The economics of the sport of golf, a game of patience as well as strategy

 

MST Golf's is a one-of-a-kind listing and therefore would enjoy a scarcity premium.

 

 

THERE is a joke in the golfing community, ask a man to wake up before sunrise, there will be a million excuses.

Ask a man to tee off at dawn, he will be right on time. In the years I have played the game, I have witnessed the laziest people putting the utmost effort into improving their golf swing.

The amount of money spent on equipment, coaching, practice rounds in the driving range, club membership fees, travel and flight expenses to overseas golfing trips is mind-boggling.

This sport is by no means cheap and compared to other equipment sports like ping pong, it is incomparable.

However, once you start the game, you will be hooked for life. Every single round of golf is different.

The experience of playing with different people and courses makes it even more interesting.

So, what has all this got to do with business or the stock market?

Well, we have a highly anticipated

Main Market initial public offering (IPO) coming soon, which is the MST Golf Group Bhd listing.

For those who play the game, MST is a household name for golfers. It has been around for as long as I was born.

Over the years, MST has grown from a single retail store to controlling more than 51% of the local golf equipment retail and distribution market in Malaysia.

It is also the second largest golf retailer in Singapore. Although some older establishments such as RGT Golf, Desa Golf House, Transview Golf and others still exist in the market, none of them have seen the growth rate and expansion the way MST has done through the years.

A game of passion

Golf as a sport has been growing tremendously in the past century since its founding in Scotland in the 1860s. Today, there are over 80 million golfers and 30,000 golf courses globally.

The United States, Japan and South Korea are the top three countries which dominate global golf participation.

Based on the World Golf Report 2023 data, worldwide golf equipment and apparel market hit Us$20bil (Rm93bil) in 2022 of which Us$11.1bil (Rm51bil) was in equipment sales and Us$8.9bil (Rm41bil) in apparel sales.

There was also a major surge in worldwide sales in 2021 with an annual increase of more than Us$5bil (Rm23bil).

The sport is so popular that a seismic change in the golfing landscape occurred in 2022 when a new professional golf tour funded by the Public Investment Fund (sovereign wealth fund of Saudi Arabia) known as LIV Golf started and challenged the historic PGA Tour.

The prize fund up for grabs for a single season tournament reached a staggering Us$400mil (Rm1.8bil). Top-ranked golfers were offered hundreds of millions just to join LIV.

The PGA Tour reacted by banning professional golfers who played on the LIV golf circuit and multiple legal suits were filed between the two organisations.

Ultimately, a resolution appeared to be in sight following the news that a potential merger will go ahead between the two franchises. A Netflix documentary on golf, called Full Swing, depicts the sport’s evolution.

Golf as a sport has a huge market not only in terms of the annual growth rate of the number of players, but it remains the most lucrative sport in terms of the prize money and sponsorship deals.

We can see the continuous sponsorship of Rolex and other premium brands plastered all over golfing events.

Market leadership

MST’S IPO was oversubscribed by 5.28 times. This is a good performance considering it is a Main Market listing looking to raise Rm130mil for expansion.

At the IPO price of 81 sen, the market cap upon listing is expected to be Rm665mil. This is a rather huge IPO and not comparable to smaller ACE Market listings.

The question on some retail investors’ minds is that recent Main Market listings have been disappointing such as DXN Holdings Bhd, Radium Development Bhd and more recently Skyworld Development Bhd.

Some are concerned that the sentiment may impact this IPO as well. I am of lesser concern because the true value of the company lies not only in which market it lists but also its business itself.

Apart from the clear market leadership position of MST, many from the investment fraternity have used MR DIY as a peer comparison. I have also seen some other commentary using other retailers such as Innature, Senheng, Padini and others which are in the consumer retail space.

This led to the misconception that MST is listing at a very steep valuation. MST in fact is a specialty retailer and distributor of equipment for a global sport catering to the segment of consumers with the highest disposable income.

MST is very different from the other above-mentioned consumer retail companies which target the masses.

Furthermore, due to its track record and entrenched market share, we are unlikely to come across another golf equipment retailer and distributor company listing on Bursa Malaysia in the years to come. This is a one-of-a-kind listing and therefore, would enjoy a scarcity premium.

