CFA Society Singapore
SINGAPORE (Nov 27): Catalist-listed coffeeshop operator Kimly has asked for the trading of its shares to be suspended. The company said regulators have asked for certain documents and information it did not specify.
The suspension is also because of Kimly’s intention to update shareholders for an acquisition it did not specify, and also for its earnings for the full year ended Sept 30 2018 that has yet to be reported.
Since the company was listed back in March 2017, it has made two acquisitions. The first was for a coffeeshop and a canteen for a total of $1.5 million. The sellers were paid new Kimly shares at 50 cents each, a 22.5% premium over Kimly’s then traded price.
The more recent acquisition, announced as completed on July 2, was for a drinks company called Asian Story Corporation. In contrast to the coffeeshop and canteen acquisitions which was paid with shares, the purchase of the drinks company was paid via $16 million in cash, which was 35.7 times ASC’s net tangible asset value of $448,000 as of March 31 2018.
The vendor is one Wang Chia Ye, which Kimly says is unrelated.
Besides selling drinks in local favourite flavours such as chrysanthemun tea, soya bean and bandung under its own brand “Asian Story”, the company distributes other companies’ products as well. “Asian Story” claims to have a 7.7% market share among the so-called Asian drink market in Singapore.
For the 3Q ended June 30 2018, Kimly reported earnings of $5 million, down 4.8% y-o-y; revenue in the same period was up 4.2% y-o-y to $49.9 million.
In September this year, Kimly was in the news for reportedly hiring Alain Ong Eng Sing, former CEO of Japan-owned drinks company Pokka International. Ong’s wife, actress Vivian Lai, was a long-time celebrity endorser of the Pokka brand. Ong, who was Kimly’s non-executive director at time of IPO, stepped down in January this year after the AGM.
In a clarification statement to the SGX on Sept 30, Kimly neither confirmed nor denied the appointment of Ong, which was reported by Chinese evening paper Lianhe Wanbao. “We wish to clarify that the Company does not comment on news or information from third party sources and urge shareholders of the Company to be cautious and discerning in assessing any news or information regarding the Company or its subsidiaries.”
Kimly was one of the hottest IPOs of 2017. Its offer for 173.8 million new shares at 25 cents per share was 8.3 times subscribed. Kimly shares more than doubled to 51 cents on its third trading day on March 22 2017. It last traded at 28 cents.
PrimePartners Corporate Finance was its IPO sponsor.