Sheng Siong

Sheng Siong: Maybank KE lowers TP to $0.74 from $0.80, after mgt lowered their new store openings guidance. Sheng Siong has been unsuccessful in securing bids and failed in its negotiations to procure new retail space due to fierce competition from the bigger supermarkets. It now expects to open around 3 new outlets in 2H13, or a total gfa of 15k-20k sf, vs previous guidance of 10% increase in gfa. Nevertheless, the house believes valuations remain relatively attractive at 22.7x FY13e P/E, vs supermarket peer average of 31.9x, and Dairy Farm’s 5 yr P/E average of 28.7x. Maintains its Buy rating in view of Sheng Siong’s defensive earnings nature.