Singapore Company Focus
Sheng Siong Group
Refer to important disclosures at the end of this report
Bloomberg: SSG SP | Reuters: SHEN.SI
DBS Group Research . Equity
13 Jan 2015
BUY S$0.70 STI : 3,344.89
More positives ahead
Price Target : 12-Month S$ 0.82 (Prev S$ 0.78)
Reason for Report : Post-conference notes
Potential Catalyst: Market share gains, margin expansion
DBS vs Consensus: More conservative SSSG and store growth outlook

Buoyant outlook on store openings, margin and
earnings growth

Strengthening position in the mass market
segment
Analyst
Alfie YEO +65 6682 3717
alfieyeo@dbs.com

Raise FY15F and FY16F earnings by 5% on higher
gross margin expectation

Valuations below historical and peer average,
maintain BUY with higher $0.82 TP
Andy SIM CFA +65 6682 3718
andysim@dbs.com
Positive on store openings, margins and long-term
potential. We remain positive on the stock for three
reasons: 1) more stores are expected to open, starting with
SSG’s new Tampines store, which is scheduled to open this
month; 2) margins have further room to improve through
increased bulk handling activities (currently 60% of volume);
and 3) the planned opening of its first store in Kunming,
China, and e-commerce business offer longer-term growth
opportunities.
Price Relative
S$
Relative Index
0.8
209
0.8
0.7
189
0.7
169
0.6
0.6
149
0.5
0.5
129
0.4
109
0.4
0.3
Aug-11
89
Aug-12
Aug-13
Sheng Siong Group (LHS)
Forecasts and Valuation
FY Dec (S$ m)
Revenue
EBITDA
Pre-tax Profit
Net Profit
Net Pft (Pre Ex.)
EPS (S cts)
EPS Pre Ex. (S cts)
EPS Gth (%)
EPS Gth Pre Ex (%)
Diluted EPS (S cts)
Net DPS (S cts)
BV Per Share (S cts)
PE (X)
PE Pre Ex. (X)
P/Cash Flow (X)
EV/EBITDA (X)
Net Div Yield (%)
P/Book Value (X)
Net Debt/Equity (X)
ROAE (%)
Earnings Rev (%):
Consensus EPS (S cts):
Other Broker Recs:
2013A
687
52
48
39
39
2.8
2.8
(7)
25
2.8
2.6
10.8
24.9
24.9
20.6
16.8
3.7
6.5
CASH
25.8
Aug-14
Relative STI INDEX (RHS)
2014F
718
61
56
46
46
3.3
3.3
16
16
3.3
2.9
16.5
21.5
21.5
16.3
13.3
4.2
4.2
CASH
24.1
2015F
732
65
60
49
49
3.3
3.3
1
1
3.3
3.0
15.9
21.3
21.3
16.6
13.6
4.2
4.4
CASH
20.8
2016F
770
68
63
52
52
3.4
3.4
5
5
3.4
3.1
16.3
20.3
20.3
15.6
13.0
4.4
4.3
CASH
21.4
3.2
B: 8
5
3.5
S: 0
5
3.9
H: 0
ICB Industry : Consumer Services
ICB Sector: Food & Drug Retailers
Principal Business: Retailer principally engaged in operating the
Sheng Siong Groceries Chain.
Source of all data: Company, DBS Bank, Bloomberg Finance L.P
www.dbsvickers.com
ed: TH / sa: JC
SSG is gaining traction in the mass market segment.
SSG has been able to gain traction in the mass market space
as NTUC shifts its focus into the premium space. Mass
market NTUC supermarkets have grown less aggressively
than premium ones. DFI’s store count has also shrunk in
tandem with direct competition from NTUC, leaving SSG in a
sweet spot to dominate the mass market segment.
Raise gross margin assumption. We raise our gross
margin assumptions for FY15 and FY16F as we see room for
bulk purchasing activities to ramp up. We envisage that
supermarkets’ bargaining power will strengthen, with
NTUC’s new Joo Koon distribution hub. We raise both our
gross margin assumptions for FY15F and FY16F from 24%
to 24.4%. Lower oil prices could also lead to lower utility
costs and better operating margins.
