Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD
DMG & Partners Research in an Apr 27 research report says: "Sheng Siong reported a 74% growth in net earnings to $16.8 million, backed by revenue growth of 4% to $159.8 million. Earnings were boosted by a $10.5 million gain from the sale of its old warehouse at Marsiling Road.
"Stripping off the one-off gains, core net earnings declined by 35% to $6.3 million, accounting for 20% of our FY2012F and below our expectations.
"As we expect current competitive pressures to remain, we cut our gross profit margin assumptions from 22.3%/22.5% to 22% in FY2012/2013F respectively which lowers our core earnings by 4-8% for FY2012/2013F and in turn lowers our target price from 46 cents to 45 cents. At current price, the stock still offers a decent 5.5% yield based on a 90% committed payout. MAINTAIN NEUTRAL.
Company Name: SHENG SIONG GROUP LTD
| Research House: DMG | Price Call: HOLD | Target Price: 0.46 |
DMG & Partners Research in an Apr 27 research report says: "Sheng Siong reported a 74% growth in net earnings to $16.8 million, backed by revenue growth of 4% to $159.8 million. Earnings were boosted by a $10.5 million gain from the sale of its old warehouse at Marsiling Road.
"Stripping off the one-off gains, core net earnings declined by 35% to $6.3 million, accounting for 20% of our FY2012F and below our expectations.
"As we expect current competitive pressures to remain, we cut our gross profit margin assumptions from 22.3%/22.5% to 22% in FY2012/2013F respectively which lowers our core earnings by 4-8% for FY2012/2013F and in turn lowers our target price from 46 cents to 45 cents. At current price, the stock still offers a decent 5.5% yield based on a 90% committed payout. MAINTAIN NEUTRAL.
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