SG: MARKET PULSE: Consumer Sector (27 Nov 2013)

Stock Name: Sheng Siong
Company Name: SHENG SIONG GROUP LTD

Research House: OCBC

Price Call: BUY

Target Price: 0.78

Stock Name: Petra
Company Name: PETRA FOODS LIMITED

Research House: OCBC

Price Call: BUY

Target Price: 3.95

MARKET PULSE: Consumer Sector

27 Nov 2013

KEY IDEA Consumer sector: Challenging 2014 ahead Summary: We expect the first half of 2014 to be an uneventful one for the consumer sector, and we maintain our UNDERWEIGHT rating. We feel that revenue growth is likely to be challenging given the recent spate of bearish data points both domestically and abroad, which indicate that consumer spending is likely to be subdued in 2014, and that companies will also continue to face margin pressures from rising operating expenses (i.e. higher staff and rental expenses). In addition, ongoing concerns over the overall macro environment and the focus on rising inflation will also keep a lid on consumer spending. Within our sector coverage our top picks are Sheng Siong Group [BUY; FV: S$0.78] as we like its defensive qualities in the face of weaker domestic sales, and Petra Foods [BUY; FYS$3.95] for its dominant leadership position in chocolate confectionary products. (Lim Siyi)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

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