Sheng Siong

Sheng Siong: Maybank Kim Eng initiates with Buy Call and $0.52 TP. House believe Sheng Siong is the purest SG domestic consumer staple play offering defensive earnings and sustainable dividend yield of 6-7%. Sheng Siong, together with NTUC FairPrice and Dairy Farm controls 83% market share in domestic supermarkets. Importantly, believe this tripartite landscape ensures stable and controlled competition. Add that although Sheng Siong’s 90% commitment (for its IPO) ends in FY12, are confident management has the capacity and intentions to continue this policy beyond that. TP is based on 18.8x FY13E P/E, pegged at 25% discount to Dairy Farm.