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 Post subject: Sheng Siong Group Ltd IPO
PostPosted: June 30th, 2011, 11:05 pm 
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THIS IS A PRELIMINARY PROSPECTUS AND IS SUBJECT TO FURTHER AMENDMENTS AND COMPLETION IN THE FINAL PROSPECTUS TO
BE ISSUED BY SHENG SIONG GROUP LTD. AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE (THE “AUTHORITY”). THIS
PRELIMINARY PROSPECTUS DATED 30 JUNE 2011 IS LODGED WITH THE AUTHORITY ON 30 JUNE 2011

http://masnet.mas.gov.sg/opera/sdrprosp ... s?OpenView


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: July 16th, 2011, 11:19 pm 
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Sheng Siong seeks up to S$141m in IPO: Sources 04:45 AM Jul 16, 2011 SINGAPORE - Supermarket operator Sheng Siong Group aims to raise up to S$141 million via its initial public offering on the mainboard of the Singapore Exchange expected next month, people familiar with the deal told Dow Jones Newswires yesterday. Sheng Siong is set to offer about 351 million shares at an indicative price range of S$0.36 to S$0.40 apiece, the sources said. The offer comprises about 201 million new shares and about 150 million vendor shares. Sheng Siong last month filed a preliminary prospectus with the Monetary Authority of Singapore, but did not provide details about the size or timing of the offering. The group, which operates 24 retail outlets throughout Singapore, reported revenue of S$628.4 million last year. OCBC Bank is the issue manager, underwriter and the placement agent. According to the draft prospectus, unaudited pro-forma net earnings per share of Sheng Siong for its 2011 financial year based on the pre-invitation share capital of 1,140 million shares is 3.74 Singapore cents. Sheng Siong said in the draft prospectus it will use the proceeds mainly to repay debt, develop and expand its grocery business and operations in Singapore and overseas, and for working capital.


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: August 6th, 2011, 9:36 am 
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Published August 6, 2011

Sheng Siong aims to raise $62.6m in IPO
Offer of 351.5m new and vendor shares at 33 cents apiece


By MINDY TAN


GROCERY retail chain Sheng Siong Group has launched its initial public offering (IPO) for a Singapore Exchange mainboard listing.

The group, which is geared up for aggressive expansion following its business consolidation leading up to the IPO, is aiming to raise $62.6 million in net proceeds from the offering. The 351.5 million invitation shares, comprising 201.5 million new shares and 150 million vendor shares, are priced at 33 cents apiece, a proforma price-earnings ratio of 10.4. The ratio is 'based on net EPS for FY2010 and post-invitation share capital of 1,341,500,000 shares'.

The issue is made up of a public tranche of 15 million shares and a placement portion of 336.5 million shares.

The company, which intends to distribute up to 90 per cent of its net profits for this year and next as dividends, believes this to be easily achievable, given its positive cash balance and the relatively low cost involved in setting up a new shop.

'The cost of opening a new shop is low; it merely involves the renovation and rental costs,' said Lim Hock Chee, chief executive of Sheng Siong. 'Plus, we already have more than 2,000 qualified employees so when we see a venue that is suitable for us, we will be ready.'

Wong Soong Kit, Sheng Siong finance director, pointed to the group's strong financials: 'At the point of listing, the group has (some) 38 million net cash, so the base is there.'

'In addition, (Sheng Siong is offering dividends of up to) 90 per cent net profit, but our Ebitda (earnings before interest, taxes, depreciation and amortisation) is higher than that. In a worst-case situation - we are at zero gearing now - the group has borrowing capacity,' he said.

Beyond Singapore's shores, the group is looking to expand into neighbouring Malaysia. It also has plans to increase the array of housebrands, from the existing 300 products under 10 housebrands (currently 1.5 per cent of the products it carries) to approximately 5 per cent in the long term.

This, it says, will enable the group to enjoy better profit margins, as the housebrands are sourced directly and produced exclusively for the group, lowering the overall cost structure compared to normal products. Housebrands currently contribute some 5 per cent to the company's total revenue.

The group's revenue grew to $628.4 million in FY2010 from FY2008's $610.2 million. The period also saw net profit more than doubling to $42.6 million in FY2010 from $20.6 million in FY2008. Net profit margins too climbed steadily from 3.4 per cent in FY2008 to 6.8 per cent in FY2010.

