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
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http://www.ocbcresearch.com/
2016-04-11
OCBC Securities
SGX Stock
Analyst Report
0.95
Same
0.95