Ideally, I would like to see MST perform as well as MR DIY on listing day and the weeks to come.

However, the distinguishing factor that I believe would see MST sustain and do better for the longer horizon is because the MR DIY listing does not include the businesses in its other foreign markets which it expanded to such as Indonesia and the Philippines, etc.

For MST, the listing of the group includes all markets and MST is only starting to venture into Indonesia and Thailand; both are huge golfing markets by the sheer number of their population, popularity of golf tourism and burgeoning middle class.

A better peer comparison in terms of the valuation for MST would be Us-listed Topgolf Callaway Brand Corp.

It is one of the most popular golf equipment brands with a long history of being golfers’ favourite. Callaway has historically traded at an average forward price earnings (PE) valuation of 31 times. The immediate forward PE valuation is 23 times.

On the premise of the same valuation metrics, the likely intrinsic fair value for MST in 2024 is not too far off from TA Research’s recent report.

I often likened investing in the stock market to playing the game of golf. It is a game of patience, prudence and strategy.

A lot of practice and dedication is required to be good at the game.

Additionally, this is one sport where the biggest competitor is yourself and not your opponents. Consistency is the key, and one swallow does not make a summer. It is a long game.

Investing in the right company within a short span of time is meaningless if you cannot maintain the performance over a long duration of time.

Ultimately, the one who is regarded as a good investor, like a good golfer, is someone who consistently beats the market and surpasses their own performance over a long duration.

Golf is one sport that has a long-life span. It is a game that one can play until a ripe old age. Unlike badminton, football or basketball, the cardio element and companion requirements limit the longevity of the sport.

If your elderly parents are still insisting on playing badminton on a regular basis at the age of 70 and above, I would recommend you asking them to slow down.

Golf, on the other hand, would be one that requires little concern. If anything, the long outdoor session followed by the after-game chit chat session bodes well for the elderly who enjoy companionship.

Now, for those who have subscribed to the MST Golf IPO or are planning to invest on “Gong” day, I hope my article is able to shed some light on the economics of golf both for the uninitiated and for those who enjoy the game as much as I do.

But I must put forth a disclaimer; as an avid golfer myself, my views may be coloured by an inherent bias and lack the objectivity required for a fund manager.

Whether my love for the game would help with my investment or otherwise, we shall find out on July 20.

My best wishes to all fellow golfing aficionados, hopefully we can all reap the rewards of the long game. In the event this IPO goes out of bounds at tee off, we can always try asking Bursa for a Mulligan. 

Ng zhu hann

 

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https://youtu.be/9cGeDbIHX3E

HOW SCIENTIFIC IS THE SCIENTIFIC SEVEN MINUTE WORKOUT?

A couple of years ago the New York Times wrote about a game changing workout that would get you fit in only seven minutes. Yes, rather than endure 30-60 minutes of moderate intensity physical activity most if not all days of the week, seven minutes every now and then was suddenly enough to cure that heart disease of yours. The strange thing was that the New York Times, a relatively reliable source, had claimed that the workout was scientific.

This contradicted everything I learnt during my seven years at university. Therefore, today I ask in an outraged, yet concerned voice: is the scientific seven minute workout actually scientific?

Why it might be scientific:

Well the seven minute workout was first brought to the light in an article in a scientific, scholarly journal in 2013. For those of you who don’t know, this is basically a book full of studies and scientific articles that nerds who like exercise read – I am one of these nerds. The article did a review of the scientific studies to date on high intensity interval workouts. At the end it outlined an extremely high intensity, bodyweight exercise regime that could potentially lead to results equivalent to hours of endurance and resistance training combined, based on said studies. This is all good, well and even awesome, but there are a couple of barriers before we can call the seven minute workout truly scientific.


The first is that the studies referenced in this article utilised high intensity training of longer durations. Essentially meaning there is no evidence from this article that seven minutes is long enough for a workout.

The second is that the authors of the article advocate performing the article two to three times, suggesting even they’re not sure whether seven minutes is enough.

The third and perhaps the final, is that they did not directly test the effects of their seven minute workout and workouts that only used a bodyweight circuit. That was until now……


Is it actually scientific?

Yes, the year of 2015 brought the first, and as far as I’m aware, only study directly assessing the effects of the seven minute workout. Nervous? I am.

