Sheng Siong

Sheng Siong: During Sheng Siong Group's 1Q14 results briefing, management shared updates on growth strategies and business operations. Measures to grow bottom line are: 1) Renovation of three stores in FY14; 2) Actively increasing the proportion of goods sold from direct sourcing (currently 55%), which will translate into improved GP margins that are sustainable. Management is reportedly in talks for new stores, but would not hesitate to walk away if the price is deemed too high. Finally, the pilot phase in e-commerce has expanded to other areas with a larger base of customers. OCBC think that if this is executed well it will make up for the challenges in opening new stores. OCBC maintains Buy rating with $0.68 TP. Meanwhile, JP Morgan initiated on the counter with Overweight and TP of $0.76.