Sheng Siong Group - A place to hide

Efficiency gains here to stay… 
9M14 gross margins improved to 24.2% from 23.0% (9M13), in line with our projections. This was despite food inflation for 9M14 coming in at 2.9% and increasing labour costs. Efficiencies from operating the Mandai distribution hub continue to reap cost savings and margins will continue to improve as more stores are added to the current 33 stores, given the current distribution hub utilisation rate of only about 70-75%. 

…and effective cost management 
Rising manpower costs and human resource shortages have plagued the industry over the past year. We see competitors such as Giant struggling to keep stores open as manpower becomes more of an issue. In contrast, Sheng Siong has managed this particularly well. Its administrative expenses increased from 16% of sales in 9M13 to 16.2% in 9M14 on higher employee bonuses, while its rental cost has remained stable at 2.6% of revenues. 

No growth yet for FY15, but has cash and pays dividends 
Flushed with cash (~S$178.7m) and armed with a track record of opportunistic store expansions during market downturns (three new outlets during the Asian financial crisis over 1995-2000; and 14 outlets during the 2000-2005 Dot-Com crash), Sheng Siong looks set to embark on another round of outlet expansions given the slowing regional growth and a falling Singapore property market. Its current share price implies an FY14 dividend yield of ~4.6% (FCF yield ~5%) and valuations at this level are undemanding. Immediate catalysts for the stock include 1) concrete outlet expansion plans, and 2) more visibility for its China expansion. 

《军中乐园》Paradise In Service SG Promo Tour

The Golden Horse award-winner Ethan Juan will be heading to Singapore on the 27th of October to promote his upcoming film,  Paradise in Service 《军中乐园》. 

Arrival in Singapore
Date: 27 October 2014
Time: 12pm
Flight No: BR225 (Terminal 1)

Meet-and-Greet 
Date: 27 October (Mon)
Time: 7pm
Venue: Bedok Mall 

Departure 
Date: 28 October (Tues)
Time: 1.10pm
Flight no: BR226 (Terminal 1)

Opening of GIUDI's flagship store - Media Invitation (161014)

I was invited to the exciting flagship store opening in Mandarin Gallery. 

Established in 1974, GIUDI expanded from Italy to Hungary, Spain, UK, US, Russia… and now, Singapore.

This will be Asia’s first GIUDI store!

The brand offers products made from high quality Italian leather at an affordable price range.

GIUDI leather is certified by VERA PELLE ITALIANA consortium, which classified it as genuine Italian leather. 

All leathers have been tanned exclusively with natural tannins of vegetable origins and does not contain substances prohibited by law. 

The designs are exclusive and unique to GIUDI, with some designs crafted solely for the Asian market in limited quantities.

To celebrate the grand opening, GIUDI has prepared leather keychains worth $80, complimentary with every bag purchase.

GIUDI - Mandarin Gallery Boutique is located at 333A Orchard Road #02-21

Operating Hours: 10am – 9pm T: 6733 5389

FB: www.facebook.com/GiudiAsia

Project SuperStar 《绝对SuperStar》

This Saturday 1.30pm at Bedok Point, come meet our Top 4 finalists, hostDasmond Koh, Manager Chan, Manager Pow and YES 933 DJ: Kunhua 坤华!
*First 100 fans will get to go on stage for an autographed poster of the Top 4, plus receive a goodie bag. Passes will be distributed at 12pm. Chance to win Grand Final tickets during our Q&A session too!

Mapletree Greater China Commercial Trust

MGCCT has performed well financially for its first full fiscal period after its IPO, with FY14 revenue and DPU exceeding its projections. We see continued organic growth from MGCCT’s resilient portfolio, underpinned by further positive rental reversions. We value MGCCT using the dividend discount model (DDM) as it is expected to pay out stable rental income (net of expenses) generated from its assets at regular intervals. We derive a fair value estimate of S$1.00 for MGCCT after inputting our financial forecasts and CAPM assumptions (cost of equity: 8.2 per cent; terminal growth rate: 2.0 per cent) in our model. Coupled with an attractive FY15F distribution yield of 7.0 per cent, this translates into total potential returns of 18.1 per cent. MGCCT is also trading at an undemanding FY15F P/B of 0.87x, which we believe is undervalued given its high quality and resilient portfolio. With a cheaper P/B ratio and a higher prospective distribution yield than its S-REITs peers, we initiate coverage on MGCCT with a BUY rating.