KUCHING: Pelikan International Bhd’s (Pelikan) success in securing the rights to use Porsche design would enhance the group’s image as being a leading writing instrument maker.
EXCLUSIVE: Renowned brand Porsche design’s writing tools, which amongst others include for instance, pens targeting the high-end market, are expected to contribute marginally to Pelikan’s earnings from financial year 2011 onwards.
OSK Research Sdn Bhd (OSK Research) in a research report cited that the group’s credibility in obtaining the rights was nonetheless a testament of the group’s ability to produce quality writing instruments.
It believed the sales of Porsche writing instruments would continue to grow as Porsche design aims to increase the number of stores from the current 84 to more than 100 this year.
Meanwhile, the research firm noted that revenue contribution for the distribution of Porsche design would be minimal to Pelikan as writing tools were only one of the many products manufactured by Porsche as well as its niche market.
To recap, Pelikan announced last Thursday that it had entered into a manufacturing and distribution licence agreement with Germany based Porsche Lizenz-und Handelsgesellschaft mbH & Co KG (Porsche) for the use of the “Porsche Design” trademark on its writing instruments.
The agreement provides five-year rights to Pelikan to manufacture and distribute writing instruments under the “Porsche Design” brand worldwide starting January 1, 2011.
Likewise, the exclusive manufacture and distributorship of Porsche writing tools was formerly given to Faber-Castell AG, Germany and the five-year rights is currently given to Pelikan.
The “Porsche Design” is a luxury brand founded in 1972. Porsche’s product portfolio includes classic men’s accessories, a sport and fashion collection as well as electronic
products and a men’s fragrance range.
The products are designed at the Porsche Design Studio, one of the best known design houses in Europe, in Zell am See, Austria.
Its products are sold worldwide in owned stores, shop-in-shops, high end department stores and exclusive retail outlets.
In the meantime, Porsche Design group’s revenue continued to grow despite the challenging operating environment in the previous year due to opening of new franchise retail outlets.
Its revenue increased marginally to 63.5 million euros in financial year 2009 from 63.3 million euros in financial year 2008. There were also fewer licences issued by Porsche last
year.
Therefore, as the manufacturing and distribution of Porsche Design writing instruments will only start in 2011, OSK Research reiterated its financial year 2009 and 2011 earnings forecast for Pelikan at RM44.7 million and RM110.2 million respectively.
The research firm pegged the target price of its share at RM2.57 per share.
However, the ex-date of the group’s rights issue was fixed tomorrow (January 6, 2010) and hence, OSK Research’s fair value for Pelikan’s ex-rights is RM1.71 per share.