Standard & Poor’s calls their Peer Group “Specialized Consumer Services”. There are five companies in this sub-sector of “Major Specialized Consumer Services.” It’s quite a niche market, but only three are more closely related: Takung Art Co. Ltd (OTCQB: TKAT), Tiffany & Company (NYSE: TIF) and Sotheby’s (NYSE: BID).
No doubt you’ve all heard of Tiffany’s and Sotheby’s, but when you stack them up against the new comer, Takung Art Co. Ltd, the China connection wins – hands down!!
In a stock report dated September 29, 2016, it states that TKAT is in the process of listing to an exchange, based on a quote from Takung Art Co. Ltd CFO in a teleconference for shareholders. VIEW REPORT NOW Now that might not mean much to you, but…. TKAT has over 800,000 users – the bulk of which are in China. It is reported that tens of thousands (we’re not making this up) want to trade in Takung Art Ltd stock, but because it’s not on a listed exchange, they can’t. Hence the importance of its CFO ADMITTING that they were in the process of listing to an exchange.
There are only 1.3 million shares in TKAT’s float against little more than 10 million shares issued and outstanding. Takung Art is debt free and growing at an astronomical rate – making nothing but money at every step of the way. It is generating over ONE BILLION DOLLARS per MONTH in REVENUE.
So how does TKAT stack up against Sotheby’s and Tiffany in gross revenue? Well.. it beat the pants off of them. Sotheby’s (NYSE: BID) revenue is $961 million. Tiffany & Co. (NYSE: TIF) revenue is $4.16 billion. But Takung Art Co. Ltd (OTC: TKAT) revenue is over $12 BILLION. More than TEN TIMES’ THAT OF SOTHEBY’S AND 2.5 TIMES THAT OF TIFFANY.
TIFFANY & C0. (NYSE: TIF)
TIF reported lower revenue in both the first and second quarter of the year. Net earnings as reported in the second quarter were above the prior year and declined in the first half. Worldwide net sales declined 6% to $932 million and comparable store sales declined 8%.
Frederic Cumenal, chief executive officer of Tiffany & Co., said, “The global environment continues to reflect well known challenges that we believe have had broad effects on spending by local customers, as well as foreign tourists, especially from China.”
Readers should note Cumenal’s reflection of the lackluster results from China. We’ll note just how well Hong Kong-based Takung Art Co. Ltd results where later on in this article.
For the full 2016 fiscal year, Tiffany’s management is maintaining its outlook to expect: (i) worldwide net sales declining by a low single-digit percentage from the prior year and (ii) earnings per diluted share declining by a mid-single-digit percentage from 2015’s adjusted earnings of $3.83 per diluted share.
SOTHEBY’S (NYSE: BID)
On October 5, 2016 Sotheby’s announced the results of its Hong Kong art auction, which readers need to pay attention to the fact that while Tiffany’s didn’t fare so well in China, Sotheby’s art auction in Hong Kong proved Eastern art investors’ appetites are strong.
Kevin Ching, Sotheby’s Chief Executive Officer in Asia, said: “The market this week was selective, but demand for the most desirable pieces remained robust and delivered some outstanding prices.”
Sotheby’s Asian auction attracted a new generation of bidders – 40% were below 40.
Three months ago, Sotheby’s reported its second quarter results. On August 8, 2016 Sotheby’s reported for the three months ended 30 June 2016 net income of $89.0 million and diluted earnings per share of $1.52 which compares to $67.6 million and $0.96, respectively, a year ago.
Sotheby’s comparison to second quarter results of 2015 is impacted by a 16% decrease in Net Auction Sales reflecting a comparable decline in the global art market. The effect of lower sales levels is somewhat mitigated by improved auction commission margin, from 15.5% in the second quarter of 2015 to 16.4% in the current quarter.
“While we would certainly prefer to see a stronger art market, we are pleased with the progress we have been making on our strategic initiatives and the beneficial changes to our team and organization,” said Tad Smith, Sotheby’s President and Chief Executive Officer. “When the art market improves – and it certainly will – our company is poised to do very well for shareholders. Until then, we continue burnishing Sotheby’s for even more success and being very careful on capital allocation.”
Sotheby’s (NYSE: BID) is slated to release third quarter results on November 7, 2016.
TAKUNG ART CO. LTD (OTCQB: TKAT)
Takung Art Co. Ltd (TKAT) business model is different than its peers. TKAT allows thousands of buyers to purchase a small piece of ownership in art, charging them a fee for their buy or sell transaction. To date, Takung Art Co. Ltd number of customers has grown to more than 800,000.
