Sheng Siong Group - OCBC Investment 2016-04-11: Exercised option to purchase ~30k sq ft property in Changi

Sheng Siong Group - OCBC Investment 2016-04-11: Exercised option to purchase ~30k sq ft property in Changi SHENG SIONG GROUP LTD OV8.SI 

Sheng Siong Group: Exercised option to purchase ~30k sq ft property in Changi 

  • Granted with the option to purchase the property at Block 209 New Upper Changi Road #01-631 Singapore 460209 for S$53.0m dated 28 Mar- 16, Sheng Siong Group has since exercised this option on 8 Apr. 
  • This property is located within the recently upgraded Bedok Town Centre, and comprises the first and second storeys of a four- storey HDB. It has a GFA of ~2,844 sqm (about 30k sq ft), and a leasehold tenure of 86 years commencing from 1 July 1992. 
  • With net cash holdings of about S$126m as of FY15, the group certainly has room to fund such acquisitions. 
  • In this case, Sheng Siong has been leasing the property for its store operations since 2007, thus the proposed acquisition allows the group to ensure the store’s continued operations. 
  • In addition, this would eliminate the risk of higher rental reversions in future for this store as well as improve management’s control over the company’s cost structure. 
  • We maintain our BUY rating and fair value estimate of S$0.95.



Jodie Foo OCBC Securities | http://www.ocbcresearch.com/ 2016-04-11
OCBC Securities SGX Stock Analyst Report BUY Maintain BUY 0.95 Same 0.95


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