Saturday, February 10, 2018

EPF Returns / Pictureworks Nabs Ocean Park As Client

As expected but pleasant news nonetheless, was EPF's 6.9% declared dividend for 2016. All the more so in the present correction phase for global equities. 



The Comparison With UK & European Pension Funds


In the UK, the average fund ended 2016 up 15.7 per cent. The last time pension funds returned more than 15 per cent was in 2009, when recovery from the 2008 crash saw average growth of 22 per cent.  It represented a 13 percentage point increase on pension fund returns of 2.6 per cent in 2015 and the fifth consecutive year of pension growth, after the 4.6 per cent loss in 2011.

Comparison with UK pension funds is not really fair or comparable as their fund allocation usually are more aggressive, and they may also lack access to local government bonds inherent "structure and returns, and maybe safety". But I brought this up to show how volatile the returns can be, in the case for UK pension funds. 

The same can be said for the European pension funds in the table. I'd rather see my country's pension fund making around 5% a year, year in year out, than to see volatility. We need our pension funds to be dependable, not flamboyant.

Look at the returns for EPF below, in particular for 2008/2009 or even 1998/1999. During the former period, we had the subprime financial meltdown. In the latter period, a more relevant Asian financial crisis prevailed, but EPF maintained decent dividends. EPF deserved a lot more credit than what they get from Malaysians in general. It is so difficult to maintain a return of around 5% a year for over 20 years. A lot of it has to do with their objectives, and the structure that they have laid out and the way they executed decisions. Their independence MUST and SHOULD never be compromised (read between the lines). 

As the size of fund grows, over the last 3 years in particular and onwards - it has gotten more difficult to maintain similar dividends as basically, you are running out of ringgit assets to invests in. Hence their decisions to invest more overseas and even in regional/global private equity are necessary. 

On that note, it is imperative that "sustainable, proven, stable, sizable" assets such as PLUS should never leave the stable of EPF. Even if the price offered is tremendously attractive, say at a forward PER of 40x, because such a high price will and can only come back to haunt us via higher toll rates.


Kadar Dividen
Tahun
          Peratus             (Simpanan Shariah)
        Peratus            (Simpanan Konvensional)
2017
6.40
6.90
2016
-
5.70
2015
-
6.40
2014
-
6.75
2013
-
6.35
2012
-
6.15
2011
-
6.00
2010
-
5.80
2009
-
5.65
2008
-
4.50
2007
-
5.80
2006
-
5.15
2005
-
5.00
2004
-
4.75
2003
-
4.50
2002
-
4.25
2001
-
5.00
2000
-
6.00
1999
-
6.84
1997 - 1998
-
6.70
1996
-
7.70
1995
-
7.50
1988 - 1994
-
8.00
1983 - 1987
-
8.50
1980 - 1982
-
8.00
1979
-
7.25
1976 - 1978
-
7.00
1974 - 1975
-
6.60
1972 - 1973
-
5.85
1971
-
5.80
1968 - 1970
-
5.75
1965 - 1967
-
5.50
1964
-
5.25
1963
-
5.00
1960 - 1962
-
4.00
1952 - 1959
-
2.50



For a better case study, just go and research and compare the similar HK Fund or the much maligned but steady CPF. Below is the volatile HKMPF returns.



























Pictureworks Nabbing Ocean Park As Client


Pictureworks (Hong Kong) Ltd has inked a four-year exclusive partnership with Hong Kong’s theme park operator Ocean Park Corp to provide the latter end-to-end photo imaging systems. The exclusive partnership will see Pictureworks deploy its state-of-the-art imaging solutions with Ocean Park being the first partner to enjoy its new proprietary Facial Recognition technology as well as PictureAir solution.


PictureAir has been successfully implemented across various theme parks and attractions in more than 30 sites in over 15 countries. The credibility and acceptance of Pictureworks' apps cannot be underestimated. How else can you get HK Disneyland and Shanghai Disneyland as your clients. Not to mention the  Kidzania outlets as well. 
Securing Ocean Park HK looks like only the beginning of a great year for Pictureworks in HK/China. Apparently they have mobilised marketing to other major theme parks in China this year. 
Current Client Roster:

PRC
- Shanghai Disney Resort
- Oriental Pearl Tower, Shanghai - Shanghai Ocean Aquarium


Hong Kong
- Hong Kong Disneyland Resort - Sky100


Singapore
- Singapore Flyer
- Gardens by the Bay - Snow City
- KidZania Singapore


Malaysia
- KidZania Kuala Lumpur
- Sanrio Hello Kitty Town, Johor Bahru
- Thomas Town, Johor Bahru
- LEGOLAND® Malaysia, Johor Bahru (including theme park and water park) 



The current top 10 theme park operators globally, marked by their annual attendance:

1)  Walt Disney   140.4m
2)  Merlin Entertainments  61.2m
3)  Universal Parks   43.2m
4)  OCT Parks, China   32.2m
5)  Fantawild, China   31.6m
6)  Six Flags, USA   30.1m
7)  Chimelong, China   27.3m
8)  Cedar Fair, USA   25.1m
9)  Seaworld, USA   22m
10) Parques Reunidos   20.8m

Looking at the numbers, there is a deliberate strategy to concentrate in China. The fact that they have now secured HK and Shanghai Disney, and now Ocean Park HK, bodes well for their client acquisition strategy this year. Owing to their superior app product, it is likely to make further inroads this year. Chime Long and Six Flags should be their next possible conquests.

https://content.sixflags.com/haiyan/news/

Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company, and its development partner, Riverside Investment Group Co. Ltd., today announced the addition of three more parks to be built in China. Six Flags Kids World—the first park of its kind and designed especially for families with young children—will be built adjacent to both Six Flags Zhejiang and Six Flags Chongqing. Additionally, the all-new Six Flags Adventure Park, offering high-energy outdoor thrills, will adjoin the Six Flags Chongqing complex. 

http://int.chimelong.com/en_US/parks

Chime Long has quite a number of parks/resorts in Guangzhou and Zhuhai.

Profit Guarantee - Looking at the published profit guarantee to PUC, it is likely to have been conservative. Tagging another 30% to those figures would not be far fetched at all if you include Ocean Park HK as well. 

  1. (i)  the PW Group shall achieve a profit after tax (“PAT”) of RM14,800,000 for the financial year ending 31 December 2018 (“2018 Guaranteed Profit”); and
  2. (ii)  the PW Group shall achieve a PAT of RM20,500,000 for the financial year ending 31 December 2019 (“2019 Guaranteed Profit”)

Strategic Emphasis On China/HK - Roping in Ocean Park HK, with Shanghai Disney and HK Disney already secured, will further enhance the "attractiveness" of Pictureworks as a highly desirable listable company for Shanghai, Shenzhen or HK exchanges. Sometimes you can see good planning and good execution a long way ahead.

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