| Thakral Corp has been listed on the SGX for nearly 30 years -- specifically 1995 was the year it listed -- but its current core businesses are relatively new and need some familiarisation by investors. Drone distribution. Retirement homes. Fragrances. These are what Thakral is into these days, which is a far cry from when it was better known as a distributor of all things electronics for consumers. |
When it comes to getting itself onto investors' radar, it helps that Thakral has financial performance worth noting. And the company has started reaching out to investors via results briefings in the face of a stagnant stock price and low trading liquidity.
Its story is one of growth and dividend yield, going by some indicators.
To start with, Thakral's dividend payouts over the past 6 years have been steady. On a recent stock price of 63 cents, the indicative yield was 6.3%.
|
Thakral |
FY19 |
FY20 |
FY21 |
FY22 |
FY23 |
1H24 |
|
Dividend |
4 |
3 |
4 |
4.5 |
4 |
2 |
As for the growth angle, Thakral says look at its two primary growth drivers:
- Lifestyle Resorts: The company has a 31.7% stake in lifestyle resorts for people over 50 in Australia, known as GemLife.
- Beauty and Fragrance Business, and Drone Distribution: The former is primarily focused on the Greater China region while the latter, South Asia.
Lifestyle Resorts: GemLife
GemLife is a standout performer in the company's portfolio, operating a unique business model known as the "land lease community" model, where the company sells homes to buyers but retains ownership of the land and facilities, generating recurring site fees.- Current Status: The company has developed 11 communities, with 10 already occupied. They have a pipeline of 6,500 homes, with 1,622 currently occupied.
- Financial Performance: Building homes continues to be profitable, as shown in "share of profit of associates/joint ventures" of S$8.5 million.
Gemlife has secured the land bank necessary to build 6,500 homes, ensuring future growth. - Community Focus: GemLife emphasizes creating a community environment, offering amenities like clubhouses, pools, and recreational facilities.
Beauty and Fragrance Business
The beauty and fragrance business primarily operates in Greater China, with Thakral managing mono-brand stores for premium brands in top-tier cities. The company also engages in e-commerce through its 10% stake in a platform called CurrentBody, which focuses on beauty devices for home use.
- Market Presence: The company operates stores in major shopping malls and sells products through multi-brand retailers like Sephora.
- Growth Strategy: The company is selective in expanding retail outlets, focusing on areas with strong demand.
- CurrentBody: This e-commerce platform has shifted towards private label brands, which now constitute more than half of its revenue, offering higher margins.
Thakral achieved S$66.4 million (+16% y-o-y) in sales of DJI drones in South Asia in 1H2024.
Drone Distribution
Thakral is the exclusive distributor for DJI drones in several South Asian countries, including India. DJI is a global leader in drones.
- Product Range: Thakral distributes drones, gimbals, and action cameras, and is expanding into specialized solutions for agriculture and enterprise sectors.
- Innovations: DJI continues to innovate, offering solutions for crop protection and surveillance, which the company plans to capitalize on.
|
Stock price |
63 c |
|
52-wk range |
57 – 66 c |
|
PE (ttm) |
7 |
|
Market cap |
$80.6 m |
|
Shares outstanding |
127.9 m |
|
Dividend |
6.4 % |
|
1-yr change |
6.8% |
|
P/B |
0.5 |
|
Source: Yahoo! |
|
In aggregate, beauty and fragrance products and drones brought in S$124.3 million in revenue (+28% y-o-y).
This accounts for almost all the revenue (S$128.4 million) recognised by Thakral.
However, gross profit margin (17.5%) was down 4.7 percentage points due to volume sales.
The company has undergone restructuring, reducing its stake in GemLife. But group net profit attributable to equity holders rose 45% to S$10.8 million in 1H2024.
Thakral had S$13.5 million cash as at end-1H2024, up from S$11.3 million six months earlier. Short-term debt stood at S$41.7 million while long-term, S$20.4 million.
Future OutlookThe company is optimistic about its growth prospects across all segments.
There's emphasis on community building in lifestyle resorts, expansion of its beauty market, and driving sales of innovative drone technology. |
See also: THAKRAL: How its Aussie property biz works, why it is biggest contributor
Thakral's 1H2024 PowerPoint deck is here.