The study had 96 university students, for eight weeks, perform either: 1. Their normal exercise regime; 2. Seven minute circuit workouts; 3. Four weeks of seven and four weeks of 14 minute workouts.

Improved muscular endurance (number of push-ups) in both the seven and 14 minute group was observed compared to the normal exercise group. The same was true for strength, but only in male participants. Finally, aerobic fitness was also assessed, but only found to have been increased in women in the 14 minute circuit training group.


Is it healthful?

The scientific seven minute workout is slightly healthful. Well, it’s probably better than doing nothing. It will likely improve your muscular endurance and perhaps strength – depending on what sex you are; however, it may not be enough to enhance cardiorespiratory endurance. Further, there are many other variables that exercise alters, that have not been assessed.

Based on the the paper I brought up initially, high intensity workouts of longer duration appear very effective, but to date there is no proof seven minutes is enough.

I hope this has been healthful! 

Isithealthful

I hold a Doctor of Physiotherapy, Bachelor of Exercise Science and am a qualified personal trainer. I have extensive clinical and research experience and a strong passion for all things health. This has driven me to write the blog: Is it healthful, in order to analyse sound scientific research to determine if a product, service or intervention is healthful, or simply a waste of money or time.

Science on why living near trees might improve your health!

Short ‘n’ healthful:

Recently I purchased a property in what can only be described as a tree lined street. Yes, I was finally living the the great Australian dream. Unfortunately not all shared my view.

In fact since this purchase, many have ridiculed me for buying close to, if not at the top of the market. Well, ridiculers it now appears the ridicule is on you. Yes, ladies and gentlemen, a new study has found that living on a block with more trees is the cat’s pyjamas for your health.


The study:

The study I refer to was conducted in the fine city of Toronto. The researchers looked at the density of trees in certain areas of the city and then had a look at health outcomes. It was found that living in a tree lined street was associated with fewer cardiometabolic diseases and perceived better health. Perceived better health is important as it is linked with later death and fewer illnesses, while not having a cardiometabolic disease is great for many obvious reasons. I should note that the study controlled for education level, income and age, meaning it was likely the tree lined street associated with the improved health rather than the aforesaid factors.



How many trees does my street need?

Interestingly, the study found the exact number of trees required to improve health. Ten trees or more in a block was found to improve overall health as much as earning $10,000 more a year would, or being a whooping seven years younger. If we look at cardiometabolic conditions specifically, having eleven trees or more in a block had a similar effect to having an extra $20,000 in annual income or being 1.5 years younger.



Why might it be good to live near trees?

Well, firstly it could just be an anomaly. Studies – ridiculous ones – have found an association between high increase consumption and a high murder rate. I can’t remember the last time I went on a murderous rage after eating some Ben and Jerry’s. Therefore, to say the results are certain, you really need to plant some trees in someone’s street and then analyse the effects on health.

Alternatively, it may be the physical result of reduced carbon dioxide or more oxygen being delivered by the tree. Or it could even be that the being around some nice looking trees then indirectly translates to improved health.

Is it healthful?

Based on some fairly weak, albeit interesting research, living near trees appears slightly healthful. To my friends who ridiculed me, look who’s laughing now – I’m officially seven years younger.

I hope this has been healthful. Your thoughts? Are you about to lobby your local council for a few extra pines.

I hope this has been healthful!

Isithealthful

I hold a Doctor of Physiotherapy, Bachelor of Exercise Science and am a qualified personal trainer. I have extensive clinical and research experience and a strong passion for all things health. This has driven me to write the blog: Is it healthful, in order to analyse sound scientific research to determine if a product, service or intervention is healthful, or simply a waste of money or time.

Happy and healthy, not hunky

 

Blame it on the beefcake: In this scene from Captain America: The First Avenger, Steve Rogers (played by Chris Evans) is instantaneously turned from dweeby nothing to hero hunk with a fictional serum. Photo: Filepic

Personal fitness coach Jeremy Ng (right) and the writer before the intense workouts began. Photo: The Star/Muhamad Shahril Rosli

Workouts involve a lot of work

I blame it on Captain America.

Or rather, that one particular scene of Captain America: The First Avenger in which a skinny guy transforms into a hunk of a hero.