Sheng Siong, which was ranked second largest grocery retail chain by brand name based on its FY2010 revenue, has a 17.5 per cent market share according to Frost & Sullivan's study on the chain supermarket industry in March.

After listing, the family will retain a 73.8 per cent stake in the company.

Sheng Siong plans to use $20 million of net proceeds to expand the group's operations in Singapore and overseas. Another $30 million will be for repayment of a loan for Mandai Link Distribution Centre, its new corporate headquarters and warehousing and distribution facility.

The public offering closes on Aug 15 and trading is expected to take place on Aug 17.

OCBC Bank is the issue manager, underwriter and placement agent.

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'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: August 10th, 2011, 5:29 am 
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Published August 10, 2011

Sheng Siong IPO: Wrong timing, but the right stock?
By MINDY TAN

CERTAINLY, the IPO timing is bad - but is Sheng Siong the right stock for a recession? While demand will be steady, the supermarket and hypermarket industry in Singapore is clearly engaged in steep competition, with market shares of major participants plateauing, or in some instances falling slightly, figures from Sheng Siong's prospectus show.

While the top three major players in the retail industry - NTUC FairPrice Co-operative with a 7.6 per cent share of the overall retail market (based on revenue), Dairy Farm International Holdings (7.4 per cent) and Sheng Siong Group (2.6 per cent) - have successfully sustained and grown their market shares between 2006 and 2010, growth seems to have come to a standstill.

FairPrice and Dairy Farm, for instance, after registering impressive market share gains of 0.5 per cent respectively from 2008 to 2009, remained stagnant at 7.6 per cent and 6.9 per cent respectively between 2009 and 2010.

Sheng Siong, on the other hand remained stagnant between 2008 and 2009 at 2.7 per cent before dipping slightly to 2.6 per cent last year, following consolidation efforts pre-IPO.

Singapore's supermarkets and hypermarkets are expected to experience approximately 4-5 per cent growth in revenues between 2011 and 2012, and 1.5-2.5 per cent growth during 2014 and 2015, according to the industry overview in Sheng Siong's prospectus. Fighting over the pie are grocery retail chains that, in 2010, operated over 800 stores in Singapore.

Drilling down to the grocery retail segment itself (excluding convenience stores and hypermarkets), FairPrice took a clear lead in estimated market share by revenue, having sustained a market share that is nearly half of the total grocery market since 2005.

In 2010, its estimated market share by revenue stood at 46 per cent, followed by Sheng Siong, which had a 17.5 per cent market share.

Despite strong competition in the market, Sheng Siong has a number of factors working in its favour. From 2006 to 2010, Sheng Siong reported the highest compound annual growth rate (CAGR) of the top three grocery retail chains at 13.08 per cent, as opposed to FairPrice's 8.86 per cent and Dairy Farm's 5.29 per cent.

In addition, the group generated the highest revenue per square metre (psm) of operation space, at $17,085 psm. This was followed by FairPrice at $11,924 psm and Dairy Farm at $8,456 psm.Â

While competition within the industry is intense, the supermarket and hypermarket segment does boast a remarkably anti-cyclical nature, given the fact that it deals in basic daily necessities, not luxury goods.

And who can forget the juicy carrot Sheng Siong has dangled before investors in the form of a 90 per cent dividend payout ratio?

Added to Sheng Siong's positioning of its business as a defensive play for investors, its pledge to distribute up to 90 per cent of net profit after tax in FY2011 and FY2012 may just be what investors are looking for in the midst of a jittery market.

The group, which is seeking to raise $62.6 million in net proceeds from the offering after expenses, is issuing 351.5 million invitation shares, comprising 201.5 million new shares and 150 million vendor shares, priced at 33 cents apiece.

Of the expected net proceeds of $62.6 million, $30 million will go towards repayment of their term loan, $12.6 million will go towards working capital purposes, and $20 million will go towards development and expansion of their business in Singapore and overseas.

The large placement of vendor shares, which will yield $48.2 million for the brothers of the founding Lim family, could put off some investors wary of IPOs that appear to be exit exercises. To be fair, however, the Lim family will be buying some shares back in the IPO, and remain in majority control.

Other risks that investors should be aware of include rising labour costs, given the labour-intensive nature of the industry. According to Sheng Siong, however, this is mitigated through its focus on technology and innovation to reduce dependence on labour.

