Excerpts from CGS-CIMB report

Analyst: Cezzane SEE

Sheng Siong Group
Banking on the “homebody” trend

■ 1H20 net profit of S$74.8m was above, at 75.8%/77% of our/street FY20F EPS, led namely by exceptional same store sales growth.

■ We expect 2H to see strong yoy growth as long as Covid-19 prevails and Singapore embraces the “homebody” trend. Raise FY20-22F EPS.

■ We think defensive plays will trade at a premium. Reiterate Add, with a higher TP of S$1.95, now on 26.5x CY21F P/E (3 s.d. above average mean).

SS montage 1

Undertaking something large soon?

In 2Q20, the company drew down S$30m worth of loans from a S$50m three-year term loan, which was extended from a government agency in support of a national programme, despite being in a net cash position.

We believe SSG could potentially undertake a large project soon.

We maintain our capex forecasts until further guidance.

Defensive pick.
Reiterate Add, with a higher TP of S$1.95

Sheng Siong

Share price: 


We raise our TP to S$1.95 (from S$1.65), based on a higher CY21F P/E of 26.5x.

While this represents close to 3 s.d. above SSG’s long-term mean (26.2x) we believe defensive plays like SSG (which is in a net cash position and is still growing its market share) will continue to be favoured, in view of the near-term macro uncertainties.

Potential re-rating catalysts include new store openings, better SSSG and higher dividends.

The reverse pose as downside risks. 

Share Prices

Counter NameLastChange
AEM Holdings3.4300.020
Avi-Tech Electronics0.265-
Best World2.3700.110
Broadway Ind0.108-
China Sunsine0.4750.010
Food Empire0.740-
Fortress Minerals0.395-0.005
Geo Energy Res0.3250.005
Golden Energy0.8200.005
GSS Energy0.047-
ISDN Holdings0.585-
IX Biopharma0.120-0.003
Jiutian Chemical0.080-
KSH Holdings0.340-
Leader Env0.075-0.001
Medtecs Intl0.142-0.004
Meta Health0.021-0.001
Nordic Group0.465-
Oxley Holdings0.140-0.004
REX International0.215-
Sinostar PEC0.180-
Southern Alliance Mining0.600-0.005
Straco Corp.0.460-0.005
Sunpower Group0.3800.005
The Trendlines0.098-0.001
Totm Technologies0.103-0.001
UG Healthcare0.175-0.001
Uni-Asia Group0.9450.025
Wilmar Intl3.960-0.040
Yangzijiang Shipbldg1.240-0.050

NextInsight RSS

rss_2 NextInsight - Latest News

Online Now

We have 1698 guests and no members online