Singapore Stock Strategy - CGS-CIMB Research 2020-05-22: Debunking Lockdown Myths

Singapore Stock Strategy - CGS-CIMB Research | SGinvestors.io GENTING SINGAPORE LIMITED (SGX:G13)

Singapore Stock Strategy - Debunking Lockdown Myths

  • We surveyed 860 people on new habits during the Covid-19 lockdown; surprises: online shopping, food delivery/takeaway did not skyrocket.
  • WFH is a preferred trend, with 48% of Singaporeans loving it, while 33% dislike it. We see more flexible office space needs in the medium term.
  • There is pent-up demand for dining out when the economy reopens fully (positive for retail REITS); weak travel and hotel demand for 6 more months.



Can new habits form post-COVID-19?

  • We sought to test the “21-day habit” theory as we gathered responses from 860 people, mainly from Singapore/Malaysia and some from Indonesia/Thailand. The questions encapsulated work-from-home (WFH) experiences, shopping habits, travel demand and social aspects. The results debunked a few myths.


Myth 1: People shopped online more in Singapore. Debunked

  • The fact is only 55% of Singapore-based respondents did more online shopping during the lockdown, even though 72% of the survey demographics was between 26 and 45 years old. Despite the fear of Covid-19 and closure of non-essential services, with people confined at home, the online shopping trend did not accelerate, to our surprise. Online shopping made up only 8.5% of total retail sales in Singapore as of Mar 2020.


Myth 2: People ordered more takeaway/food delivery. Debunked

  • The fact is only 53% of Singaporeans ordered food delivery or takeout > 2x a week. With no dine-in option, Singaporeans could have resorted to cooking more at home. There is also a pent-up demand for dining at restaurants as 48% of Singaporean respondents said they will dine out more often after the lockdown, to ‘experience’ and socialise.


Where lockdown habits diverge

  • Among Malaysian respondents, only 54% shopped more online during lockdown. However, Indonesians (77%) and Thais (87%) increased their online shopping frequency; we gather that the ecommerce adoption rates could be higher in these two countries as a larger percentage (c.26%/23%) shopped for groceries online (vs. 13% in Singapore and 8% in Malaysia).
  • We also saw that more Indonesians (66%) ordered food delivery/takeout > 2x a week, possibly due to logistical challenges in accessing supermarkets.
  • Malaysians and Thais seem to be more fearful of Covid-19 as c.50% them said they would not dine out more post lockdown mainly due to safety/hygiene.


Trends we expected

  • More than 70% of respondents across the countries would only resume overseas travel 3-6 months post-lockdown — negative for overall hotel REITS, aviation and medical tourism.
  • 52% of Singaporeans want to keep the WFH option — neutral near-term impact on office REITs, but possibly negative in the long run. We found little switching (11%) from offline to online grocery shopping (not surprising given the proximity of stores to homes in Singapore), underpinning our bullish view on supermarkets.
  • See attached 42-page PDF report "Singapore Strategy - Debunking Lockdown Myths; Testing The 21-Day Theory" for complete analysis.



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LIM Siew Khee CGS-CIMB Research | NGOH Yi Sin CGS-CIMB Research | EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2020-05-22
SGX Stock Analyst Report ADD MAINTAIN ADD 0.760 SAME 0.760



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