Sheng Siong Group - OCBC Investment 2016-09-27: Store in The Verge mall may close

Sheng Siong Group - OCBC Investment 2016-09-27: Store in The Verge mall may close SHENG SIONG GROUP LTD OV8.SI

Sheng Siong Group - Store in The Verge mall may close

  • Recall that Sheng Siong Group (SSG) had previously highlighted back in Feb that they had stores in The Verge (45k sq ft) and Jurong Superbowl (16.4k sq ft) following media reports that the mall owners had intention to sell the properties. 
  • It was recently reported that a joint venture between Lum Chang Holdings and a fund of LaSalle Investment Management Asia had signed an agreement to buy The Verge. 
  • The timeline for redevelopment of the mall is unclear, while the lease for SSG’s store is currently slated to expire by 31 Mar 2017. 
  • With this looming, we keep in mind that this store’s same store sales growth has been relatively weak in the past few years mainly due to the construction works in the vicinity. 
  • We believe that revenue contribution has not been significant, but opt to wait for further clarity on this development before adjusting our estimates. 
  • We have a BUY and fair value estimate of S$1.07 on SSG, with growth expected to be driven by new stores. 
  • In consideration of current price levels, we advocate investors to re-enter at lower prices.




Jodie Foo OCBC Investment | http://www.ocbcresearch.com/ 2016-09-27
OCBC Investment SGX Stock Analyst Report BUY Maintain BUY 1.07 Same 1.070



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