Sheng Siong IPO

Coming soon: the IPO for Sheng Siong Supermarket? More info shall be needed (especially on the pricing of the IPO) before I'd say whether I'm interested or not.

So when shall we hear about NTUC IPO? Heh.

Singapore retail firm Sheng Siong has lodged its preliminary prospectus with the Monetary Authority of Singapore (MAS) for a public listing on the Singapore Exchange.

Sheng Siong is principally engaged in operating the Sheng Siong Groceries Chain, including 23 stores all across Singapore.

No pricing or range of units has been provided yet, although Sheng Siong said it intends to distribute up to 90 per cent of its net profit after tax to its shareholders for the financial years ended on 31 December 2011 and 31 December 2012.

Liu Jinshu, Investment Analyst of SIAS Research Pte Ltd said: "Local investors will be able to identify with the company given its retail presence, but should not attach too high a value to the company's brand. Investors must understand that the retail industry is relatively competitive and organic growth may be relatively slow".

Sheng Siong intends to use its gross proceeds from the issue of the new shares mainly as repayment of the term loan and development and expansion of grocery retailing business and operations in Singapore and overseas.

As at May 31, Sheng Siong's borrowings include a term loan of up to S$30 million issued by DBS Bank to CMM Marketing - which is part of the Sheng Siong Group - to part finance the construction of its Mandai Link Distribution Centre.

The proceeds will also be intended to be used for working capital purposes and expenses incurred in connection with the issue of new shares.

OCBC Bank is the issue manager, underwriter and the placement agent of the invitation shares offered in Singapore comprising of offer shares and placement shares.

According to the preliminary prospectus, unaudited proforma net earnings per share of the Sheng Siong Group for its financial year in 2011 based on the pre-invitation share capital of 1,140 million shares is 3.74 cents, and if assuming that the service agreements had been in place during the same period of time, is 3.99 cents.

Sheng Siong Supermarket is one of Singapore's largest retailers with over S$628.4 million in revenue during its financial year in 2010.

Based on revenue last year, the Group has a market share of 2.6 per cent in the Singapore retail industry and was ranked the third largest retailer in Singapore.

Singapore's supermarkets and hypermarkets are expected to experience approximately 4 to 5 per cent growth in revenues between 2011 and 2012, and between 1.5 and 2.5 per cent growth between 2014 and 2015.

From Channel NewsAsia, "Sheng Siong lodges preliminary prospectus with MAS".

Homegrown supermarket operator Sheng Siong - well known for its fresh produce and low prices - is going public.

It lodged yesterday its preliminary initial public offering prospectus with the Monetary Authority of Singapore (MAS) for a listing on the Singapore Exchange. No pricing or the amount to be raised was provided but Sheng Siong said it intended to distribute up to 90 per cent of its net profit after tax to shareholders for the financial years ending on Dec 31 this year and Dec 31 next year.

Sheng Siong intends to use the proceeds mainly to repay debt and for the development and expansion of its grocery business and operations in Singapore and overseas, as well as for working capital. As at May 31, Sheng Siong's borrowings include a term loan of up to S$30 million issued by DBS Bank to partially finance the construction of its Mandai Link Distribution Centre.

OCBC Bank is the issue manager, underwriter and the placement agent. According to the draft prospectus, unaudited pro-forma net earnings per share of Sheng Siong for its 2011 financial year based on the pre-invitation share capital of 1,140 million shares is 3.74 cents.

SIAS Research analyst Liu Jinshu said: "Local investors will be able to identify with the company given its retail presence but should not attach too high a value to the company's brand. Investors must understand that the retail industry is relatively competitive and organic growth may be relatively slow."

Sheng Siong operates 23 stores and is one of Singapore's largest retailers with more than S$628.4 million in revenue in its 2010 financial year, or about 2.6 per cent of the local pie. Singapore's supermarkets and hypermarkets are expected to experience approximately 4 per cent to 5 per cent growth in revenues between this year and next year.

From Today, "Sheng Siong readies for IPO".

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