Sheng Siong Group’s (SSG) FY13 results came in within our expectations. Revenue increased 7.9% to $$687.4m and forms 99.9% of our FY13 forecasts. Gross margin improved from 22.1% to 23.0% due to better sales mix and utilisation of distribution centre. Core net profit increased 18.6% to S$38.9m, or about 99.2% of our FY13 forecasts. A final dividend of 1.4 S-cents per share is proposed, bringing the total dividend to 2.6 S-cents per share in FY13, or a yield of 4.3% based on yesterday’s closing price. We maintain our BUY and keep our fair value of S$0.70 under review pending an analyst briefing.

Source: OCBC Research - 21 Feb 2014