After being rejected by the military, Steve Rogers (played by Chris Evans) volunteers to be injected by a “super soldier” serum. Before you can say “Put on a shirt!”, he turns into a muscular superhero that sends women swooning and villains cowering. Since a serum of that kind is not available – and steroids is a definite no-no – the next best thing for me was to hit the gym.

With our boss issuing the Star2 Monthly Challenge, I figured I would embrace this as my fitness challenge. Within a month, I would transform my puny self into a beefcake.

To guide me on this quest, I even found the perfect person: personal fitness coach Jeremy Ng.

With over a decade in the finess industry, Ng is founder of PFC (Personal Fitness Coach) Studio. Located in Plaza Damas, Kuala Lumpur, PFC Studio is also Under Armour’s sponsored studio, specialising in fitness education, personal training and sport performance training.

From the moment we met, Ng and I hit it off. He is amicable but when the situation calls for it, he will push you for those extra push-ups. And he is a master at Power Plate (a brand of vibrating platform), which is my favourite exercise equipment.

According to Ng, the greatest satisfaction from his job is seeing his clients’ transformation. “I used to work with a woman who had Parkinson’s. In the beginning, she couldn’t walk on the treadmill but after six months of training, she was able to run for 15 minutes continuously,” he said.

“Personal trainers offer more than just bodily transformation,” enthused Ng. “They also offer health and lifestyle improvements – things that are important to society today.” With such a gung-ho mentality blended with a zen personality, what’s not to like about this guy?

The challenge

After taking my body measurements, Ng noticed that I had muscle imbalance, more specifically my right hip and left shoulder were (gasp!) not proportionate. Throughout the one month – we trained two to three times a week – he worked on fixing that issue and getting my body toned overall.

The first couple of sessions were tough, I will not lie. I was panting and cursing under my breath throughout the workout, and the following morning, my body ached in places I didn’t know existed. (Not being a spring chicken anymore didn’t help.)

Fast forward to 30 days later, and I still didn’t have Chris Evans’ body. By then, I realised one month was too unrealistic to achieve that goal. To see drastic results, one has to workout more frequently (up to five times a week), and watch his diet (which I’m hopeless at).

But I’m glad to report that my posture has improved, and exercising made me less lethargic. Best of all, my programme with Ng made me look forward to workouts – something I used to dislike.

So, instead of a one month challenge, I have converted it into (hopefully) a lifelong one, and I have signed up to be one of Ng’s clients.

As I celebrate my 41st birthday (in a fortnight!), I have come to the realisation that I have to take better care of myself. At this point in my life, I’d settle on being healthy – and happy – over hunky anytime.

By William KC Kee  - William aims to focus more on fitness, and less on fried chicken and Ramly burgers. Send feedback (and encouragement) to star2@thestar.com.my

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Science on high intensity interval training: HIIT, or SHIIT?

Let me pose you a question: would you rather go down to the video store (if it hasn’t yet gone bankrupt) to hire a DVD, or stream it from the comfort of your own home? You’ve probably answered: the comfort of your own home, unless of course you get all nostalgic about walking down the street to hire discs. I know I do!

Okay, okay, now let me pose you a further question: would you rather spend one hour exercising, or 30 minutes? Stop, don’t answer that just yet. What if I were to say that both workouts would give you equivalent results? Unless you’re a time wasting enthusiast, pain junky, or DOMS devotee you’re probably going to answer 30 minutes. Well a new (old) exercise regiment known as high intensity interval training (HIIT) is offering just that.

Yes, if you believe one of the internet’s many great fitness prophets, then you will be aware that HIIT is the shit! Slow endurance training is the DVD for hire and HIIT is Netflix, which is of course, the shit. So is HIIT truly the shit, or should you beware of false fitness prophets?

What is HIIT?

Before I answer your previous question. What is HIIT? Simply put, HIIT involves performing intervals of highly intense exercise followed by either complete rest, or low intensity exercise. The high intensity-low intensity combination seems to be the more popular of the two currently.

