Sheng Siong

Sheng Siong | Buy

Fair value: $1.12

June 28 close: $1.06

Broker: OCBC Investment, June 28

In times of volatility, given the trade tensions between the US and China as well as Europe, we believe Sheng Siong Group (SSG) offers certainty over its earnings outlook backed by a resilient business model. With nearly 100 per cent exposure to Singapore (except for a new start-up store in China), and selling mainly consumer staples, we expect SSG's business to be relatively unaffected by the ongoing trade spat in other parts of the world. We expect the 5.6 per cent same stores sales growth recorded in the first quarter of 2018 to be sustainable for fiscal year 2018. We continue to like SSG for its resilient business model supported by strong cash flow generation and solid balance sheet.

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