This auction-type ownership has sent TKAT’s art portfolio soaring while generating the Company millions in profits.
Imagine being able to invest $20 to own a piece of a Ming vase, where Takung Art charges you a small fee for the transaction, sort of like the eBay of the art world.
Once an artwork is accepted for listing, it is divided into equal ownership units based on its appraised value. For example, a painting with an appraised value of $1,200,000 HKD may be divided into 1,200,000 units with each unit sold at HK$1.00.
As of September 30, 2016, TKAT had 157 art listings trading on the platform, up significantly from their aggregate initial listing value of US$38.61 million – with trading volume averaging over 108.5 million units per day in September 2016.
Takung Art’s approach takes into consideration the income of the average China household, though still far below the average art auction price of $50,000 per piece. By giving these investors a chance to buy Units of investment in fine art, TKAT has opened the middle market population of China to invest in fine art through its shared ownership model.
On October 6, 2016 Takung Art announced that it surpassed ONE BILLION DOLLARS in online art transactions for the month of September (MORE THAN TIFFANY’S ENTIRE ANNUAL REVENUE), recording $1.24 billion in transaction revenue as compared to $410.34 million in the year-ago period – A 203 PERCENT INCREASE.
Remember earlier in this article where Tiffany reports that art sales in China are weak, while Sotheby’s says there’s solid interest but growth is unlikely? TAKUNG ART IS BLOWING THE PANTS OFF THESE GLOBAL MAJORS!
The platform’s average daily trading volume in September 2016 increased to more than 108.5 million units, a 344 percent increase on the average of 24.4 million units traded daily in September 2015.
Takung also added 10 new listings in September, bringing the total number of artworks trading on its platform to 157.
“Obviously, we are thrilled by these record results,” said CEO Di Xiao. “As outlined in the company’s recent investor conference call (transcript), our nationwide marketing program continues to fuel momentum and supports Takung’s growing success in the shared art ownership sector. In September, the company reached another milestone as just under 10,000 new traders came onto the platform during the month, and we expect this level of participation to continue for the foreseeable future.”
On August 19, 2016, Takung Art Co. Ltd (TKAT) reported 2nd quarter revenue was $4,683,273, a 400 percent improvement on revenue of $936,101 in the same quarter of 2015. Net income for Q2 2016 was $1,116,843, or $.11 per share, 1347 percent higher than the net income of $77,176, or $.01 per share, reported for the second quarter of last year.
For the first six months of 2016 ended June 30, revenue was $8,472,043, a 283 percent improvement on revenue of $2,210,980 in the same period of 2015. Net income for the first half of 2016 was $2,212,895, or $.21 per share, 287 percent higher than the net income of $571,271, or $.06 per share, reported for the first half of 2015.
HERE’S THE SCOUP ON TKAT
There are only 10,632,276 shares of Takung Art Co. Ltd issued and outstanding – its public float is just over 1,300,000 shares! Tiffany & Co (TIF) has approximately 125,000,000 issued and outstanding – more than TEN TIMES as many shares as TKAT – but in perspective, TIF is trading at nearly TEN TIMES the price – though it’s not growing like Takung Art Co. Ltd. SO WHO HAS THE BETTER CHANCE OF A DOUBLE BAGGER? But wait, it gets better… Sotheby’s has 57 million shares issued and outstanding – nearly SIX TIMES more than TKAT. Sotheby’s (BID) shares are trading at FIVE TIMES more than TKAT.
Let’s take all that into perspective as if all three companies, TIF, BID and TKAT, had TEN TIMES MORE shares issued and outstanding. TKAT would be $0.68, BID would be $3.61 and TIF would be $7.32.
A hundred shares of TKAT would cost: $685, BID would cost: $3,610 and TIF would cost: $7,320. Which can you afford? Six hundred eighty-five bucks – or more than three THOUSAND six hundred or, seven THOUSAND three hundred twenty?
Does TIF or BID look like a double bagger to you? Or does TKAT? But WAIT, THERE’S MORE!
Remember, TKAT is in the process of listing to an exchange and when it goes effective NEARLY 1 MILLION INVESTORS IN CHINA CAN BUY THE STOCK. That, with a 1.3 million share float. Think a double bagger is there? Or maybe a TRIPLE BAGGER?