Sheng Siong

Sheng Siong

Postby winston » Sat Jul 02, 2011 7:35 am

Sheng Siong lodges preliminary prospectus with MAS By Nurul Syuhaida

SINGAPORE : Singapore retail firm Sheng Siong has lodged its preliminary prospectus with the Monetary Authority of Singapore (MAS) for a public listing on the Singapore Exchange.

Sheng Siong is principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores all across Singapore.

No pricing or range of units has been provided yet, although Sheng Siong said it intends to distribute up to 90 per cent of its net profit after tax to its shareholders for the financial years ended on 31 December 2011 and 31 December 2012.

Liu Jinshu, Investment Analyst of SIAS Research Pte Ltd said: "Local investors will be able to identify with the company given its retail presence, but should not attach too high a value to the company's brand. Investors must understand that the retail industry is relatively competitive and organic growth may be relatively slow".

Sheng Siong intends to use its gross proceeds from the issue of the new shares mainly as repayment of the term loan and development and expansion of grocery retailing business and operations in Singapore and overseas.

As at May 31, Sheng Siong's borrowings include a term loan of up to S$30 million issued by DBS Bank to CMM Marketing - which is part of the Sheng Siong Group - to part finance the construction of its Mandai Link Distribution Centre.

The proceeds will also be intended to be used for working capital purposes and expenses incurred in connection with the issue of new shares.

OCBC Bank is the issue manager, underwriter and the placement agent of the invitation shares offered in Singapore comprising of offer shares and placement shares.

According to the preliminary prospectus, unaudited proforma net earnings per share of the Sheng Siong Group for its financial year in 2011 based on the pre-invitation share capital of 1,140 million shares is 3.74 cents, and if assuming that the service agreements had been in place during the same period of time, is 3.99 cents.

Sheng Siong Supermarket is one of Singapore's largest retailers with over S$628.4 million in revenue during its financial year in 2010.

Based on revenue last year, the Group has a market share of 2.6 per cent in the Singapore retail industry and was ranked the third largest retailer in Singapore.

Singapore's supermarkets and hypermarkets are expected to experience approximately 4 to 5 per cent growth in revenues between 2011 and 2012, and between 1.5 and 2.5 per cent growth between 2014 and 2015.


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Re: Sheng Siong

Postby winston » Thu Aug 25, 2011 11:19 am

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Singapore Hot Stocks-Sheng Siong jumps on defensive play

SINGAPORE, Aug 25 (Reuters) - Shares of Singapore's supermarket operator Sheng Siong jumped as much as 10.6 percent on Thursday, extending gains on hopes the defensive nature of its business may shield investors in times of an economic downturn.

At 0305 GMT, shares of Sheng Siong were 8.2 percent higher at S$0.46 with over 88.1 million shares changing hands, making it the third most actively traded stock by value.

"It's considered a defensive counter. It's seen as the supermarket which offers one of the cheapest prices in Singapore, so in a recession they may gain market share from competitors as consumers are forced to trade down," said a local trader.

However, traders noted that Sheng Siong's valuations look rich and cautioned investors against buying the stock at current prices.

Shares of Sheng Siong have already surged about 35 percent since it made its Singapore debut last week.

Source: Reuters
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Re: Sheng Siong

Postby winston » Thu Sep 01, 2011 11:24 am

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Singapore Hot Stocks-Sheng Siong falls after run-up

SINGAPORE, Sept 1 (Reuters) - Shares of Singapore supermarket chain Sheng Siong fell as much as 16 percent on Thursday , following a run-up in the previous sessions on hopes that the company has a recession-proof business.

At 0317 GMT, Sheng Siong shares were down 8.9 percent at S$0.51 on a volume of around 160 million shares -- the top traded stock by volume so far.

"The stock has run up a lot so people may think it's a bit overdone. The general sentiment is also slightly better so people may be turning to the beaten down stocks," said a local trader.

Even after the fall, Sheng Siong shares were still around 55 percent higher than the IPO price of S$0.33 on Aug 17.


Source: Reuters
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Re: Sheng Siong

Postby winston » Thu Sep 15, 2011 12:31 pm

Singapore's favourite retailer

Initiating coverage

Sheng Siong Group (SSG) is the third-largest retailer in Singapore with 27 outlets mainly in the HDB heartland. The company is set to accelerate the pace of new store additions over the next 3-4 years.

