Maxi-Cash Financial Services Corporation

[CityFarmer]

Let me give my view on Maxi-Cash

Capital intensive.
Shanrui_91 and the rest view it is a limitation. I saw it as high entry barrier to block new comer into competition. Maxi-Cash had a competitive edge by strong support from Aspial as largest shareholder, and by taping into capital market as listing company, on top of just bank or financial institute debt.

Market too small (pie too small)
The total amount of loan given by pawnshop in 2011 is 4.9 Bils, the amount in 2010 is 2.7 Bils. With the growth rate and limited player in to industrial, i can safely conclude the market is not too small for Maxi-Cash. BTW, Maxi-Cash only have 13% share in 2011 market size

High interest rate might kill the industrial
I agreed high interest rate will depress the profit of pawnshop, but it is unlikely to kill the industrial. Pawnshop survive since i am arrive in this world, i am confident that it will continue to survive.

When interest rate raise, Maxi-Cash has edge to cash-call with investors and/or shareholders, while other non-listed pawnshops might only have bank debts

I will not surprise to see Moneymax's IPO in near future.

[shanrui_91]

you are right, I view capital intensitivity as a disadvantage as I am a strong believer in ROA and ROE

Btw, i found another very interesting fact.

http://www.maxi-cash.com.sg/pdf/Maxi-Cas...0439PM.PDF

According to the ballot result, Mother + Brother + Sister-In-Law of Koh Wee Seng are allocated a total of 10.8 million shares which works out to be 3.63%. If they did not sell their share, that will mean free float is only 100- 81.08 - 3.63-1.31 =13.98% currently.

For the Kohs, they have 2 choices for purchasing of share - Aspial or Maxi-Cash. Given that Aspial owns 81.08% of maxi-cash, they can purchase Aspial even if they have confidence in growth of Maxi-cash. Does their actions implies that Maxi-cash is a better buy than Aspial?

The Kohs currently own a total of 77% of Aspial.

[CityFarmer]

you are right, I view capital intensitivity as a disadvantage as I am a strong believer in ROA and ROE

Btw, i found another very interesting fact.

http://www.maxi-cash.com.sg/pdf/Maxi-Cas...0439PM.PDF

According to the ballot result, Mother + Brother + Sister-In-Law of Koh Wee Seng are allocated a total of 10.8 million shares which works out to be 3.63%. If they did not sell their share, that will mean free float is only 100- 81.08 - 3.63-1.31 =13.98% currently.

For the Kohs, they have 2 choices for purchasing of share - Aspial or Maxi-Cash. Given that Aspial owns 81.08% of maxi-cash, they can purchase Aspial even if they have confidence in growth of Maxi-cash. Does their actions implies that Maxi-cash is a better buy than Aspial?

The Kohs currently own a total of 77% of Aspial.

I had focused on this point as well, when i read the balloting result.

Since the mother+brother+sister-in-law are not insiders, so official free float does not include their shares. But i will assume they are long term investors.

You might be disagree, but i will say yes, Maxi-cash is a better buy than Aspial.

That bring me a question, major shareholders did not sell, and Koh only brought 3.8 Mils share so far, among the 146 Mils transacted in the last 2 trading days. So traders are buying and selling with only 10-15% shares floating. The market price will either shot-up due to covering of the short, or shot-down due to cutting-lose of the long in the next few days.

[CityFarmer]

The Maxi-Cash share price continue to move up today, closed @ $0.475 with volume of 81 Mils share.

Tomorrow is the settlement day for the last Friday trading.

I estimated current number of floating share is 40-45 Mils share in the market, but in the last 3 days, trading volume is 1.5x-2x of that.

Is there a possibility of insufficient share to fulfill complete settlement?

[CityFarmer]

The Maxi-Cash share price move down for the 1st time, after listing. Price move down more than -6% to S$0.445.

Observations on the volume distribution
- Sell down in the morning between 9am-1030am
- Buy up again between 1030am-1230pm
- Sell down again till 5pm

The share price does not go down as much as i expected. Will continue to observe in the next few days

[shanrui_91]

seemed like interest has waned for now at least. In the long run, I supposed traders will not want to play with this type of illiquid stock given its low free float and market cap

[CityFarmer]

By 930am today, the Maxi-Cash has more sell-down vs buy-up transactions, with ratio of approx 2x-4x on different transaction lot size. Share price move down by -2.2% to $0.435.

I am anticipating that the share price will be re-adjusted down in the near future.

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seemed like interest has waned for now at least. In the long run, I supposed traders will not want to play with this type of illiquid stock given its low free float and market cap

IMO, it is highly irrational to play with this type of stock by traders, even under low interest rate.

The down-side risk is much higher than the up-side profit. It is not a worthy game for a rational trader

[CityFarmer]

The Maxi-Cash share price move down marginally today. Price move down -1.1% to S$0.44 at volume of approx. 14 Mils shares

Observations on the volume distribution
- Sell down > Buy up most of the day except during afternoon 2pm-3:30pm

Should have clearer picture by end of this week, after the settlement of the first 3 days of crazy trades.

[sgd]

I'm not vested but if you look at pawn shop business in general it is cater to customers who are mostly blue collar or labourers. The places where these people tend to congregate usually a pawn shop will not be far away.

I think in the past clementi was a gathering point for workers in nearby industrial areas. in little india there is a high concentration of indian labourers who go there for recreation on their weekend. On sundays there will be company buses will park along hampshire road outside the LTA office and bring workers to little india to go shopping and a little R&R or picnic in the open areas of farrer park nearby you can pawn shop outlets, same thing also in geylang where labourers gather you will find a few pawn shops there.

in olden times pawn shop also doubled as remittance, there's easy money to be made in remittance go to people's park see there's a lot of remittance shops around, deposit money here then call other country remittance office to release the money there and earn from remittance fees and maybe also foreign exchange difference.

[CityFarmer]

I'm not vested but if you look at pawn shop business in general it is cater to customers who are mostly blue collar or labourers. The places where these people tend to congregate usually a pawn shop will not be far away.

I think in the past clementi was a gathering point for workers in nearby industrial areas. in little india there is a high concentration of indian labourers who go there for recreation on their weekend. On sundays there will be company buses will park along hampshire road outside the LTA office and bring workers to little india to go shopping and a little R&R or picnic in the open areas of farrer park nearby you can pawn shop outlets, same thing also in geylang where labourers gather you will find a few pawn shops there.

in olden times pawn shop also doubled as remittance, there's easy money to be made in remittance go to people's park see there's a lot of remittance shops around, deposit money here then call other country remittance office to release the money there and earn from remittance fees and maybe also foreign exchange difference.

I am not sure currently the pawnshop customers are local or foreigners. Base on my limited observation on mall-base Maxi-Cash pawnshops, the customers seem are mostly local and white collar. Probably customer base changes.

SingPost offering remittance service now, which is much cheaper than people park ones, $5-$9 (SingPost) charge vs $18 (People park), but with longer time 3 days (SingPost) vs same day (People park). I am not sure whether the remittance service in People park will survive, and definitely Maxi-Cash will not participate in this service.

Having said so, nobody stop Maxi-Cash continue to innovate and provide new services to their customers.