Sheng Siong

Sheng Siong: On its recent purchase of 6x 99year leasehold units of shop space in Junction 9 totalling 18,611 sq ft at 18 Yishun Ave 9, Daiwa thinks that the acquisition will be positive for Sheng Siong, as it is a positive hedge against potential rising rental costs. Upon completion, Sheng Siong will be the only supermarket inside the Junction 9 mall, and management is optimistic that the store at Junction 9 is poised to benefit from high traffic because it is conveniently located (in line with gov’t’s initiative to transform Yishun into an integrated town centre; the new store is located within the 186-uni residential development Nine residences). Sheng Siong has 2 other stores within the Yishun vicinity. Daiwa thinks that funding for the acquisition isn’t an issue. The house added that this plus the recent $3.5m Toa Payoh acquisition is evidence of a strategy change from being asset-light, and iterated that Sheng Siong’s balance sheet should accommodate strategic space shopping. Daiwa remains Outperform for Sheng Siong with TP: $0.73