Monday, January 28, 2013
Sheng Siong: Same Store Sales Growth was 4% in 2012 (vs 2-3% for the industry), but largely due to a low base effect from 2011. Company is looking to expand to a total of 50 stores over the next 3 years entirely from internal funding, compared to the 8 new stores in 2012, and a current 33 stores nationwide. Malaysia expansion is not likely in the near-term, as the company is looking to move into e-commerce after hitting the 50-store expansion, given that high rents and cost of parking will be more significant. Stock is currently trading on 24x 2013 P/E, which seems steep given its lack of growth ahead. Payout ratio of 90%, equalling 4% dividend yield provides a floor to the share price.