Maintain BUY, with a higher TP of S$0.82 SSG currently
trades at 21.3x FY15F PE, below its historical (23x forward
PE) and regional peer average (25x forward PE). In line with
our earnings revision, we revise our TP to a higher S$0.82,
pegged to 25x FY15F PE and aligned to peer average.
Maintain BUY.
At A Glance
Issued Capital (m shrs)
Mkt. Cap (S$m/US$m)
Major Shareholders
SS Holdings (%)
Lim Family (%)
Free Float (%)
Avg. Daily Vol.(‘000)
1,504
1,052 / 789
29.9
33.9
36.2
2,434
Company Focus
Sheng Siong Group
INVESTMENT THESIS
Profile
Sheng Siong is the third largest supermarket operator in
Singapore, behind NTUC Fairprice and Dairy Farm
International.
Rationale
Improvement in SSSG, margins
 We expect SSSG to be sustained through marketing
initiatives. Margins are also anticipated to expand
through more bulk purchase activities and higher sales
mix of fresh products. Cash business
 We like supermarket businesses as they are typically cash
generative. Sales are made in cash while purchases for
inventory are generally bought on credit. Stable earnings, attractive dividend yield
 Supermarket businesses are non-cyclical and therefore
provide stable earnings and dividends to shareholders.
Sheng Siong pays out 90% or more of its earnings as
dividends.
Valuation
Our target price for Sheng Siong is S$0.82 based on 25x
forward earnings. We derive Sheng Siong's target price based
on PE. Our 25x valuation peg is based on +1SD of its
historical mean PE.
Risks
Revenue growth limited by store openings
 Store expansion has been tough for Sheng Siong as rental
rates have been a consistent challenge. It did not open
any new stores in FY13, leaving growth in FY14F solely
dependent on same-store sales growth. Excessive discounts and promotions may erode margins
 Heavier discounts and promotions vis-a-vis competitors
would drive sales revenue, but this could be gained at the
expense of margins. Rental and labour costs
 As a retailer, labour and rental costs are key operating
costs components. Labour costs have been increasing due
to foreign worker dependency ratio and the
government's initiative to raise wages. This trend, if it
persists, could lead to lower operating margins. Source: DBS Bank
Page 2
Company Focus
Sheng Siong Group
Keen investor interest in SSG
SSG has gained market share through DFI’s
rationalisation
Investors like SSG for its sound fundamentals. We hosted
SSG’s CEO, Mr. Lim Hock Chee and Finance Director, Mr.
Wong Soon Kit at our 2015 Pulse of Asia Conference in
Singapore last week, which drew keen interest from more
than 50 clients. Most investors were positive on SSG for its
stable earnings, dividend yield, net cash balance sheet, cash
generating capabilities, expanding margins, potential for
growth in China, and focus on e-commerce.
Gained market share in the midst of keen competition
Optimistic on the decline of wet markets in Singapore.
Management believes that supermarkets will eventually steal
market share from wet markets due to changing lifestyles,
consumption patterns and limited continuity of wet market
store operators. We remain positive on the supermarket
business over the long term as Singapore trend towards
purchase of grocery retail through modern channels. This
will benefit modern grocery retailers with higher demand for
fresh products, which will lead to higher margins over time.
Traditional grocery retailers giving way to modern
trade channels
Number of outlets
2011
2012
2013
2014
NTUC
254
269
280
290
DFI
672
686
655
616
SSG
25
33
33
33
Total
951
988
968
939
NTUC
42%
43%
45%
46%
DFI
34%
34%
34%
33%
SSG
12%
12%
14%
14%
Market share by revenue
Others
Total
12%
11%
7%
7%
100%
100%
100%
100%
Source: Euromonitor, DBS Bank estimates
Expanding store network
Raised funds through share placement to retain room for
gearing up in the future. Even though SSG’s net cash balance
sheet has room to gear up, management has opted to first
raise funds through shareholder placement as this allows
management to retain the option to gear up, should it require
further funding in the future.