The big question now is whether the defensive appeal of Sheng Siong's IPO will be overwhelmed by extremely volatile market conditions. Indeed, investors who are keen to buy into Sheng Siong might do better to wait till after it starts trading on Aug 17 for a cheaper entry - if they believe the stock will fall below its offer price should bearish market sentiment continue.

_________________
'Kites rise highest against the wind; not with it' - Sir Winston Churchill

'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: August 17th, 2011, 5:32 am 
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Singapore Companies
Published August 17, 2011

Sheng Siong supermarket's IPO 1.3 times subscribed
Public tranche of 15m shares 5.7 times subscribed; trading starts today


By MINDY TAN

THE initial public offering of local supermarket chain Sheng Siong closed on Monday with a subscription rate of about 1.3 times.


Mr Lim: 'This IPO will serve as a platform for us to attract talent as we move towards our next phase of expansion and growth,' said the chief executive of Sheng Siong Group
Based on an offer of 351.5 million invitation shares priced at 33 cents apiece, the total valid applications received amounted to about 448.7 million invitation shares.

The public tranche of 15 million shares in the IPO saw valid applications for some 85.3 million shares, resulting in it being about 5.7 times subscribed.

For the placement tranche of 336.5 million shares, some 363.4 million placement shares were validly subscribed for and/or purchased, resulting in it being approximately 1.1 times subscribed.

Anchor investors include JF Asset Management, Prudential Asset Management (Singapore), FIL Investment Management (Hong Kong), VPL Funds, and Kenrich Partners.

Some family members of the founding Lim brothers were also allotted and/or allocated placement shares, including their sisters, in-laws and a daughter.

Lim Hock Chee, chief executive of Sheng Siong Group, said: 'The positive response to our IPO serves as a testament to the confidence these investors have in our group and its investment merits.

'Marking a significant milestone in our group's corporate history, this IPO will serve as a platform for us to attract talent as we move towards our next phase of expansion and growth.'

Trading of Sheng Siong shares is expected to start today.

_________________
'Kites rise highest against the wind; not with it' - Sir Winston Churchill

'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: August 25th, 2011, 5:17 am 
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Singapore Companies
Published August 25, 2011

Sheng Siong stock turns market darling
It surges 13.9% before closing at 42.5cents, up 7.6%


By JAMIE LEE

RECENTLY listed supermarket chain Sheng Siong proved to be a market darling yesterday as its shares shot up as much as 13.9 per cent amid market perception that its business is recession-proof.

The stock climbed as high as 45 cents before closing the day at 42.5 cents, up three cents or 7.6 per cent. Against its IPO price of 33 cents, the stock - which made its trading debut on Aug 17 - has jumped 28.8 per cent.

'People are buying because of the recession-proof business, it seems,' said one dealer at Kim Eng Securities.

Sheng Siong had also said that it would pay out up to 90 per cent of its FY2011 and FY2012 post-tax profits as dividends.

The prospect of a healthy dividend yield has also attracted interest, said another remisier. He added that the stock was a darling for traders looking for a quick punt.

It was the most heavily traded stock yesterday, with 160.3 million shares changing hands.

Figures from Sheng Siong's prospectus showed that as at 2010, the group held a 2.6 per cent market share of the retail market in revenue terms. It is ranked third after NTUC FairPrice Co-operative, which has a 7.6 per cent share, and Dairy Farm International, with 7.4 per cent.

But Sheng Siong commanded the highest compound annual growth rate of the top three grocery retail chains from 2006 to 2010. This stood at 13.08 per cent, against FairPrice's 8.86 per cent and Dairy Farm's 5.29 per cent.

Between 2011 and 2012, Singapore's supermarkets and hypermarkets are expected to grow their revenue by 4-5 per cent. The growth, however, is expected to slow to 1.5-2.5 per cent in 2014 and 2015.

_________________
'Kites rise highest against the wind; not with it' - Sir Winston Churchill

'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: September 3rd, 2011, 3:00 am 
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Singapore Companies
Published September 2, 2011

Sheng Siong leases new store in Woodlands

By MINDY TAN

HOMEGROWN supermarket chain Sheng Siong yesterday announced that it had entered a lease agreement to secure premises for a new store in Woodlands, its first announcement since its initial public offering (IPO) last month.


