Apple is everywhere. You read about it on the news, you use the phone / laptops / watch, and even Warren Buffett has invested in the company.
Shares of Apple Have Soared 9% Since Warren Buffett Revealed His Stake (read here)
Well, this post incidentally is not about the Apple company. I like their products. I once had an Apple phone, but am now using a Samsung Android phone (and I think Apple is more user friendly to a tech idiot like me).
I once wrote about my trips to the shopping malls, as trips to the battlefield (see below). It is after all, a place where I can do a bit of ‘scuttle-butting’.. checking out how the stores are doing (lots of traffic & sales vs no traffic at all), new stores opening or closing, etc.
A trip to the battlefield and after-thoughts (read here)
Ok, this post is not about Apple the company. Instead, this post is about the first Apple Premium Reseller in the region – Epicentre Holdings Limited. I think this will be a rather short post.
I can’t help noticing Epicentre stores when I go to malls. As mentioned in its 2015 Annual Report:
“The Group is emphatic on locating its stores within prime districts that experience heavy footfall and this has been a key catalyst to the Group’s expansion both locally and regionally. Today, it operates 7 and 6 EpiCentre stores in Singapore and Malaysia (Kuala Lumpur) respectively, and 3 EpiLife stores in Singapore.”
In addition, to this when I read up about P2P loans / Crowdfunding, its name popped up again (sometimes for all the wrong reasons).
What You Need To Know About Epicentre Holdings Limited’s Latest Crowdfunding Move (read here)
Ok, back to my shopping trips. I was at Suntec City over the weekend, and noticed that the Epicentre store (located at the 2nd storey) was closing. The shelves were mostly empty while boxes were stacked on the floor. Few customers were in the store while the sales staffs look over listlessly.
Another “casualty of war”?
Well, I did not invest in the stock of the company nor did I invest in its loans in Moolahsense. I think beside the fact that I am not into tech (beyond my circle of competence), is the fact that the company has poor financial fundamentals.
A quick look at the annual report, that the company has been suffering from a net loss since FY2013.
While a quick glance in Morningstar shows that earning per share, free cash flow and working capital has been decreasing over the years (with the recent years showing negative EPS and FCF). Which probably explain why it has N.A. P/E.
Oh yes – with no dividends.
In terms of profitability, it is not good as well (see below). Recent ROA, ROE and ROIC are all negative and these have been getting worse over the years, while financial leverage has increased.
Yes, it was out of my radar at the very start already (be it as a stock holding or P2P loans). Well, nevertheless I still see the store every so often in the shopping malls, while I come across Apple products or news almost every day.
However, as much as I like Apple products, after looking at the financials of Epicentre, I have steered clear of it. And I am glad I did.
It would probably not pass my “ability-to-sleep-at-night” test (read here). Yeah, I do treasure my sleep over profits in the stock market.
Peter Lynch, 25 years later: it’s not just ‘invest in what you know’ (read here)
As mentioned in the article above: “Following the market still at age 71, he instead explains his philosophy this way: Use your specialized knowledge to home in on stocks you can analyze, study them and then decide if they’re worth owning.”