A Stock to Watch

Shoppers could buy everything from junk food to staples at this chain store

For many Hongkongers 759 Store is a shop they like to browse in, especially for snacks from Japan, though it has grown to include ones from Europe and the United States. It also carries noodles, rice, sauces, and even frozen seafood.

I've written about 759 Store before, and the shop got its name from the parent company's stock number on the stock exchange.

However, it was shocking to find out yesterday that the founder and owner, Coils Lam Wai-chun, died unexpectedly on Saturday at the age of 60. It was disclosed he had diabetes for a long time.

Coils Lam died on Saturday at the age of 60

Instead of the parent company's stock falling, it more than doubled in value today. On Friday it closed at HK46.5 cents and then today went as high as HK$1.04 before closing at HK89 cents. That's because investors think positive change is on the way.

"The passing away of the founding chairman is sad news. However, it also give hope to investors that it may have the way for a major restructuring, or even merger and acquisition opportunities. This has led buyers to rush to bet on the stock on Monday," explained Jeffrey Chan Lap-tak, founding partner of Oriental Patron Financial Group.

"The 759 Store in fact is very popular and has a leading market position among snack retailers. Its [financial] results were not good in recent years, mainly due to an over expansion of the number of stores a few years ago. But the reduction of stores in the past two years has already helped the company get back on track. It may well be a target of acquisition," he said.

Like many small and medium-sized enterprises, they were dependent on their founders, like Lam in the case of 759 Store. Lam and his wife Law Ching-yee own 70.89 percent of CEC International, the parent company.

The future of 759 Store looks positive in terms of stock value

"Now the founder has died. We will need to wait and see if the new management can lead the business forwards," Chan said.

On Sunday the board held an urgent meeting and decided executive director Tang Fung-kwan, 48, will become the new chairwoman of the company. She joined the group in 1993 and was appointed executive director in 1999. She is responsible for the overall management of the procurement part of the business.

Lam founded 759 Store in 2010, competing with supermarkets by offering Japanese and Korean snacks, like cookies and chips before expanding to rice, coffee, and even wine.

It'll be interesting to see how the company fares post-Lam -- will it succeed or fall apart? The company will need to make some wise decisions, but so far cutting down the number of stores from 270 to 220 is a good start. Maybe the chain will be bought out, or maybe with the injected investment they can do other things.

Definitely a stock to watch!