Use of proceeds
Mkt share (%)
2011
2012
2013
2014
Modern channel
70.0
70.6
70.6
70.8
Use of placement proceeds
Traditional channel
30.0
29.4
29.4
29.2
Property purchase
100.0
100.0
100.0
100.0
Total
Source: Euromonitor, DBS Bank estimates
Placement fees
Utilised amount
Proportion
S$66.95m
83.7%
S$1.38m
1.7%
Excess
S$11.67m
14.6%
Total
S$80.00m
100.0%
SSG is gaining traction in the mass market segment. While
NTUC shifts its focus into the premium space by expanding
its NTUC Finest brand, SSG has been able to gain traction in
the mass market space. The number of NTUC supermarkets
targeting the mass market has grown less aggressively than
NTUC Finest, both in terms of floor area and store count.
DFI’s store count has shrunk in tandem with direct
competition from NTUC Finest. This leaves SSG in a sweet
spot to dominate the mass market segment, even as NTUC
Finest expands and competes directly with DFI’s cold storage.
Source: Company, DBS Bank
NTUC has been focusing on expanding Finest
35 stores by January 2015. SSG recently opened its 34th store
in Penjuru and will be opening its Tampines store this month.
SSG prefers not to pay high rental rates, but is more than
willing to purchase shop space in locations it wants to have a
presence in. It targets to open 2-3 stores per year.
Number of outlets
2011
2012
2013
2014
Finest
9
10
17
16
Xtra
4
5
6
7
100
Supermarkets
94
96
98
Xpress
24
24
24
20
Cheers
123
134
135
147
Total NTUC outlets
254
269
280
290
Source: Euromonitor, annual report, DBS Bank estimates
Page 3
Funds have been partially deployed, expanding footprint to
Tampines. SSG successfully completed its property purchase at
Block 506 Tampines Central 1 for S$65m on 31 December
2014. It will open a new supermarket with a gross floor area
of approximately 9,800 sqft on the property’s second storey.
Operations will commence by the end of January 2015. The
bulk of the S$80m placement has been utilised for its
Tampines property purchase.
Company Focus
Sheng Siong Group
Room for margin to improve
Raise FY15F and FY16F earnings by 5%
Will be aiming to bulk handle 80% of volumes eventually, in
line with NTUC. With the opening of Joo Koon distribution
hub, NTUC targets to bulk handle 80% of total volumes.
SSG currently bulk handles 60% of volumes and will be
aiming to bulk handle volumes similar to NTUC’s target. With
NTUC taking on bulk purchase, supermarkets' purchasing
power will strengthen, which is positive for margins.
Raise gross margin assumptions. We raise our gross margin
assumption for FY15 as we believe that higher margins will
eventually come through. SSG’s bulk purchasing activities
have room to ramp up and with NTUC having started Joo
Koon distribution hub, we envisage heavier discounts and
lower cost of goods due to the strengthening bargaining
power of supermarkets. We raise our gross margin
assumptions for FY15F and FY16F from 24% to 24.4%. We
are conservatively not imputing any gross margin change
going into FY16F. Lower oil prices could also lead to lower
utility costs and better operating margins.
27.0
+2sd
25.0
+1sd
23.0
19.0
-1sd
17.0
-2sd
Kunming LuChen Group Co Ltd
US$3m
30%
US$1m
10%
US$10m
100%
* Also SSG’s executive director
Source: Company, DBS Bank
E-commerce, a new store format for the future
Positive on e-commerce store format for the long term.
SSG’s e-commerce business now serves four areas and has
80 customers a day. E-commerce continues to be in the pilot
phase but management believes that it will be more viable
for places with high population density such as Singapore,
than other more sparsely populated markets. We maintain
our positive view on SSG’s e-commence initiative over the
long term.
