Rising of the Phoenix
Dear Family, Friends and Partners,
Since we officially started our private investments unit in July 2020, we have been actively looking for the right company in the right sector to invest. Crisis means opportunities and the best time to invest is when you are in the middle of one. This is our view:
1. In all investments, market timing is vital. Coronavirus Pandemic has caused sharp downturn in many industries and retail sector is certainly one of them. Our view is that 10-30% of the retailers will be out of business eventually due to poor cash flows and suppressed sales in the short term. However, business will return once the recovery started and the survivors will prosper. The growing pie will be shared by fewer and stronger players, leading to higher growth. This is just business logic.
2. To steer through a crisis, a good management team is paramount. A versatile strategy and corporate restructuring are needed to adapt to the changing business conditions during and beyond the crisis. Execution means everything and only a strong and experienced team can do that. Good track record is often under-rated.
3. Business model and plan are key determinants of future profitability. Branding matters and you want to be price giver rather than price taker, especially during tough times. High margin products will mean bigger buffer for pricing strategy. Omni-channel will give seamless customer experience and thus better sales. Regional expansion is the future as a diversified customer base to provide better growth potential.
After searching relentlessly, we believe we have found our first target company which has all the highlights cited above. Business recovery has definitely started but we anticipate stronger growth ahead. The world no doubt has become more uncertain but we are ready to profit from the disruptions.
We hope you will join us in this exciting journey. If you believe we can be of service to you, we welcome any enquiry.
Best Regards,
Scott Lim
Founding Partner
7th March 2022