We have a positive outlook on SSG, due to its recession-proof business, strong franchise, superior profitability, and strong growth prospects.

We estimate its net profit (core) to register 23% CAGR during 2011-13ii on the back of new store openings and higher margins from its new
S$65m warehouse/distribution centre.

We value the stock at 11x 2012ii EV/EBITDA and initiate coverage with BUY, and a target price of S$0.61.

Source: IIFL
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Re: Sheng Siong

Postby winston » Fri Sep 23, 2011 10:16 am

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RESEARCH ALERT-OCBC starts Sheng Siong at hold; target S$0.43

SINGAPORE, Sept 23 (Reuters) - OCBC Investment Research has initiated coverage of Singapore supermarket chain Sheng Siong with a hold rating and a target price of S$0.43.

STATEMENT: Given the dismal economic outlook, Sheng Siong represents a defensive play on Singapore's domestic consumption demand, OCBC said, adding that the company has strong fundamentals and a healthy balance sheet.

OCBC said Sheng Siong is one of the top three supermarket chains in Singapore in terms of revenue and the firm currently has 23 supermarket stores with three wet market stalls.

The bank added that it expects to see increased revenue contribution from the fresh produce segment in the next few years and Sheng Siong is also expanding its store network in Singapore to drive future growth.

However, OCBC warned that it expects a temporary revenue dip in Sheng Siong's 2011 fiscal year due to the closures of two key outlets, though two new outlets are forecast to contribute fully in 2012.

At 0201 GMT, Sheng Siong shares were down 2.3 percent at S$0.43. But the stock has risen around 26 percent since listing in August.

Source: Reuters
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Re: Sheng Siong

Postby winston » Thu Oct 13, 2011 10:04 am

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Valuation

Sheng Siong’s 13.5x consensus 2012 PE is higher than the peer average of 12.1x.

The stock offers an attractive implied dividend yield of 6.7% assuming 90% payout ratio.

Source: UOBKH
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Re: Sheng Siong

Postby winston » Fri Nov 11, 2011 8:35 am

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Revenue -8.5%

Revenue slipped 8.5% yoy to S$439.6 million for 9MFY2011, due to the closure of two outlets – Ten Mile Junction in November 2010 and Tanjong Katong in September 2011.

Operating profit excluding other income improved 4.2% yoy to S$26.6 million, from S$25.5 million for 9MFY2010.

Gross profit margin improved to 23.0%, from 21.2% for 9MFY2010, due to better sales mix, lower purchasing costs and more bulk purchasing rebates.

The Group maintained a strong balance sheet with net cash of S$121.4 million as at 30 September 2011.

http://info.sgx.com/webcoranncatth.nsf/ ... penelement
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Re: Sheng Siong

Postby winston » Mon Nov 21, 2011 10:31 am

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Growth story intact

Financial summary (S$)

Y/e 31 Dec FY09A FY10A FY11ii FY12ii FY13ii
Revenue (m) 625 628 610 699 783
EBITDA margin (%) 5.8 6.6 7.3 8.1 9.0

Net profit (m) 34 43 44 46 58
EPS (cents) 373.1 185.4 3.2 3.3 4.2
Growth (%) ‐81.9 ‐50.3 ‐98.3 4.0 24.9

IIFL vs consensus (%) 39.6 15.2 ‐0.7
PER (x) 0.1 0.2 12.8 12.3 9.8
ROE (%) 37.2 54.4 52.1 35.6 42.7

Net debt / equity (%) ‐34.3 ‐148.0 ‐110.6 ‐111.9 ‐114.3
EV / EBITDA (x) ‐0.9 ‐1.2 9.6 7.4 5.8
Price / book (x) 0.1 0.3 4.4 4.3 4.1

Dividend yield (%) 0.0 573.2 7.0 7.3 9.2
12‐mth TP (S$) 0.54 (32%)
Market cap (US$ m) 438.0

Sheng Siong Holdings Ptd Ltd 34.6
Lim Brothers 36.9
Domestic MFs 0.0
Others 28.5

52Wk High/Low (S$) .58/.31
Shares o/s (m) 1,383.5
Daily volume (US$ m) 16.6

Dividend yield FY11ii (%) 7.0
Free float (%) 65.4

In our meeting with Sheng Siong Group we focussed on their store expansion plans, renewal of leases, margin-enhancing initiatives, sale of the old headquarter, outlook for the grocery retail market in Singapore, and new business opportunities.