Source: DBS Bank
Aug-14
60%
Avg
21.0
Feb-14
Stake
US$6m
Page 4
29.0
Aug-13
Registered capital
Sheng Siong
(x)
Feb-13
Shareholders
Total
31.0
15.0
Joint venture
Mr. Tan Ling San*
Trades at below historical average valuations
Aug-12
First store planned for opening in 2H15. Developments in
China have been progressing after SSG executed a
conditional JV agreement with its JV partners. The LuChen
Group manufactures and distributions food products such as
sauces and condiments and we believe this will be synergistic
to the JV. SSG’s initial investment will be US$6m, with the
first store in Kunming targeted to open in 2H15. It will avoid
competing directly with Walmart and Carrefour, but will be
leveraging on location, price, service, quality of products and
SKUs to differentiate itself from the competition. SSG’s CEO
Mr Lim will be initially deploying himself to Kunming to
oversee operational developments there.
Maintain BUY, with a higher TP of S$0.82. SSG currently
trades at 21.3x FY15F and FY16F PE, below its historical (23x
forward PE) and regional peer average (25x forward PE). In
line with our earnings revision, we revise our TP to a higher
S$0.82, pegged to 25x PE and aligned to peer average.
Feb-12
China presents longer-term growth opportunities
Valuation
Aug-11
We believe fresh products’ contribution will improve over
time. Mix of fresh products versus dry groceries currently
stands at 40%/60%, with blended gross profit margin at
24%. We believe contribution from higher-margin fresh
products will improve over time as wet markets lose appeal
over the longer term.
Company Focus
Sheng Siong Group
Key Assumptions
FY Dec
Rev per sqft
Operation Area (sqft)
Number of stores
2012A
2013A
2014F
2015F
2016F
1,593.3
1,718.5
1,718.5
1,718.5
1,718.5
400,000.0 400,000.0 400,000.0 426,000.0 452,000.0
33.0
33.0
33.0
37.0
41.0
On track to achieve our
four new store
assumption with new
Penjuru, Tampines stores
confirmed.
Segmental Breakdown
FY Dec
Revenues (S$ m)
Singapore
Total
Operating profit (S$ m)
Singapore
Total
Operating profit Margins (%)
Singapore
Total
Income Statement (S$ m)
FY Dec
Revenue
Cost of Goods Sold
Gross Profit
Other Opng (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Preference Dividend
Net Profit
Net Profit before Except.
EBITDA
Growth
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins & Ratio
Gross Margins (%)
Opg Profit Margin (%)
Net Profit Margin (%)
ROAE (%)
ROA (%)
ROCE (%)
Div Payout Ratio (%)
Net Interest Cover (x)
Source: Company, DBS Bank
Page 5
2012A
2013A
2014F
2015F
2016F
637
637
687
687
718
718
732
732
770
770
35
35
42
42
50
50
54
54
57
57
5.5
5.5
6.1
6.1
7.0
7.0
7.4
7.4
7.4
7.4
2012A
2013A
2014F
2015F
2016F
637
(496)
141
(106)
35
4
0
1
10
50
(9)
0
0
42
31
43
687
(529)
158
(117)
42
5
0
1
0
48
(9)
0
0
39
39
52
718
(544)
173
(123)
50
5
0
1
0
56
(10)
0
0
46
46
61
732
(553)
179
(124)
54
5
0
1
0
60
(11)
0
0
49
49
65
770
(582)
188
(131)
57
5
0
1
0
63
(11)
0
0
52
52
68
10.2
16.1
12.0
52.9
7.9
19.8
19.8
(6.6)
4.4
18.2
21.0
18.8
1.9
6.1
7.4
6.8
5.2
5.6
5.7
5.0
22.1
5.5
6.5
27.8
17.3
19.0
91.3
NM
23.0
6.1
5.7
25.8
15.9
22.3
92.5
NM
24.1
7.0
6.4
24.1
15.8
21.2
90.0
NM
24.4
7.4
6.7
20.8
14.5
18.5
90.0
NM
24.4
7.4
6.7
21.4
14.8
19.2
90.0
NM
Margins Trend
8.0%
7.5%
7.0%
6.5%
6.0%
5.5%
5.0%
2012A
2013A
Operating Margin %
2014F
2015F
2016F
Net Income Margin %
Below consensus EPS
Conservative as SSG had
already achieved 24.4% for
combined 2Q14 and 3Q14.
