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Analysts: Sheng Siong’s Expansion Makes It A Good Buy
Aspire, Hot Picks | 07 January 2015
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By: Raymond Leung
Articles (142) Profile

Analysts updates on Sheng Siong Group

Last week, Sheng Siong Group (SSG) announced that they have completed the purchase of a property on Tampines Central. This is pursuant to the announcements made by SSG on 9 June 2014 and 11 September 2014.

SSG paid the balance 90 percent of the consideration which amounted to $58.5 million to S-11 Wan Jin Investment, the vendor. The sale consideration was paid through proceeds from the placement of new shares from SSG that was announced on 4 September 2014.

A gross proceed of $80.4 million was received by SSG from the placement of new shares. $78.8 million have been allocated for expansion of the group while the remaining $1.6 million was used to pay for expenses incurred in the placement.

To date, $66.95 million have been used for expansion leaving SSG with $13.45 million. SSG intends to open a new supermarket on the second floor of the Tampines Central property with a gross floor area of approximately 9,800 square feet.

Operations for the second floor expansion are expected to begin by the end of January 2015. This will allow the outlet to catch up and enjoy the higher sales that usually accompanies the Chinese New Year festive period.

In addition, SSG has begun execution for the joint-venture (JV) that was announced in August 2014. This JV will put SSG’s foot in China, the second largest economy in the world.

In view of these developments, OCBC Research reiterated their “Buy” call towards SSG with a target price of $0.77. This will give the group a potential upside of 10.79 percent.

Trained in fund management, Raymond is familiar with shares and various investment vehicles.

Please click here for more information about this author.

Sheng Siong Group  1.140 -- --   
Business: Co is a supermarket chain operator.

Insight: Apr-19, 1Q19 revenue rose 10.1% to $251.4m mainly ... Read More

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