The Hour Glass - KGI Research 2026-07-16: Worth The Waitlist

• We initiate coverage on The Hour Glass (SGX:AGS) with an OUTPERFORM rating and a 12-month target price of S$3.94, based on a DCF valuation using an 8.8% WACC and 2.0% terminal growth rate. The current valuation does not fully reflect the durability of the group’s premium-brand allocation advantages, bank-debt-free balance sheet and recurring cash generation.

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Company Background

• Founded in 1979, The Hour Glass is a leading specialist watch retailer, operating over 70 multi-brand and monobrand boutiques across 15 cities in South East Asia, North East Asia and Oceania. Its portfolio includes leading watchmakers such as Rolex, Patek Philippe, Audemars Piguet and F.P. Journe, alongside a broader range of brands including Tudor, Omega and Hublot.

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• The Hour Glass’s competitive advantage rests on its long-standing relationships with selective watchmakers and its access to sought-after inventory. Management has streamlined mature-market networks into fewer, larger boutiques and increased the use of monobrand formats for strategic partners. We believe these initiatives should deepen brand relationships and strengthen the retail experience, although they also increase dependence on a concentrated group of brand principals.

• The group’s most significant recent transaction was the A$90mil acquisition of four Rolex boutiques in Australia, expanding its Oceania network from three boutiques in 2019 to 15 boutiques across six cities by end-FY26. The acquisition provides an additional two months of consolidated contribution in FY27 but may dilute group gross margin because of the higher proportion of monobrand revenue.

Principal earnings streams

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Alyssa Tee KGI Securities Research | https://www.kgieworld.sg/ 2026-07-16

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