Company Focus
Sheng Siong Group
(4.2)
(9.0)
(13.4)
(11.9)
11.3
29.3
36.4
34.4
(9.6)
(9.5)
(8.3)
(11.6)
8.6
8.5
7.8
10.2
23.2
6.5
5.9
23.2
5.8
5.5
23.8
7.1
6.6
24.7
7.2
6.5
24.2
7.2
6.5
2012A
2013A
2014F
2015F
2016F
Net Fixed Assets
Invts in Associates & JVs
Other LT Assets
Cash & ST Invts
Inventory
Debtors
Other Current Assets
Total Assets
75
0
0
120
40
7
0
242
91
0
0
100
46
12
0
248
93
0
0
184
47
13
0
337
111
0
0
172
48
13
0
344
129
0
0
162
50
13
0
355
ST Debt
Creditor
Other Current Liab
LT Debt
Other LT Liabilities
Shareholder’s Equity
Minority Interests
Total Cap. & Liab.
0
80
9
0
2
152
0
242
0
88
8
0
2
150
0
248
0
90
10
0
2
234
0
337
0
91
11
0
2
239
0
344
0
96
11
0
2
245
0
355
(42)
120
3.9
61.0
28.6
2.6
1.9
1.4
CASH
CASH
N/A
9.5
(38)
100
5.0
59.0
30.1
2.8
1.6
1.2
CASH
CASH
N/A
9.1
(41)
184
6.3
60.9
31.6
2.5
2.4
2.0
CASH
CASH
N/A
8.6
(42)
172
6.3
61.0
31.8
2.1
2.3
1.8
CASH
CASH
N/A
8.8
(44)
162
6.2
60.0
31.2
2.2
2.1
1.6
CASH
CASH
N/A
8.5
Balance Sheet (S$ m)
FY Dec
Non-Cash Wkg. Capital
Net Cash/(Debt)
Debtors Turn (avg days)
Creditors Turn (avg days)
Inventory Turn (avg days)
Asset Turnover (x)
Current Ratio (x)
Quick Ratio (x)
Net Debt/Equity (X)
Net Debt/Equity ex MI (X)
Capex to Debt (%)
Z-Score (X)
Source: Company, DBS Bank
Page 6
10%
140
120
5%
100
0%
80
60
-5%
40
-10%
20
-15%
0
Revenue
3Q2014
11.3
19.0
22.8
24.4
Growth (QoQ)
Revenue Gth (%)
EBITDA Gth (%)
Opg Profit Gth (%)
Net Profit Gth (%)
Margins
Gross Margins (%)
Opg Profit Margins (%)
Net Profit Margins (%)
15%
160
2Q2014
186
(141)
45
(32)
13
1
0
0
0
15
(3)
0
12
12
17
1Q2014
172
(129)
42
(30)
12
1
0
0
0
14
(3)
0
11
11
16
4Q2013
190
(145)
45
(32)
14
2
0
0
0
15
(3)
0
13
13
18
3Q2013
170
(131)
40
(30)
10
1
0
1
0
12
(2)
0
9
9
14
180
2Q2013
178
(137)
41
(30)
11
1
0
0
0
13
(2)
0
11
11
15
20%
200
1Q2013
3Q2014
4Q2012
2Q2014
3Q2012
Revenue
Cost of Goods Sold
Gross Profit
Other Oper. (Exp)/Inc
Operating Profit
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net Interest (Exp)/Inc
Exceptional Gain/(Loss)
Pre-tax Profit
Tax
Minority Interest
Net Profit
Net profit bef Except.
