Sheng Siong

Sheng Siong: DMG upgrades to Buy and increases TP to $0.51 from $0.45 after hosting Sheng Siong at its ASEAN Corporate Day. House is convinced that mgmt will maintain div payout at 90% and reward investors, translating into a yield of 6%. Its new 11k sf Geylang oulet will open within 1H July 2012 and it will be grp’s first 24-hour outlet. An additional 5k sf outlet at Bukit Batok will open at end-July. Its 2nd largest Woodlands outlet which contributed 9.5% will close in 2016 for a govt redev initiative but shld be offset by new stores. Valuation multiple has been raised from 15x to 17x to derive new TP of $0.51.