Friday, December 20, 2013

Sheng Siong : Buy for yield (DBSV)

Sheng Siong Group
BUY S$0.58
STI : 3,053.77
Price Target: 12-Month S$0.80
Buy for yield

• Highest yielding stock among our Singapore consumer coverage universe at 4.9%
• Attractive dividend payout at 90% of earnings
• Yield of 4.9% lends supports to the share price
• Maintain BUY with S$0.80 TP

Met estimates despite earnings disappointment in the sector.
Unlike most of Singapore’s consumer stocks which failed to meet estimates, SSG’s 3Q13 results were on track. Growth was driven by contribution from new stores and better margins, despite weak SSSG of - 3.5% due to a decline in sales from matured stores in older housing estates, competitors’ promotions and renovation works at Bedok Central and The Verge stores. Gross and operating margins are now at record highs of 23.8% and 7% respectively, a result of lower input costs from centralised bulk purchasing and distribution, as well as better sales mix of fresh vs dried groceries.

Buy for yield. SSG is the highest yielding stock in our Singapore consumer coverage universe. It pays out 90% of earnings as dividends and its yield of 4.9% lends support to the share price. We believe the coming quarters will be flat, as store openings are likely to moderate.

Earnings to remain resilient. We expect earnings to remain resilient, sustained by strong margins and store sales. We see revenue growth supported by performance from new stores and newly refurbished ones. Store openings will likely be slow at < 5 p.a. going forward, as competition for retail space has become challenging.

Maintain BUY with S$0.80 TP. SSG’s share price is attractively priced at 18.2x FY14F PE. We maintain BUY, and S$0.80 TP based on 25x FY14F earnings.

Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 18/12/13

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock