The part which worries me is china expansion. If tesco went into china and came out bleeding, then what would make ssg different from them? Also, tesco laid foot in china years earlier n for a very long time. Bearing in mind that buffet was also vested in tesco.
Singapore retail mkt is quite different from china. Correct me if i m wrong. Was reading tesco did the loyalty cards in china mkt and that didnt close the deal with the retail consumers in china. There were other thgs they did too but apparently they still bled.
Ssg has cost advantage in singapore cos of its size and centralised warehousing. China is a massive market with massive players. China issues aside, the cost of foreign labour is likely to hit ssg in 2016 with the higher foreign worker levies. For r2 foreign worker alone, its a jump from 550 to 650. Though revenue upside still avail in singapore market, considering the eventual govt target 6.9m population (from the press). Informal sources hinted 10m. If 10m, ssg revenues will fly (almost).
Your views? Just my thoughts. Correct me if i m wrong.
Vested in tiny numbers. Wanted to attend their agm but another list co also same time n date. Hope ssg had some vision on their china plans.
I do have a view on the China venture. Let me share and comments are welcomed.
Let's start a bit on "Sheng Siong way". In Singapore, Sheng Siong (SS) is the smallest among the top 3 players. Size enables SS to capture market share from smaller players and partly from DairyFarm Shop N Save, but not the key reason to remain competitive in Singapore, IMO. The warehouse helps in cost saving, but it is not due to hardware, but the "software". FYI, NTUC has a warehouse too. SS stands out among the top 3 players, in margins, and market share.
In short, the key merit of SS way, is the processes, or "software". I attended the recent AGM. I agreed with CEO statement, SS remains transparent to outsiders, without worrying the copycat, because the more valuable part is the "heart", or the "software" i.e the company processes and the corporate culture. That is hard to copy.
Let's move back to the main topic, China venture. I don't pretend I am sure the company will success. There is not so even within SS management. What I saw is the ingredients of success i.e. a good China partner, who appreciates SS way. Tesco is big, walmart is also big, both fail in one way or the other in China. They went in without suitable partner. DairyFarm went in with good partner recently. I believe both DairyFarm, and SS will success in China eventually.
24-04-2015, 07:57 PM (This post was last modified: 24-04-2015, 07:59 PM by vesfreq.)
(24-04-2015, 04:07 PM)specuvestor Wrote: Agree that China is difficult 20 years ago and 20 years later... though for vastly different reasons in different dynamics...so many failed ventures.. SSG has to thread slowly and so far IIRC they just doing "management" which is a good starting step that is low cost to extract out if needed.
That said I think the results is better than expected as I was expecting the counter to be around 70ish till Yishun starts. Wonder how much does Tampines really contributed cause I don't think the crowd is huge... or maybe I should go during saturdays
No.... go on weekday noon and also saturday. Its more indicative of the two relative extremes. A fellow friend went one day just before cny, the crowd was "not exciting". Perhaps, it would gain momentum over time.
Don't think my opinion matters a lot, but the stock ran up a bit too fast and feels more speculatively driven rather than growth or value driven.
PS: Did anyone attend the agm? How was the mood? Did management put up a good case for their china move?
The thing I am scared most is not nightmares or market crashes..... Its my greed that I fear the most.
When people ask what is my target price, I never have any good answer for it because Philip Fisher said before (in Common Stock Uncommon Profit) that the best time to sell is never. Equity investment is buying into ownership, not betting slips.
The path to greatness and wealth is necessarily dangerous.... because greed is a fearsome fore that threatens your success at every step.
I have updated my story on the company, after the recent 1QFY2015 result. My valuation has been upgraded to 79-82 cents per share. At the current price of 82.5 cents per share, it is more and less fairly priced.
(24-04-2015, 08:41 PM)CityFarmer Wrote: I have updated my story on the company, after the recent 1QFY2015 result. My valuation has been upgraded to 79-82 cents per share. At the current price of 82.5 cents per share, it is more and less fairly priced.
All comments are welcomed.
(vested)
I have to concur with your price. I was slightly more generous at 83 cts. Quite fairly valued. Thanks for sharing
The thing I am scared most is not nightmares or market crashes..... Its my greed that I fear the most.
When people ask what is my target price, I never have any good answer for it because Philip Fisher said before (in Common Stock Uncommon Profit) that the best time to sell is never. Equity investment is buying into ownership, not betting slips.
The path to greatness and wealth is necessarily dangerous.... because greed is a fearsome fore that threatens your success at every step.
Wah, SS PE's ratio already higher than Dairy Farm's PE ratio. Are they expecting SS's earning growth to exceed that of Dairy Farm? Dairy Farm has international exposure, & far far more outlets as compared with SS.
(27-04-2015, 05:14 PM)riverfish Wrote: Wah, SS PE's ratio already higher than Dairy Farm's PE ratio. Are they expecting SS's earning growth to exceed that of Dairy Farm? Dairy Farm has international exposure, & far far more outlets as compared with SS.
May be the dividend yield has compensated the higher risk due to PE
SS is still having 3.5%, while DairyFarm is 2.4% as of now, the closed prices.
27-04-2015, 07:49 PM (This post was last modified: 27-04-2015, 07:50 PM by corydorus.)
(27-04-2015, 05:23 PM)CityFarmer Wrote:
(27-04-2015, 05:14 PM)riverfish Wrote: Wah, SS PE's ratio already higher than Dairy Farm's PE ratio. Are they expecting SS's earning growth to exceed that of Dairy Farm? Dairy Farm has international exposure, & far far more outlets as compared with SS.
May be the dividend yield has compensated the higher risk due to PE
SS is still having 3.5%, while DairyFarm is 2.4% as of now, the closed prices.
(vested in SS)
Let's make thing simple in investment.
Here's how i look at it for SS. Rev up on avg 5% annually and i see rooms to go further. I am happy with the dividend too.
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A fellow friend went one day just before cny, the crowd was "not exciting". Perhaps, it would gain momentum over time. 