not vested
Sheng Siong Group: New stores remain as crucial drivers
Sheng Siong Group (SSG) reported a set of FY15 results that came in within our expectations.
FY15 revenue increased 5.3% to ~S$764.4m, meeting 99% of our FY15 estimate.
Net profit also grew 19.3% to S$56.8m, making up 103% of our full-year forecast.
Our estimate had also incorporated ‘other income’ of ~S$9m. FY16 will continue to be supported by new stores, with a new store in Yishun Junction 9 (minimum area of 10k sq ft) and one in Circuit Road (3.5k sq ft).
But this will be partially offset by closure of Loyang store (6k sq ft) in 2Q16 and Tampines store (9.8k sq ft) in 4Q16, as well as potential drag from old stores (4Q: -1.7% YoY).
We believe core business growth remains intact for FY16, maintain BUY, with unchanged DCF-derived FV of S$0.95.
A higher final DPS of 1.75 S-cents was declared, bringing total DPS to 3.5 S-cents vs. 3.0 S-cents last year.
Source: OCBC