Sheng Siong

Sheng Siong: Completed the $65m acquisition of a property at Block 506 Tampines Central 1 and a new supermarket (~9.8k sq ft) is expected to open on the second floor by the end of Jan 2015. OCBC reckons some upside could be seen, as the store would likely enjoy higher sales during the Chinese New Year festive season. The Tampines store may also be expanded following the expiry of existing tenancies in 2016 and 2017. Sheng Siong has since utilized 85% of the ~$80.4m raised from last year's placement while it still holds significant cash balance for further growth. On a separate note, Sheng Siong recently announced a proposed conditional JV with the Kunming Luchen Group. OCBC views this as a step towards establishing a stronger and supportive relationship, but the group's regional expansion plans are still at the early stages. House maintains BUY with TP of $0.77.