EBITDA
Revenue Trend
1Q2014
2Q2012
Quarterly / Interim Income Statement (S$ m)
FY Dec
3Q2013
4Q2013
Revenue Growth % (QoQ)
Asset Breakdown (2014)
Debtors 3.7%
Net Fixed
Assets 27.6%
Assocs'/JVs 0.0%
Inventory 13.9%
Bank, Cash
and Liquid
Assets 54.7%
Unaffected by
increases in SIBOR.
Company Focus
Sheng Siong Group
Cash Flow Statement (S$ m)
FY Dec
Capital Expenditure
2012A
2013A
2014F
2015F
2016F
50
10
(8)
0
(6)
(11)
36
(12)
0
0
0
15
3
(38)
0
0
0
(38)
0
0
3.0
1.7
48
12
(9)
0
(3)
(1)
47
(26)
0
0
0
1
(25)
(41)
0
0
0
(41)
0
(19)
3.6
1.5
56
13
(8)
0
0
0
61
(13)
0
0
0
0
(13)
(42)
0
80
0
38
0
87
4.3
3.4
60
13
(10)
0
1
0
64
(29)
0
0
0
0
(29)
(44)
0
0
0
(44)
0
(10)
4.2
2.3
63
13
(11)
0
2
0
67
(29)
0
0
0
0
(29)
(47)
0
0
0
(47)
0
(8)
4.4
2.5
35
Pre-Tax Profit
Dep. & Amort.
Tax Paid
Assoc. & JV Inc/(loss)
Chg in Wkg.Cap.
Other Operating CF
Net Operating CF
Capital Exp.(net)
Other Invts.(net)
Invts in Assoc. & JV
Div from Assoc & JV
Other Investing CF
Net Investing CF
Div Paid
Chg in Gross Debt
Capital Issues
Other Financing CF
Net Financing CF
Currency Adjustments
Chg in Cash
Opg CFPS (S cts)
Free CFPS (S cts)
30
25
20
15
10
5
0
2012A
2013A
Target Price & Ratings History
S$
S.No .
1:
2:
0.71
3
0.66
4
6
2
5
0.61
0.56
Jan-14
1
May-14
Sep-14
Jan-15
Not e : Share price and Target price are adjusted for corporate actions.
Source: DBS Bank
Page 7
2015F
Assume 90% dividend
payout.
Source: Company, DBS Bank
0.76
2014F
Capital Expenditure (-)
Cl o s i n g Ta rg e t
Pri c e
Pri c e
25 Apr 14
0.62
0.76
10 Jun 14
0.65
0.76
Da te
R a ti n g
Buy
Buy
3:
31 Jul 14
0.71
0.85
Buy
4:
05 Sep 14
0.68
0.78
Buy
5:
29 Oct 14
0.65
0.78
Buy
6:
18 Dec 14
0.67
0.78
Buy
2016F
Company Focus
Sheng Siong Group
DBS Bank recommendations are based an Absolute Total Return* Rating system, defined as follows:
STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame)
BUY (>15% total return over the next 12 months for small caps, >10% for large caps)
HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps)
FULLY VALUED (negative total return i.e. > -10% over the next 12 months)
SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends
GENERAL DISCLOSURE/DISCLAIMER
This report is prepared by DBS Bank Ltd. This report is solely intended for the clients of DBS Bank Ltd and DBS Vickers Securities (Singapore) Pte
Ltd, its respective connected and associated corporations and affiliates (collectively, the “DBS Vickers Group”) only and no part of this document
may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBS Bank Ltd.
The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS
Bank Ltd., its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents
(collectively, the “DBS Group”)) do not make any representation or warranty as to its accuracy, completeness or correctness. Opinions expressed
are subject to change without notice. This document is prepared for general circulation. Any recommendation contained in this document does
not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for
the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain
separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss
(including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in
relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS
Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in
this document. The DBS Group may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek
to perform broking, investment banking and other banking services for these companies.
Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there
can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or
condensed and it may not contain all material information concerning the company (or companies) referred to in this report.
The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and
assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on
which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from
actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE
RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:
(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and
(b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk
assessments stated therein.
Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies)
mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to
the commodity referred to in this report.
DBS Vickers Securities (USA) Inc ("DBSVUSA")"), a U.S.-registered broker-dealer, does not have its own investment banking or research
department, nor has it participated in any investment banking transaction as a manager or co-manager in the past twelve months.
ANALYST CERTIFICATION
The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies
and their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her
compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report. As of the date of
the report is published, the analyst and his/her spouse and/or relatives who are financially dependent on the analyst, do not hold interests in the
securities recommended in this report (“interest” includes direct or indirect ownership of securities).
COMPANY-SPECIFIC / REGULATORY DISCLOSURES
1.
DBS Bank Ltd., DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”), their subsidiaries and/or other affiliates do not have a
proprietary position in the securities recommended in this report as of 30 Nov 2014.
2.
DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may beneficially own a total of 1% of any class of
common equity securities of the company mentioned as of 30 Nov 2014.
3.
Compensation for investment banking services:
DBS Bank Ltd., DBSVS, DBSVUSA, their subsidiaries and/or other affiliates may have received compensation, within the past 12
months, and within the next 3 months may receive or intends to seek compensation for investment banking services from the
company mentioned.
Page 8
Company Focus
Sheng Siong Group
DBSVUSA does not have its own investment banking or research department, nor has it participated in any investment banking
transaction as a manager or co-manager in the past twelve months. Any US persons wishing to obtain further information,
including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document
should contact DBSVUSA exclusively.
RESTRICTIONS ON DISTRIBUTION
General
This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or
located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be
contrary to law or regulation.
Australia
This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd
(“DBSVS”), both of which are exempted from the requirement to hold an Australian Financial Services Licence under the
Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. Both DBS and DBSVS are regulated
by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws. Distribution of this
report is intended only for “wholesale investors” within the meaning of the CA.
Hong Kong
This report is being distributed in Hong Kong by DBS Vickers (Hong Kong) Limited which is licensed and regulated by the
Hong Kong Securities and Futures Commission.
Indonesia
This report is being distributed in Indonesia by PT DBS Vickers Securities Indonesia.
Malaysia
This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR") (formerly known as HwangDBS Vickers
Research Sdn Bhd). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in
respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found
at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company
Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers,
employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in
the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory
and other services for the subject companies. They may also have received compensation and/or seek to obtain
compensation for broking, investment banking/corporate advisory and other services from the subject companies.
Wong Ming Tek, Executive Director, ADBSR
Singapore
This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No.
198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the
Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign
entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial
Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert
Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons
only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising
from, or in connection with the report.
Thailand
This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd. Research reports distributed are only
intended for institutional clients only and no other person may act upon it.
United
Kingdom
This report is being distributed in the UK by DBS Vickers Securities (UK) Ltd, who is an authorised person in the meaning of
the Financial Services and Markets Act and is regulated by The Financial Conduct Authority. Research distributed in the UK is
intended only for institutional clients.
Dubai
This research report is being distributed in The Dubai International Financial Centre (“DIFC”) by DBS Bank Ltd., (DIFC Branch)
rd
having its office at PO Box 506538, 3 Floor, Building 3, East Wing, Gate Precinct, Dubai International Financial Centre
(DIFC), Dubai, United Arab Emirates. DBS Bank Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority.
This research report is intended only for professional clients (as defined in the DFSA rulebook) and no other person may act
upon it.
United States
Neither this report nor any copy hereof may be taken or distributed into the United States or to any U.S. person except in
compliance with any applicable U.S. laws and regulations. It is being distributed in the United States by DBSVUSA, which
accepts responsibility for its contents. Any U.S. person receiving this report who wishes to effect transactions in any
securities referred to herein should contact DBSVUSA directly and not its affiliate.
Other
jurisdictions
In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified,
professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.
DBS Bank Ltd.
12 Marina Boulevard, Marina Bay Financial Centre Tower 3
Singapore 018982
Tel. 65-6878 8888
Company Regn. No. 196800306E
Page 9