Sheng Siong

Sheng Siong: Daiwa initiates Coverage with Buy Call and $0.80 TP. House note that the retreat of inefficient grocery retailers should provide growth opportunities in the supermarket space. Expect grp to post a healthy EPS CAGR of 19% over 2013-15 on market-share gains and rising profit margins. Forecast a sales CAGR of 11% over 2013-15, driven by floor-space expansion and improvements in same-store sales. Expect demand for Sheng Siong’s low-priced supermarket products to remain strong, supported by overall population growth, competitive price and convenience. Expect a further acceleration in sales of the company’s high-margin fresh produce and own-brand goods. Believe SSG’s ability to optimise the supply-chain capabilities of its logistics infrastructure, offer an improved product mix, and strengthen its ecommerce supply-chain logistics will help drive higher sales growth and gross-margin expansion.