Creative Peripherals (now Creative Newtech) – Micro cap with big ambitions

Q2 FY24 Concall Notes

1. OCF Is negative as Quarter end had many holidays, the cheque and payment got cleared on the very First week of this quarter
2. Will Explore the debt financing to Increase stake in Creative Subsidiary
3. 30 Crores Will be alone from Air Purifiers, They are more of a life style product rather than the Need product, Price point generally comfortable between 12-14k Buck
   Lifestyle product example can be many real estate company that intends right now to accompany Air conditioner with Property Might also Accompany Air purifier Considering the new Pollution Problems
   The Air purifier Sales is around 40% Online, 14%-15% Offline and Rest through Branded Show rooms such As reliance Retail
   There is shift in Behaviors’ of Big showrooms too, Earlier the norm was to Buy back the remaining Air-purifier left After December or Winter Per say. from last 2 Years No particular demand like that as such
4. Also type of razor blade business model i.e. Air purifier filter for corporates after every 6 months for retail after every year or so
5. generally For Honeywell they are trying many SKU and from this many SKU, 2 product has to turn out big and Air purifier seems to be the very first one
6. 2030 they intended to generate more than 2500-3000 Crores from Honeywell products only (Ofc many licencing brand will also be onboarded)
7. Current Position of Ckart is just for cross selling purpose but they also intend to Commercialize the same in medium term where the transaction fee will be charged
8. the above Can be in 2 Ways 1) Creative finances out of 10% bottom line or 2) On boards the investor who can finance the same take over the co. operation since the matrix of Creative is very different than that of market place
9. Generally Op. leverage not available right now as product development cost is Not capitalized. After the line of products are complete the same will not be incurred and likely the same will be completed by the time company Reaches 2,000 Crore of Revenue (Probably by next Year) and then the fireworks will Start
10. H1 Honeywell Sales can be around 70 Crores odd. They can easily achieve around 180 Crores of sales this year since the December Quarter can be generally Heavy for them
11. Current Stake stands at 70% in Hong Kong Subsidiary Plans to increase up-to 77%. There is No tax nor Interest payment in Hongkong so 15% EBITDA Margin is safe to assume for Hongkong Business