Sheng Siong ALL FOR YOU! *Huat Huat huat*

My other love. The love that I wished I had more. Pity the boat has sailed far and away.

Q3 results - stun like vegetables
Taken from their Q3 slides, I'll let the picture do the talking.

Key drivers: 
1. New outlets
2. Lower costs
  i. Lower Malaysian Ringgit (offset with rising USD)
 ii. Excellent cost control - Warehousing
iii. Productivity drive - more auto check out counters

Excluding new outlets' contributions, existing stores registered a 1.1% growth in sale. This points towards expansion of its presence being the key driver as organic growth seems to be stagnating.

New Stores
They've secured a new store at Dawson and is expect to contribute in November 2015. Their tactic to open stores in HDB buildings seems to be effective in keeping costs low and manageable. Notice they've no outlets in Town nor shopping malls.

Online
Their online platform still looks in the infancy stage, with the larger trend in Singapore still shopping in physical stores. I think Sheng Siong should fully prepare itself to tackle the online segment before Red Mart or HonestBee takes on a strong footing in this aspect.

China
Not much news on the development there. But as the competition seem to be rather keen in China, I'd rather SS do it slow and good than to throw the money down the drain.

Sheng Siong expanding its footprint

Sheng Siong is set to expand its total retail area in the coming months.

The Group has secured two new leases with the HDB at Bukit Panjang (5,220 square feet) and Punggol (3,360 square feet) and both of these stores are expected to commence operation in early May 2015. The Group was also the successful bidder for another HDB shop at Pasir Ris (3,200 square feet) and is waiting for HDB to grant the lease.

This would expand the group's total retail area by about 2%.

I'm loving my investment in Sheng Siong because of its excellent balance sheet, excellent cash flow and consistently profitable quarters/years with substantial growth. We should note that one way Sheng Siong could grow its top line is by opening new stores.

*huge cash holdings, no debts.

Sheng Siong is also superb in managing its costs. This is achieved by lower their input costs derived from their distribution centres. SS also owns the 506 Tampines Central instead of leasing the area. This helps control their costs over the years and also gives them the opportunity to lease out excess areas to earn additional income.

SS's share price has shot up quite substantially over the past month. I would be accumulating more lots should the price come down a bit more.