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Is Kay Lee Roast Meat Joint Worth S$4 Million?

Some call them the best char siew and roast meat store in Singapore, or the meat that simply melts in your mouth. Kay Lee Roast Meat Joint, located at Upper Paya Lebar, was finally sold for $4 million, two and a half years after it was put on sale. An amount which is half a million dollars more than their initial asking price.

In this article, DollarsandSense will take a look at why Aztech Group was willing to pay such a hefty sum of money to purchase the business.


Every business model consists of tangible and non-tangible assets.

Tangible assets of Kay Lee Roast Meat

Tangible asset is defined as assets that have physical form, which, simplistically, means anything that you can see. Tangible assets of Kay Lee, are the shop space along with all the machines and equipment present in the shop.

In this case, the tangible assets of Kay Lee Roast Meat only amounts to $1.5 million.

So why is it that Aztech Group was willing to folk out an extra $2.5 million to purchase only $1.5million worth of business? The answer is logically that a business extends beyond just its tangible assets.

Intangible Assets of Kay Lee Roast Meat

Intangible assets are non-physical assets of a business. Examples of intangible assets are patents, trademarks, copyrights, goodwill, brand recognition and business methodologies (think recipe in this case).

Most business owners have little understanding of how much intangible assets such as customer base and recognition of their brand can have a huge impact on the value of their businesses.

With this, we take a look at the value of Kay Lee Roast Meat using the three traditional valuation approaches.

1) Cost approach

For the cost approach, we try to calculate how much it will cost us to recreate a brand which has the same impact as that of Kay Lee Roast Meat.

This is done by adding up the present value of all the past expenses Kay Lee Roast Meat spent, in order to obtain the brand recognition it has today.

Kay Lee Roast Meat has spent hundreds of thousands of dollars since 38 years ago to arrive at the reputation it has today.

The actual amount which Kay Lee spent on marketing is unknown. Assuming

  1. Kay Lee only spends $5000 on marketing starting 38 years ago on a yearly basis
  2. The inflation rate of the economy is at an average 3.12%

The present values of $5000 from 38 years ago is about $16,069.

The present value of $5000 from 37 years ago is about $15,583.

Continue this for 38 years and we will get a sum of about $369,382 on advertising.

However, cost approach does not allow us to factor cost such as time spent on the running of this business and creation of the recipe.

2) Market approach

Market approach identifies a brand comparable to that of another and using it as a proxy.

Hence, competitors who possessed the same qualities to that of Kay Lee like my favourite Foong Kee Coffee shop can look at this case as a rough gauge of the value of their business if Foong Kee Coffee shop were to be put on sale.

3) Income approach

The income approach measures the benefits that the intangible asset of Kay Lee Roast Meat can bring to the business.

Intangible assets such as loyal customers are usually the most important value-generating factor in a business. When customers frequent Kay Lee Roast Meal regularly, predictable revenue is generated.

Currently, the shop generates a revenue of around $2000 daily. Given that it is a freehold, the cost incurred comes mainly from the ingredients and the wage of the workers.

Given that they are open 6 days a week, in one year, the revenue generated will be $624,000 from the joint alone.

Aztech Group plans to open at least 10 casual restaurants under Kay Lee name in the next two years. The brand recognition that Kay Lee Roast Meat is a name which produces one of the best roast meat in Singapore. Coupled with the well guarded recipe, it makes similar tasting roast meat to that of Kay Lee difficult to imitate.

Opening the restaurants under a name, new to the public, will expose the group to higher risk.

The fact that the sales of Kay Lee made it to Straits Times, DollarsAndSense and many other websites and newspapers will probably keep the public wanting to have taste of Kay Lee Roast Meat or anticipating the arrival of the new restaurants. That, itself, is an intangible asset.


In conclusion, brand recognition and customer loyalty, may be worth more than tangible assets. They allow earnings steadily over time, and the understanding of this value while managing your business may allow you to bargain for higher premium to potential buyers one day.


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