What's in store: For the Woodlands Park Supermarket that Sheng Siong is setting up, the company intends to fund the lease payments from internal resources
The group entered the lease agreement with JYC-NCL on Aug 1 to lease a 14,239 square foot premise located at 200 Woodlands Industrial Park E7 for use as a supermarket.

Subject to the terms and conditions of the lease agreement, the group may lease the Woodlands Park Supermarket for a period of three years from Oct 1, this year, with two consecutive options to renew the lease agreement for additional periods of three years each.

The company said that it intends to fund the lease payments for the Woodlands Park Supermarket from internal resources.

The group, which saw its IPO 1.3 times subscribed, raised $116 million, of which $62.6 million in net proceeds was set aside to fund the expansion of its grocery retail business in Singapore and overseas, working capital and repay term loans.

Since its trading debut, the stock has been one of the most heavily traded; 246.2 million shares changed hands yesterday, making it the top traded stock by volume.

'The high trading volume can be explained by the significant price movement, which could attract the attention of some retail and intraday traders, thus creating a self-reinforcing cycle and contributing to the overall volume,' said SIAS investment analyst Ng Kian Teck.

Following brisk take-up which saw Sheng Siong's stocks flying off the shelves in previous sessions, Sheng Siong's stock plunged as much as 10 cents, before closing at $0.50 yesterday.

The stock, which opened yesterday at $0.57, saw a high of $0.575 before dipping to as low as $0.47.

Even after the fall, Sheng Siong shares closed around 51.5 per cent higher than the IPO price of $0.33 on Aug 17.

Mr Ng said: 'Movement today came down quite a bit, with quite a bit of volume. This is probably due to investors being more wary of the rich valuation that the price has on the counter itself. They are probably more cautious, resulting in the dip we've seen today.'

_________________
'Kites rise highest against the wind; not with it' - Sir Winston Churchill

'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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 Post subject: Re: Sheng Siong Group Ltd IPO
PostPosted: September 6th, 2011, 5:52 am 
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Singapore Companies
Published September 6, 2011

Sheng Siong's share price slips a bit more
Counter falls a further 1.5cents to close at 47.5cents, but still above IPO price of 33cents


By NISHA RAMCHANDANI

SHARES in supermarket operator Sheng Siong continued to decline yesterday, giving up a further 1.5 cents to close at 47.5 cents yesterday.


Closer look: In the two weeks after its trading debut on Aug 17, the stock made fairly strong gains, even amid the market volatility which dogged most of August, as it is viewed as a defensive stock
Yesterday's closing price was around 15.2 per cent lower compared to Aug 31, when it closed at a high of 56 cents.

However, shares in the supermarket operator - which was the most heavily traded by volume yesterday with 89.94 million shares changing hands - are still above its IPO price of 33 cents.

In the two weeks after its trading debut on Aug 17, the stock made fairly strong gains, even amid the market volatility which dogged most of August, as it is viewed as a defensive stock. The group has also said that it plans to pay out up to 90 per cent of its FY2011 and FY2012 post-tax profits as dividends.

According to its prospectus, as at 2010 the group held a 2.6 per cent market share of the retail market in revenue terms. This puts it in third place after NTUC FairPrice Co-operative, which has a 7.6 per cent share, and Dairy Farm International, with 7.4 per cent.

Between 2011 and 2012, Singapore's supermarkets and hypermarkets are expected to grow their revenue by 4-5 per cent, though this is expected to slow to 1.5-2.5 per cent in 2014 and 2015.

Sheng Siong, which has 23 stores across Singapore, also has plans to expand.

Last week, the group announced that its wholly owned subsidiary Sheng Siong Supermarket has entered into a lease agreement with JYC-NCL to rent premises at Woodlands Industrial Park for use as a supermarket. This is to be funded by internal resources.

According to the agreement, the group may rent the premises - which spans some 14,240 square feet - for three years starting Oct 1, with two consecutive options to renew for additional periods of three years each.

The group raised $116 million through its IPO, of which $62.6 million in net proceeds was set aside to fund the expansion of its grocery retail business in Singapore and overseas, working capital and repay term loans.

_________________
'Kites rise highest against the wind; not with it' - Sir Winston Churchill

'A practitioner is not judged by the rigour of his logic or by the elegance of his presentation. He is judged by the results.' - Dr Goh Keng Swee


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