Sheng Siong Investment Research

6022 words 25 pages
February 23, 2012

SINGAPORE EQUITY Investment Research
DMG & Partners Research CONSUMER
Melissa Yeap +65 6232 3897 Terence Wong, CFA +65 6232 3896 terence.wong@
Retail Sheng Siong is Singapore’s second largest grocer, holding an 18% share of the local market. It owns 24 outlets and three wet market stalls across the island nation, located in the HDB heartlands. Stock Profile/Statistics Bloomberg Ticker STI Issued Share Capital (m) Market Capitalisation (US$m) 52 week H | L Price (S$) Average Volume (‘000) YTD Returns (%) Net gearing (%) Altman Z-Score ROCE/WACC Beta (x) Book Value/share (S¢) Major Shareholders (%) SS Holdings Hock Eng Lim Hock Leng Lim 34.6 12.3 12.3 SSG SP 2,996 1,384 685
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Mr Tan Ling San joined as Executive Director Opened four new stores resulting in store count of 21. Launched TV game show "The Sheng Siong Show" hosted by Singapore celebrities which attracted strong viewership. Season 9 was aired on Mediacorp Channel 8 between April and July 2011 Opened 22nd outlet at Yishun occupying floor space of 8,977sf. Launched first housebrand, Royal Golden Grain for rice. Launched two Sheng Siong Diners Club credit cards which enable customers to rebates on grocerries Opened 23rd store in Punggol Central occupying floor area of 6,878sf Announced plans to build new Mandai Link Distribution Centre with floor space of 543,090sf 2010 2011 Closed 25,000sf ft Ten Mile Junction outlet in November Opened 2,400sf Elias Mall Market Stalls Opened 3,071sf Teck Whye outlet Closed Tanjong Katong outlet Moved into new Mandai Link premises in May 2011

2008 2009

Source: Company data

OSK Research See important disclosures at the end of this publication DMG Research OSK See important disclosures at the end of this publication DMG Research 3

RETAIL NETWORK 27 outlets located in the HDB heartlands. Targeting the low-to-mid income masses, the Group’s 24 supermarket outlets and three wet market stalls are located in the HDB heartlands. Going forward, management does not plan to deviate from this business strategy, as it ensures low rent leases. Figure 2: Summary of Store Network