SHENG SIONG GROUP LTD
OV8.SI
Sheng Siong Group: Earnings continue to grow
- Sheng Siong Group's (SSG) 3Q15 results met our expectations, as revenue grew 7.3% YoY to ~S$200m, making up 25.9% of our FY15 forecast.
- Net profit also increased 18.7% to S$14.5m, constituting 26.8% of FY15F.
- The group's new stores contributed 6.2% to its revenue growth, while 1.1% came from old stores.
- SSG managed to keep its gross profit margin steady at 24.3% vs. 24.2% in 3Q14, while on a quarterly basis, this was lower than the 25.2% seen in 2Q15 due to seasonality effect, slightly lower selling prices and higher input prices.
- We like that another lease was signed with HDB for a new store of ~4.3k sq ft at Dawson Road, Singapore, which is expected to be operational in Nov-15.
- The group's balance sheet remained healthy with net cash of S$126m.
- Maintain BUY with fair value estimate of S$0.95.
Jodie Foo
OCBC Securities
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http://www.ocbcresearch.com/
2015-10-23
OCBC Securities
SGX Stock
Analyst Report
0.95
Same
0.95
