(17-04-2017, 11:13 AM)Xiaosaint Wrote: [ -> ]Annual report is out!
Seems like they have been having trouble with their China venture. The retail store opening is delayed and is now expected to happen by end of 3Q17.
http://infopub.sgx.com/FileOpen/SSG_2016...eID=448079
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IMO the later the better. Push out to 2020 even better LOL
"Our subsidiary Sheng Siong (China) Supermarket Co., Ltd obtained vacant possession of the leased retail space in Kunming, and we envisaged that the supermarket would commence operations by the end of 3Q2017."
In earlier section, another store on the way ?
"We have acquired the HDB shop at Block 209 New Upper Changi Road, where our Bedok store is located for defensive reasons. "
Anyone went to the AGM for Sheng Siong? Anything interesting to share? E.g. What is the reason for the delay of their China venture? Expansion plans in SG? Etc.
I wasn't able to go as I had to attend another AGM.
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(28-04-2017, 11:42 AM)Xiaosaint Wrote: [ -> ]Anyone went to the AGM for Sheng Siong? Anything interesting to share? E.g. What is the reason for the delay of their China venture? Expansion plans in SG? Etc.
I wasn't able to go as I had to attend another AGM.
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Today is probably the day with most AGMs
No, I am not going due to another AGM too.
here's my 2cents worth.
I have been digging extremely deep into this sector speaking to Sheng shiong's competitors and suppliers.
At the same time trying to decipher how each product category contribute to the bottom line. Supermarkets, the bigger it is, the better margins due to a larger product mix and ability to sell a larger potion of higher margin products. That explains why a 300sqm floor area costs well above 2 times the 150sqm.
What most people got wrong is not about Sheng Shiong but more about its competitors. Besides the usual suspects, NTUC and Giant, some of the other "smaller" players are not that small. While the 'smaller player' owned supermarket operations may not have the scale of the top 3, their cash position of the group is high and is a diversified group with strong cash flows from other existing businesses. Writing them off as small players would be a mistake.
Valuation aside, sheng shiong is a great company overall but others are also seizing the opportunities within the supermarket space. While the bidding frenzy have eased somewhat, it is unlikely that Sheng Shiong or anyone else will get a good deal on the bidding of HDB shops. Profits from new stores is marginal at best for the near future. Earnings growth will be muted locally.
The difference between full time analyst and the free lance toe is analyst spends no more than 50 hours on one report, the toe spend hundreds of hours at least.
Margin around 26%. So we are saying new store opening will be marginally at best. Interesting.
So is it better not to win any new bid for space till Market gives us a good deal. And it will be Good News to the Business actually not winning the bid currently ?
Cory
(03-05-2017, 03:14 PM)corydorus Wrote: [ -> ]Margin around 26%. So we are saying new store opening will be marginally at best. Interesting.
So is it better not to win any new bid for space till Market gives us a good deal. And it will be Good News to the Business actually not winning the bid currently ?
Cory
The short answer is yes. It is neither good news nor bad news that they did not win, depends how you look at it.
They would be very foolish if they were to win the bids at peak HDB rental prices.
Are the rentals going down? Yes. Are they going down to a point where it can be close to what they are paying for at other stores. No.
Will the new stores be as profitable as old ones if they win? No. Old store, old rent. New store, new higher rent(significantly higher).
Old store stable revenue. New store, need time to break even and be profitable, especially new estates.
2nd half of the year is always holiday seasons (aka Christmas, end of DEC, welcoming a NY, workers's Bonus time, etc..).
Not vested.
Expansion path. Probably need to conserve cash for it. A good thing.
Vested