Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD
Company Name: SHENG SIONG GROUP LTD
| Research House: OCBC | Price Call: HOLD | Target Price: 0.43 |
OCBC Investment Research has initiated coverage of Singapore supermarket chain Sheng Siong (SHEN.SI) with a hold rating and a target price of $0.43.
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.
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 10:01 a.m., Sheng Siong shares were down 2.3% at $0.43. But the stock has risen around 26% since listing in August.
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