Kimly Shares Take a Chill Pill: Why They’re Hitting the Pause Button
The biggest coffee spot in Singapore has just hit the “hold‑on” button for its stock. The move comes just a week after Kimly Limited asked market movers to freeze trading while they hash out a big announcement.
What’s the Big Picture?
Kimly runs a swarm of cafés, food stalls, and quick‑service spots across Singapore’s heartland. The temporary stop in trading isn’t because of a bang‑on‑broke. Instead, the company needs to play the waiting game while it pulls together a few key pieces of information for investors:
- Regulatory requests for certain documents and data.
- Updates on a recent takeover of Asian Story Corporation (ASC), a drinks haven that specialises in quirky flavours like chrysanthemum, water chestnut, and lychee.
- The unaudited full‑year results for the period ending 30 September.
Why the Speculation?
Analysts and investors are trying to piece together how all of this lines up with Kimly’s recent acquisition of ASC on 2 July for a cool SG$16 million. The deal gives the former owner, Wang Chia Ye, an “earn‑out” topping up to SG$8 million if ASC pulls in more than SG$2 million pre‑tax profit that year – otherwise it’s prorated.
Meanwhile, the company’s ex‑director Alain Ong, who was once the CEO of Pohka, has been linked to ASC. His exit from Kimly back in January stirred speculation that he might hop back in later on, but Kimly hasn’t confirmed anything.
So What Does This Mean for the Bottom Line?
One seasoned analyst gave a tell‑tale that the “financial numbers look fine” but believes there could be a disclosure gap concerning the ASC deal — possibly related to a director’s interest. The same analyst noted that ASC’s earnings will “boost Kimly’s FY18 results.”
A Quick Run‑Down of Kimly’s History
Founded in 1990 by chairman Lim Hee Liat and friends, Kimly went public on the Singapore Exchange’s Catalist on 20 March 2017. It offered 173.8 million new shares at 25 cents each: 170 million were sold privately, leaving only 3.8 million for the public. Post‑IPO, Lim Hee Liat was the majority owner with 42.4 percent.
The IPO hauled in SG$33.4 million, earmarked for acquisitions, joint ventures, new outlet openings, and refurbishments.
Market Reaction
Kimly’s stock had jumped from its IPO price to around 55 cents but has since tumbled to roughly 28 cents — that’s a 14‑times multiple of its estimated FY18 earnings. A tech-savvy analyst praised Kimly’s solid cash‑flow and strong balance sheet, pointing out that the company was still cash‑flow positive and comfortable with its banking reserves.
Financial Snapshot
- Third‑quarter net profit slumped 4.8 percent to SG$5 million, even though revenue grew 4.2 percent to SG$49.9 million.
- Total cash and bank balances topped SG$84 million at the close of June 2018.
In short, customers and investors are waiting to see how Kimly wraps up its ASC acquisition and how that will tweak the future earnings game. Until then, the stocks are currently put on the shelf.
