1.0 COMPANY PROFILE
POH KONG founded in 1976, as a pioneer jeweller has transformed itself from a traditional jewellery until the middle of the recognition of the most important jewellery brand as synonymous with excellence associated with the design, quality and superior craftsmanship. Listed on Bursa Malaysia since 2004, POH KONG has been hailed as the largest jewellery retail chain in Malaysia with a network of 100 branches across the country with manufacturing facilities. It has been successful in developing and promoting its own brand and become the sole distributor for many international brands. POH KONG in-house brands including Tranz, Happy Love, Anggun, The Art of Auspicious, Bunga Raya Gold Bar, and many more to come. POH KONG is the licensee for Disney Collection is the sole distributor for luxury Schaeffer pearls from around the world. POH KONG using a differential image of the brand and retail concept to meet the needs of different customers. Apart from POH KONG and Diamond & Gold outlets, retail concepts such as POH KONG Gallery, Diamond Boutique, Jade Gallery, Tranz Boutique and Oro Bianco are available. 2.0 The General Environment
Jewellery retail chain Poh Kong Holdings Bhd expects the price of gold to be on an upward trend this year(2012), fuelled by demand for the precious metal as investment. Movement of gold prices would depend on the political stability in Iran, where Poh Kong gets its supply. Poh Kong’s AGM expect that if war starts in iran, gold prices may increase by 30%. Last year, gold hit above US$1,900 per ounce but has since fallen to US$1,620 this month. Demand for gold globally is still on upward trend. The company are still seeing double-digit growth globally on gold bullion and bars, so there is still a potential for the company to move forward. Besides that, the high price of gold would bring higher margins for Poh Kong as the cost is passed down to retail customers. On bank offering gold investment, although there is a bit competition, Poh Kong’s sales are not affected as customers still come bak to them. 2.2 Economic
Poh Kong Holdings Bhd is expecting a better financial year ahead, spurred by increased demand for gold from the public. When the price of gold escalates, the company’s selling price to retail customers increase in tandem. A higher gold price, therefore, has a positivr impact on the revenue. The biggest jeweller in the country by the number of outlets says its sales are not affected by the volatility in gold prices. Instead, sales of gold bars increase, as the rich look for a safe investment. Analysts say the company can ride the increased appetite for gold as a “safe investment class”, especially amid economic and financial uncertainties. The US Federal Reserve’s decision to pump more money into the financial system with a second round of quantitative easing will also mean more money going into commodities like gold, which will drive prices even higher. However, this would also mean higher inflation, which would fuel the upward trend of gold prices. For FY2010, Poh Kong reported an 11.24% rise in net profits to RM31.61 million on the back of a smaller 3.62% increase in revenues to RM561.24million. EPS was 7.7 sen, up from 6.93 sen the year before. Net profit and operating margins increased in FY2010 to 5.63% and 9.8%, respectively, from 5.25% and 9.0% in FY2009. 2.3 Social
Poh Kong Group's CSR initiatives are in line with Bursa Malaysia's framework centered towards the workplace, marketplace, community and environment. As a socially responsible company, the corporate citizenship is integrated into a sustainable business model that goes beyond shareholders interests, for the betterment of society. Corporate’s CSR programme embraces responsibility for the Company's actions and encourages a positive impact through its activities by its employees, caring for consumers, giving back to the under privileged through societal...
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