How about an example? Sure, here’s one. Let’s say running is your game. Your HIIT may involve a ratio of a one minute sprint, to 45 seconds of slow jogging, repeated for a total of 15 minutes. It certainly doesn’t have to follow this exact ratio, or duration and these variables change greatly from protocol to protocol, that was simply an example. I should note, however, that scientific data to date has found minimal difference between different interval ratios thus far (9).




Why HIIT might be the shit?

HIIT is proposed to lead to multiple complex physiological changes to the skeletal muscle system that promote fat burning efficiency and preference, and more efficient oxygen utilisation. In turn, this is proposed to: make you skinnier, fitter and it will likely give you the ability to fly! But probably not the last one.

Science and HIIT (SHIIT):

Of course theory means little unless it translates to real world, real life changes. So, does it? Spoiler, it generally does.

Aerobic health:

A review paper analysing studies on individuals suffering from various different lifestyle diseases found HIIT to be effective. Specifically, cardiovascular fitness, as measured by Vo2 max, was 9% higher when individuals performed HIIT as opposed to moderate intensity continuous exercise (1). Another large scale review paper on scientific studies to date found HIIT to improve: aerobic fitness level more so than normal, moderate intensity exercise in both sedentary and active individuals. But it was only as effective as continuous exercise training in athletic persons (2). If that wasn’t enough science for you, a third study found HIIT to improve aerobic fitness as well as moderate intensity continuous exercise in a relatively fit group of people (3). This basically tells us that the lower your fitness level is, the better you will respond to HIIT and if you only want to do one sort of training, HIIT will be more effective than continuous training for aerobic fitness. Conversely, if you’re really fit and only want to do one form of exercise, then HIIT is as good as continuous moderate intensity exercise for aerobic fitness.

Muscles, muscles, muscles:

What about those muscles? Can you skip the separate weight sessions and do an all in one HIIT session? Well, the scientific data is very limited on this. But the one study that does exist on this topic, found that when having an active rest period was compared to having complete rest, complete rest won. Yes, complete rest led to greater work output, which in turn would likely mean improved: muscle mass, strength, power, looking shredded bro (4)! This makes sense and says that resistance training HIIT will likely provide you with some nice adaptations, but not as good as traditional weight training where proper rest between sets is taken.

Weight loss:

What about weight loss then? The data ain’t crystal clear on this. One study found HIIT boxing was better than continuous brisk walking at improving body fat percentage (5). Another study found participants had a decreased waist circumference following HIIT, but not following moderate intensity continuous exercise (6). Yet, in complete contrast, continuous moderate intensity exercise was found to decrease trunk fat more so than HIIT in another study (7). All in all, the science isn’t certain on whether HIIT or continuous training is best for weight loss. But if you base your workout on the number of calories you’re burning, based on average heart rate or a similar method, then you should be no worse off than performing continuous exercise, as average heart rate tends to be higher for HIIT and stays elevated for longer following exercise.

Adherence:

If HIIT is quicker to do, then you’d think people would do it more and stick to it. And they do! High intensity interval training led to a greater level of adherence (89% vs 71%) than moderate intensity continuous training (8). Grouse!

Is it healthful? 

Ladies and gentlemen, HIIT is the shit! Or at least it is pretty darn good and very relevant to our time-centric society:

• HIIT is likely as good as endurance exercise for aerobic fitness and if you’re of a low fitness level it’s probably better.
  
  
•  Resistance training HIIT won’t get you as ripped as traditional resistance training with structured rest periods. But it’s probably not a great deal worse.
  
  
• HIIT will lead to at least equivalent weight loss to continuous moderate intensity exercise in a shorter period of time, likely due to an elevated average heart rate.
  
  
• HIIT generally leads to higher adherence, so you’re more likely to stick with it.

Our verdict :Highly healthfull. If you’re time poor and unfit, HIIT’s the most effective way to turn things around. Although if time is less of a factor and you really want to optimise your health you should combine HIIT, anaerobic exercise and aerobic exercise as part of a proper periodised program. Especially, if you have sport related goals.

I hope this has been healthful!

Isithealthful

I hold a Doctor of Physiotherapy, Bachelor of Exercise Science and am a qualified personal trainer. I have extensive clinical and research experience and a strong passion for all things health. This has driven me to write the blog: Is it healthful, in order to analyse sound scientific research to determine if a product, service or intervention is healthful, or simply a waste of money or time.