Friday, March 16, 2012

Sheng Siong Group - New warehouse well worth it

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD
Research House: CIMBPrice Call: BUYTarget Price: 0.51




Target S$0.51

Cost savings from its new warehouse should cancel out higher overheads. Sheng Siong is relatively shielded from rising rentals as its retail space is leased from 'compassionate' landlords rather than yield-maximising private landlords. Maintain Outperform and target price based on 18x CY13 P/E, with slight adjustments to FY12-13 EPS on housekeeping matters. We see catalysts from faster store rollout, expansion into Malaysia and strong same-store sales growth.

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