转帖：星报－Fiamma的前景与CEO访谈

看了星报的访谈后，我想我本打算在７月才开始的背水一战必须提早结束了。这篇文章写得非常的正面，Fiamma的前景与我的推断相去不远，只是Jalan Yap Kwan Seng的发展计划总值却比我预算的高出一倍（RM600mil的GDV）。我相信Fiamma明天必定会大涨，价格也会距离我早前所设立的目标越来越近了，因此我打算慢慢退出了这场战役。无论如何，我还是会继续分享它的核心业务－贸易，然后做个总结，Fiamma为我在2014年上半年的投资画上了完美的句号。接下来的半年，我会跟随寒江兄出战Weida，这次我跟船就好，当然若有时间的话，我也会分享一些Weida的功课。在此我恭喜有跟随我买入Fiamma的小股东，也很庆幸自己又再次侥幸过关了。再加上Fimacorp的红股与股票拆细都为我锦上添花，今年投资／投机可以说是非常的幸运了。

Fiamma - Odd business mix bears fruit
Published: Saturday June 28, 2014 MYT 12:00:00 AM

SEVEN years ago, Fiamma Holdings Bhd made a bold venture into property development despite it not being synergistic with its core business of distributing home appliances.Today, however, the group says it is comfortable with its position in both business segments, adding that its property venture has begun to bear fruit for its bottom line.

Fiamma – whose market cap stands at RM256mil – started selling home appliances in 1979 in Johor. Among the household brands it distributes today are Elba, Faber, Tuscani and Braun. The company acquired two parcels of land in the KL city centre in 2007, but its plans to develop them faced several snags, as it sorted out land title and approval issues.

This year, Fiamma is targeting the completion of its maiden property project in October with a gross development value (GDV) of RM150mil. The 23-storey office suite tower, Menara Centara, with 10,000 sq ft of retail space is located on Jalan Tuanku Abdul Rahman in Kuala Lumpur. Chief executive officer and managing director Jimmy Lim Choo Hong says 35% of the development will be kept for recurring income, and that the group has signed a tenant for nine years. The average selling price is RM700 per sq ft.

For the financial year 2013 (FY13), property development contributed 9.6% to group revenue and 11% to net profit. Most of the contribution came from the sale of its Menara Centara office suites, while a fraction was from the sale of its landed houses in Kota Tinggi, Johor. Fiamma’s full-year net profit for 2013 was RM34.69mil, 29% higher than the RM26.92mil achieved in FY12.

“For this financial year onwards, the contribution from the property division should be higher,” says Lim without giving any projections. Now that its property development business is taking off, Lim says the group’s strategy is to launch one or two projects a year. “How many projects we launch will depend on our cashflow. Cashflow comes first,” he says in an interview.

Next year, Fiamma is targeting to launch two serviced apartment projects in the Klang Valley - one in the city centre and one in Bandar Manjalara. The city-centre serviced apartment is situated on Jalan Yap Kwan Seng on a 60,000-sq-ft plot of commercial land behind the Public Bank officer tower. Lim says the project, with a GDV of RM600mil, will have two blocks, making up 46 storeys of more than 400 units based on a plot ratio of ten. The selling price has not been finalised yet, Lim adds.

The total sellable floor area for this project would amount to over 400,000 sq ft, according to its building design Fiamma is currently seeking approval for. “The current market has an appetite for small unit properties, especially for those buying their first home,” he says, noting that Fiamma has thrown out its initial plan of building a Grade-A office development.

“We had earlier submitted proposals for a Grade-A office, but we would need to sell it en bloc, and the current market won’t be able to take it up,” Lim says on some of the adjustments Fiamma has had to make in keeping up with market trends. This project will be launched in the first half of 2015 and Lim plans to launch it in overseas markets like Hong Kong and Singapore before Malaysia.

Its other project is the redevelopment of its three-acre Bandar Manjalara land adjoining its headquarters. Currently, Fiamma is using this portion of the land for its warehouse facility. “But given the market rate and our need for more space, we will be moving our warehouse to Klang where we have bought a piece of land to build a bigger facility.” The project, with a GDV of more than RM300mil, will also offer over 400 units of serviced apartments in two blocks, albeit with bigger floorplans offering up to three rooms. Unlike its city-centre counterpart, the Bandar Manjalara project will cater to young local executives and will be priced around the RM500,000 range.

Apart from these two developments, Fiamma has also launched a serviced apartment project in Johor Baru and has an ongoing link house development in Kota Tinggi, Johor. All its land acquisitions are paid up, leaving Fiamma with zero net gearing.

Although Fiamma is serious about making its property development business work, it has no plans to change its core trading business. “We are not a full-time developer and do not intend to change our business into 100% property development,” Lim points out.

Fiamma’s steady and long track record in the trading of home appliances is reason enough for the group to keep the business. This matured business division has enjoyed 35 years of trade, and is still growing, albeit at a slower pace. Lim says the group continues to expand its product offerings, especially to consumers.

Aside from home appliances, it also distributes imported kitchen fittings under the Rubine and Haustern brands, as well as medical devices under brands like Omron and Charder for both home and professional use. Lim says the impetus for Fiamma to diversify into property development was due to his personal experience in the sector, having started his private business developing projects in Johor some 15 years ago.

“Also, our home appliance business was already quite saturated because the domestic market is not big enough,” he says. A fund manager who has met with the management says that for its home appliance segment, Fiamma operates on a comfortable gross margin of above 20%.

“The trading and distribution business has been growing continuously since 2005 and is generating a profit-after-tax and minority interest of around RM27mil per annum.”

He notes that the business segment requires minimal capital expenditure, but needs some working capital when growing. “If we took out the five parcels of land and their investment property from the books, we would see that this business has a consistent net-cash return on capital employed of 30% per annum,” he adds.  Fiamma was last traded at RM1.99, having risen 8.74% year-to-date. According to Bloomberg data, the stock is trading at a price-to-earnings of 6.74 times.