KOOL: Escaping the Cold.!?

Masterkool International Public Company Limited (KOOL) is set to shift the investment to financial and property businesses as its traditional business misting fan and evaporative fan is nowadays facing a decline in profit margin due to an intense competition. To reduce uncertain risks in the future, KOOL decided to invest in other businesses with high profit margins and growth trends.   

 

KOOL is the pioneer of alternative cooling and operates the business of procurement and distribution of the misting fan, evaporative fan, and industrial fan under the brands “MASTERKOOL” and “Cooltop”. Besides, KOOL offers rental services of its products, including designs and installs ventilation systems as well as ozone systems.

 

However, the selling of this type of products so far has some obstacles as they are a seasonal product, which the peak selling period is only in summer. The ongoing climate change and the arrival of Chinese brands to flood the market have significantly put KOOL in a difficult situation on product distribution.

 

Moreover, there is a concern among customers over the health effects of misting fans and evaporative fans.  

 

KOOL’s revenue stands at the average of 500-700 million baht with a little amount of profit, while the net profit margin is only 1% and experiences loss occasionally, prompting a limitation on business growth and expansion.   

 

Recently, KOOL has acquired a financial company Sathorn Sinsub Limited (SS) for the value of 59.4 million baht and has acquired all issued ordinary shares of Capital Link Udonthani Company Limited (CLU) which operates property business in Udonthani province at total purchase price of 92.25 million baht.

 

It seems to be a new hope for KOOL, but in fact both companies are still facing loss.  

 

Sathorn Sinsub was established in 2019 but the Company has a total current liabilities of 295 million baht and the loss was at 17,200 baht, while its subsidiary Capital Link Holding Company Limited despite having a profit, it was very little. In 2019, Capital Link Holding’s earnings was 2 million baht from a total revenue of 4 million baht.   

 

Meanwhile Capital Link Udonthani was founded in 2007, but has been recording losses in the last 3 years. In 2017, the Company booked a loss of 3 million baht from a total revenue of 37 million baht. In 2018, a loss was 2 million baht form 45 million baht of income and in 2019 loss remained at 2 million baht with a total revenue of 23 million baht. 

 

KOOL also has a plan for capital increase in order to pay as consideration for the business acquisition, which would definitely cause a share dilution, leading to a question that will this investment work out..?

 

Well…let’s keep eyes on it.