While core profits will decline in 2011ii due to closure of two stores, the company’s future growth story is intact, as core profits in 2012-13ii
will be driven by new store launches and expansion in gross margin.

We adjust our 2011ii earnings estimates to include S$11.3m gain on sale of the old headquarter and warehouse. There is no change to our
2012-13ii earnings estimates and target price.

Valuations are attractive at 7.4x 2012ii EV/EBITDA and dividend yield of
7.0%. Reiterate BUY.

Source: IIFL
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Re: Sheng Siong

Postby winston » Mon Nov 28, 2011 9:26 am

A major force in grocery shopping

• Plans to increase floor space by 10%/year for the next three years

• Increased own-brand mix to boost margins

• Expects more aggressive expansion post IPO; overseas expansion to be measured

Valuation

Based on the 2012 Bloomberg consensus forecasts, the stock is trading currently at a PER of 14x and a PBR of 3.7x


Source: Daiwa
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Re: Sheng Siong

Postby winston » Mon Nov 28, 2011 1:58 pm

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INTERVIEW-Sheng Siong eyes Malaysia, new stores to boost sales
By Charmian Kok

SINGAPORE, Nov 28 (Reuters) - Singapore supermarket retailer Sheng Siong Group Ltd is in talks with a potential partner, to help it expand into neighbouring Malaysia, a senior executive said.

Sheng Siong, which owns 25 stores in Singapore today, aims to own at least 50 outlets in Malaysia over the longer-term, as a fast-growing population and rising income will boost demand for basic necessities like groceries.

"Singapore and Malaysia's cultures are similar...Malaysia has a rising population, a lot of natural resources to boost its economy and thus grow consumer spending," said Lim Hock Chee, Sheng Siong's chief executive offer and co-founder told Reuters in an interview.

Sheng Siong is planning to open its first Malaysian supermarket in Johor, and is currently in discussions to form a joint venture with a listed company in the country, Lim said.

It does not plan to compete in the hypermarket space, which is already crowded with larger rivals like Carrefour.

Shares of Sheng Siong have risen 19 percent since it listed on August 17, outperforming the Straits Times Index's <.FTSTI> 5 percent decline in the same period.

REVENUE JUMP

The company, which targets low-to-middle income consumers, is also eyeing revenue growth of about 10 percent annually, implying it will take market share from rivals NTUC and Dairy Farm International , as it hopes to open about 4-6 stores a year in Singapore's suburbs.

"If we open four to six outlets a year, we hope to see revenue growth of about 10 percent annually," Lim said.

"Even in times of economic difficulty, we can still do well and expand. Some customers that used to buy more expensive products will also trade down, benefitting us."

Sheng Siong also stands to gain from the Singapore government's plan to build more public housing over the next few years for its growing population, giving the firm the chance to open more supermarket outlets to cater to the new housing estates, he added.

The supermarket retailer is the third largest in Singapore with a market share of 17.5 percent, behind NTUC and Dairy Farm, according to brokerage firm IIFL.

Last year, it booked revenues of S$628.4 million ($479.68 million), half a percent higher than the preceding year.

Sheng Siong also plans to introduce an e-commerce service by 2014, where customers are able to order groceries on the Internet and have them delivered to their homes, Lim said.

The service, which Sheng Siong will invest about S$1 million in initially, will allow the firm to achieve higher margins and target higher income customers-- a group it does not traditionally cater to.

Sheng Siong posted a 33.6 percent fall in its net profit for the nine months ended September to S$23.5 million, while its revenue slid 8.5 percent in the same period to S$439.6 million.

"While core profits will decline in 2011 due to closure of two stores, the company's future growth story is intact, as core profits in 2012-2013 will be driven by new store launches and expansion in gross margin," said IIFL in a report.

Sheng Siong is trading at a 12-month forward price-to-earnings ratio of 13.9 times, higher than the sector median of 11 times, according to StarMine estimates.

Source: Reuters
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