in cashflow statements as lease liabilities interest & repayment.
So usually we do not add lease liabilities into total borrowings, I would normally treat it as an operating cost

Posted by treasurehunt > 2022-11-04 12:30 | Report Abuse

Many have been shaken out especially retailers. Share buyback is the biggest supporter or behind the rally before collapsing. Low liquidity cause high volitile in share prices.

Posted by Amazonboy > 2022-11-04 12:31 | Report Abuse

VT oso want to make $$...we have to trust his judgment...since he believe can get higher price

Posted by dragon328 > 2022-11-04 12:32 | Report Abuse

Despite the encouraging operating metrix, I still think a deal on Caring should be forth coming soon. Lets go for a good lunch, and will see SEM share price rebound in the afternoon