Sheng Siong

Sheng Siong: 4Q13 net profit climbed 16.7% y/y to $9.3m, while revenue increased 5.9% to $170.4m. Of the increase, 4.6% was from new stores, while 1.3% was from comparable same store sales. Excluding Bedok Central and Verge stores, comparable same store sales grew by 2.0%. Admin expenses increased 5.7% on increased staff costs, offset marginally but lower other expenses, and an increase in finance income. Management guided that no suitable retail space to open new stores were found in FY13, and guides that if this persists in 2014, it will hamper plans to expand its presence, potentially capping growth. In addition, labour cost, increased food prices, and increased rental rates will add pressures in 2014. Management guided that competition would be less of a concern relative to cost pressures. Sheng Siong is currently trading at forward P/E of 18.8x Final DPS of 1.40¢, bringing full year dividend to 2.60¢ (FY 2012: 2.75¢), implying yield of 4.33% Latest broker ratings as follows: CIMB: Maintains Add with TP shaved to $0.67 from $0.77