Sheng Siong

[winston]

not vested

Sheng Siong – Resilient demand but limited growth. Fair value S$0.45.

We expect muted growth ahead for Sheng Siong, but demand is resilient given the defensive nature of staple food products. Its key growth area, which is via expansion of store network, is constrained by availability of suitable locations.

Other key objectives include increase contribution from fresh produce segment, which accounts for about 30% of revenue and commands higher GP margins. The new warehouse at Mandai will also help the group to improve operational efficiency.

Management has indicated that dividend payout ratio will be up to 90% of net profit for FY11 and FY12. Assuming a 90% payout ratio, dividend yield is attractive, at 5% to 6% yield. Fair value of S$0.45 implies limited upside to current price.

Source: DBS

[winston]

not vested

Sheng Siong Q4 profit falls 48.2%, plans 1.77cts/shr dividend By CARINE LEE

Sheng Siong Group Ltd on Friday reported a 48.2 per cent decrease in year on year profit to $3.75 million for the fiscal fourth quarter ended Dec 31, 2011.

Turnover slipped 6.1 per cent in the quarter to $138.86 million from $147.95 million a year ago.

Closure of two outlets lowered revenue for the fiscal full year ended Dec 31, 2011 by 8 per cent year on year to $578.44 million.

Profit for the full year decreased 36.1 per cent to $27.26 million from $42.64 million a year ago, due to absence of one-off investment gains.

Consequently, earnings per share for the full financial year ended Dec 31, was 2.21 cents, down from 3.74 cents a year ago.

The group has proposed a 1.77 cents per share dividend, which amounts to a payout ratio of 90 per cent.

Source: Business Times

http://www.businesstimes.com.sg/sub/lat ... 42,00.html?

[winston]

Sheng Siong Group

One-off charges galore
SSG SP / Shen.SI | OUTPERFORM - Maintained
Share Price S$0.48 - Tgt. S$0.51

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An unexpected tax charge, IPO expenses, a drop in miscellaneous income and margin pressure from more competition over the festive period decimated net profit.

While we are disappointed, we believe this quarter is a one-off and that favourable structural trends are in place.

4Q11 came in below expectations, forming 11% our full-year estimate and 13% of consensus. FY11 forms 82%.

We introduce FY14 numbers and reduce our FY12-13 estimates by 3% on lower gross margins.

Maintain Outperform with same target price based on 18x CY13 P/E.


Source: CIMB

[winston]

not vested. BTW, I have never experienced a "compassionate" landlord before ...

Sheng Siong is relatively shielded from rising rentals as its retail space is leased from 'compassionate' landlords rather than yield-maximising REITs.

Maintain Outperform and target price of S$0.51.

We see catalysts from faster store rollout, expansion into Malaysia and strong same-store sales growth.

Source: CIMB

[kennynah]

hahaha... tcss...go such thing as "compassionate" landlords...waahahaaaa

Sheng Siong is relatively shielded from rising rentals as its retail space is leased from 'compassionate' landlords rather than yield-maximising REITs.

[winston]

not vested

Sheng Siong Group: Defensive play in uncertain times

Ahead of Sheng Siong Group’s (SSG) 1Q12 results, we are anticipating a YoY increase in its 1Q12 revenue following additional contributions from more stores and higher sales volumes following the Chinese New Year festivities.

In terms of its margins, we expect increased sales turnover over the CNY period and higher rebates from suppliers to overcome sustained price competition amongst the big three local supermarket chains.

With SSG’s share price relatively unchanged since the release of its FY11 results, it is our view that the above expectations have been priced in, and the counter should continue to remain stable going forward.

As such, with recent market weakness and uncertainty, we reiterate our belief that SSG offers investors downside protection with the addition of an attractive dividend yield (FY12F: 5.8%).

Maintain our HOLD rating at an unchanged fair value estimate of S$0.49.

Source: OCBC

[winston]

not vested

More than meets the eye
OUTPERFORM - Maintained
Share Price S$0.38 - Tgt. S$0.49

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We think Sheng Siong is behind the recent supermarket price war, in a bid to drive volume and gain market share. If so, it may gain the upper hand as its competitors should be suffering more.

In any case, its brand ‘promise’ is intact – its things are still cheaper.

We believe margin pressure from the price war is likely to ease up in 2Q.

We maintain our Outperform, target price (18x CY13 P/E, 20% disc. to Dairy Farm) and estimates.

Stock catalysts could come from higher-than-expected SSSG and new store openings, including in Malaysia.


Source: CIMB

[winston]

not vested

Sheng Siong Group: When Three is Not a Crowd. Initiate Buy with TP $0.52.

For investors putting on their tin foil hats, we believe Sheng Siong is the purest SG domestic consumer staple play offering defensive earnings and sustainable dividend yield of 6-7%.

Sheng Siong, together with NTUC FairPrice and Dairy Farm controls 83% market share in domestic supermarkets. Importantly, we believe this tripartite landscape ensures stable and controlled competition.

We differ from consensus in our view on dividend payout. Although Sheng Siong’s 90% commitment (for its IPO) ends in FY12, we are confident management has the capacity and intentions to continue this policy beyond that.

Our TP is based on 18.8x FY13F earnings, pegged at 25% discount to Dairy Farm International.


Source: Kim Eng

[winston]

not vested

OCBC Research keeps target price on Sheng Siong, upgrades rating to buy By Carine Lee

OCBC Research on Thursday upgraded Sheng Siong Group to a buy rating on valuations grounds, with the same fair value estimate of 49 cents per share.

The research house said that the sell-offs from loss-covering have resulted in an attractive entry point for the stock, in which OCBC analysts see unhindered growth prospects and a high possibility of interim dividend.

"With the global economic situation remaining volatile and murky, we expect a shift from eating out to in by consumers and supermarkets will be the natural beneficiaries," said analyst Lim Siyi.

Additionally, the analyst expects gross profit margins to inch higher than 21 per cent as competition has started to ease up, evidenced by a drop-off in the number of items in weekly promotions.


Source: Business Times

[winston]

not vested

Sheng Siong Group: Forging Ahead; Buy TP SGD0.52
Mkt Cap USD449m
ADTV USD1.2m

Sheng Siong is scheduled to open its third outlet in Geylang in July. The group is on track to meet its target of 40 outlets over time. We have raised our FY13-14F earnings estimates by 3%, to take into account the new 11,000-sq-ft outlet.

With the end of first quarter, and price wars petering out, we believe that its gross margin has bottomed and should recover.

Robust free cash flow and a net cash position of SGD149m make Sheng Siong a strong defensive play, with pure Singapore retail exposure.

Maintain BUY and target price of SGD0.52.


Source: Kim Eng