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Brokers' take

Published Fri, Sep 14, 2018 · 09:50 PM

Sheng Siong Group > Buy KGI Securities, Sept 14 Sept 14 close: S$1.11 Target price: S$1.24

WE initiate coverage on Sheng Siong Group Ltd (SSG) with a "buy" and discounted cash flow-based target price of S$1.24, implying a FY18 forecasted price/earnings ratio of 25.1 times. SSG is the third largest grocery and household products retailer locally with a 19 per cent market share (by sales), offering a FY18 forecasted dividend yield of 3.1 per cent supported by a cash generative business model.

We believe SSG's investment proposition is twofold, as it provides stable cash returns and offers organic growth through margin expansion.

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