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06-12-2025, 11:27 PM
Just adding a slightly different angle here — not so much on the past ASC saga (which has been well-covered above), but on how to interpret Kimly’s current fundamentals through the lens of its latest financial announcements.
One thing that seems under-discussed is how structurally advantaged Kimly actually is in passing through cost inflation, particularly after PWM and raw material increases. Most F&B operators are price takers — but coffeeshop operators occupy a very different part of the value chain. They effectively sit at the intersection of:
What’s interesting is that Kimly has quietly shifted itself over the years toward structural cost control rather than simply relying on scale.
Three observations from the recent figures — all buried in the notes, not the headlines — that might matter more than the usual revenue/NPAT commentary:
1. Rental-to-Revenue ratio has been trending down for years.
The market often talks about Kimly’s outlet count, but the real story is their gradual move towards owning assets or securing longer-tenure leases.
This means that when PWM steps up again in 2024–2025, the company’s ability to absorb and pass through costs is much higher than typical F&B chains, where rental is the single biggest swing factor.
2. PWM impact may be far lower than expected once PWCS (co-funding) is incorporated.
Analysts tend to model PWM as pure cost inflation, but based on sector data, the Progressive Wage Credit Scheme offsets most of the wage step-up for the first two years.
If you look at Kimly’s FY2023 grants (>$2M already), it is reasonable to expect material additional support in FY2024–2025, cushioning margin compression at the group level.
3. The acquisition of cleaning services (Klovex) is more strategic than it looks.
Cleaning labour is one of the most PWM-exposed categories.
By internalising this through Klovex, Kimly is effectively:
The contribution from Klovex is small now, but strategically it gives Kimly a better cost trajectory than most people are modelling for the next 3–5 years.
Putting it together:
While past governance issues have understandably overshadowed discussions, the recent financials — if read beyond the headline numbers — suggest a business that may actually be entering a more stable and margin-defensible phase, rather than the opposite.
Not a recommendation either way, but I thought it might be useful to shift the discussion toward what the numbers are telling us today, rather than the legacy disputes.
One thing that seems under-discussed is how structurally advantaged Kimly actually is in passing through cost inflation, particularly after PWM and raw material increases. Most F&B operators are price takers — but coffeeshop operators occupy a very different part of the value chain. They effectively sit at the intersection of:
- Stallholders (cost-sensitive SMEs)
- End consumers (elasticity varies by product)
- Property owners (HDB/private landlords)
What’s interesting is that Kimly has quietly shifted itself over the years toward structural cost control rather than simply relying on scale.
Three observations from the recent figures — all buried in the notes, not the headlines — that might matter more than the usual revenue/NPAT commentary:
1. Rental-to-Revenue ratio has been trending down for years.
The market often talks about Kimly’s outlet count, but the real story is their gradual move towards owning assets or securing longer-tenure leases.
This means that when PWM steps up again in 2024–2025, the company’s ability to absorb and pass through costs is much higher than typical F&B chains, where rental is the single biggest swing factor.
2. PWM impact may be far lower than expected once PWCS (co-funding) is incorporated.
Analysts tend to model PWM as pure cost inflation, but based on sector data, the Progressive Wage Credit Scheme offsets most of the wage step-up for the first two years.
If you look at Kimly’s FY2023 grants (>$2M already), it is reasonable to expect material additional support in FY2024–2025, cushioning margin compression at the group level.
3. The acquisition of cleaning services (Klovex) is more strategic than it looks.
Cleaning labour is one of the most PWM-exposed categories.
By internalising this through Klovex, Kimly is effectively:
- transforming a cost centre into a margin-controlled subsidiary,
- ensuring compliance with mandatory PWM (reducing operational risk), and
- capturing value that would normally accrue to external vendors.
The contribution from Klovex is small now, but strategically it gives Kimly a better cost trajectory than most people are modelling for the next 3–5 years.
Putting it together:
While past governance issues have understandably overshadowed discussions, the recent financials — if read beyond the headline numbers — suggest a business that may actually be entering a more stable and margin-defensible phase, rather than the opposite.
Not a recommendation either way, but I thought it might be useful to shift the discussion toward what the numbers are telling us today, rather than the legacy disputes.
A stock well bought is half sold - Ben Graham
Price is the most important factor to use in relation to value - Walter Schloss
Price is the most important factor to use in relation to value - Walter Schloss
