SG: MARKET PULSE: Consumer Sector (27 Nov 2013)

Date: 
2013-11-27
Firm: 
OCBC
Stock: 
Sheng Siong
Price Target: 
0.78
Price Call: 
BUY
Last Price: 
1.63
Upside/Downside: 
-0.85 (52.15%)
Firm: 
OCBC
Stock: 
Delfi
Price Target: 
3.95
Price Call: 
BUY
Last Price: 
0.82
Upside/Downside: 
+3.13 (381.71%)

MARKET PULSE: Consumer Sector
27 Nov 2013
KEY IDEA

Consumer sector: Challenging 2014 ahead

Summary: We expect the first half of 2014 to be an uneventful one for the consumer sector, and we maintain our UNDERWEIGHT rating. We feel that revenue growth is likely to be challenging given the recent spate of bearish data points both domestically and abroad, which indicate that consumer spending is likely to be subdued in 2014, and that companies will also continue to face margin pressures from rising operating expenses (i.e. higher staff and rental expenses). In addition, ongoing concerns over the overall macro environment and the focus on rising inflation will also keep a lid on consumer spending. Within our sector coverage our top picks are Sheng Siong Group [BUY; FV: S$0.78] as we like its defensive qualities in the face of weaker domestic sales, and Petra Foods [BUY; FYS$3.95] for its dominant leadership position in chocolate confectionary products. (Lim Siyi)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.


NEWS HEADLINES

- For 3Q13, IHH Healthcare's revenue grew by 13% YoY to RM1.7b while PATMI, excluding exceptional items, increased 63% to RM138.3m.

- Vallianz has received US$150m chartering contracts in the Middle East.

- Willas-Array Electronics expects its shares to start trading on the Main Board of the SEHK on 6 Dec, having received approval-in-principle for the dual primary listing.

- United Envirotech has announced the termination of the Transfer-Operate-Transfer project in Shangzhi, Harbin City, Heilongjiang Province, China.

- Novo Group reports that it expects to see a higher loss for its half year ended 31 Oct.

- Food Empire has established a S$200m multicurrency medium term note program.
Discussions
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Peter Graham Lancashire

How many Sheng Shiong stores are owned and how many leased?
What is Sheng Siong"s Strategy in this regard?
PGL

2013-12-25 19:09

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