SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

<figure class="editor-figure mceNonEditable"><img src="https://api2.sgx.com/sites/default/files/2020-12/NeoGroup-CEO.jpg" class="editor-image img-responsive"></figure>
<div class="content-caption">NeoGroup-CEO</div>

For Neo Kah Kiat, founder of SGX-listed food and catering solutions provider Neo Group, dreaming is hard work.&nbsp;
The self-made entrepreneur draws inspiration from the words of British archaeologist and writer Colonel Thomas Edward Lawrence, better known as Lawrence of Arabia: “All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake up in the day to find it was vanity, but the dreamers of the day are dangerous men, for they may act their dreams with open eyes, to make it possible.”
Neo is one such hard-nosed dreamer – dangerously so. “We dream with our eyes open and our feet grounded,” he pointed out. “Everything we need to succeed is in our hands. So work very hard – doubly hard, harder than others – and opportunities for you to realise your dreams will come.”
Neo displayed enterprising traits growing up. On weekends, he sold otah and satay – grilled minced fish wrapped in coconut leaves and grilled skewered meat – to earn pocket money. He chose to drop out of school at 15 despite topping his class, so that he could complete his National Service earlier and start his entrepreneurial journey.
“I believed this was the only way to get out of the poverty cycle – many graduates and degree holders at that time were just earning S$2,000 plus a month,” he recalled. “I wasn’t keen to be a worker or an employee – I saw more potential in running my own business.”
When he turned 21, the opportunity to set up his own catering business emerged, and Neo Garden was established in 1992. The rest, as they say, is history, but it was an uphill struggle. “It takes a lot, a lot of hard work, grit and resilience to stay in business,” he admitted.
Listed on SGX Catalist since July 2012, Neo Group is now an integrated food and beverage company, and one of the most recognised brand names on the Singapore food scene.
Its signature catered dishes range from its famous curry chicken – created from a chilli crab recipe – to nonya laksa, and yam paste with gingko nuts. It has been Singapore’s largest food caterer since 2011, grabbing a 20.5% market share last year, up from 16.8% in 2018. &nbsp;
Seed to Harvest 
 Neo was appointed the Group’s Chairman and Chief Executive Officer in 2012. Today, the Group has scaled and expanded into five business segments – Catering, Manufacturing, Supplies &amp; Trading, Retail and Property. It has a strong portfolio of more than 25 brands under its belt, including Neo Garden, Orange Clove, umisushi, DoDo fish ball and Joo Chiat Kim Choo traditional rice dumplings.
Its food retail network consists of more than 20 outlets islandwide, while its trading network, through its subsidiaries, spans 30 countries. The Group’s operations are supported by its central kitchens, manufacturing facilities, warehouses, and nearly 1,400 employees.
“The past eight years have been electrifying for the Group. Our journey is a testament to our determination – growing from a single seed to full harvest,” said Neo. “And we continue to forge ahead and conquer, with a vision to expand beyond a billion dollars.”
To achieve this goal, Neo Group will continue to focus on its core pillar – catering, which accounts for more than 50% of total revenues. “We will continue to expand our diverse offerings, ranging from eldercare and childcare, to the tingkat delivery market, and white-collar institutional catering,” he said. “Tingkat” refers to multi-tiered tiffin carriers that can pack several food items including soups.
“This diversity has helped us. During Singapore’s Circuit Breaker, our tingkat business – Kim Paradise, the largest in Singapore – has tripled, serving close to 10,000 customers, offsetting the decline in our traditional catering sales,” he pointed out.
“Since then, we have been experiencing a healthy month-on-month growth, following greater awareness of this food delivery service.”
The Group targets to grow its catering division to a total of 30 brands, as it taps on changing consumer behaviours and expands its share of the domestic market to 50%.
The next area of focus is its Food Manufacturing division – under the TS Group – which is the Group’s second-largest revenue driver and Singapore’s No. 1 surimi manufacturer, distributing to more than 30 countries worldwide.
This division will ride on increasing demand from households for home-cooked and ready-to-eat products, as well as leverage on its global distribution network to drive export sales to new and existing markets.
“Our manufacturing capacity in Singapore and Malaysia is only operating at half its capacity,” Neo said.
“We’re exploring options to export products other than surimi, broadening our range through R&amp;D and with overseas partners, as well as introducing new machinery and technology to boost our capacity.”
The Group also wants to broaden its overseas footprint to 50 countries from the current 30, by setting up regional offices in markets like China, Europe and North America. &nbsp;
Pursuing “Oxygen” 
 At the same time, mergers and acquisitions will remain the Group’s “oxygen”, due to the slower, more challenging nature of organic growth, Neo added.
“Over the years, we’ve executed bite-sized acquisitions. This is an area which we will continue to nurture, looking out for bigger companies that can create further synergies.”
Neo Group embarked on an acquisition spree in 2018, raising its stake in its DoDo-branded fish paste products maker, and buying Lavish Dine Catering as well as How’s Catering. Last year, it completed the acquisition of a 49% stake in ER Group, a wholesaler and food processing company that owns warehouses and cold room facilities.
So what is it that sets the Group apart from its peers? Neo points to technology, automation, and its “Go Lean” manufacturing initiative as key differentiators.
“IT sits at the heart of Neo Group, and we’re ahead of the rest of the industry in this respect,” he said.
“Only with technology can we future-proof and scale the business. We began our journey of Industry 4.0, introducing e-invoices, e-payment and paperless initiatives, two years ago, and continue to build on our digital transformation plans, which include artificial intelligence, data analytics and new machinery.”
Its “Go Lean” manufacturing drive, which involves the streamlining of product offerings, enhanced automation and increased production efficiency, have also boosted profit margins.
Diversifying out of food, into property, is another brainchild. “Entering the property business has always been our plan, but it required finding the right partner,” Neo said. “With our acquired businesses now stable and healthy, we’re ready to move forward.”
“We aim to unlock additional and recurring revenue streams through rental and management fees, as well as potential and beneficial synergies with our existing businesses,” he added.
True to character, Neo remains unfazed by challenges that crop up in the Group’s day-to-day operations. Does anything keep him up at night then? “Yes, slow growth,” he admitted. “When things move too slowly!”
Not surprisingly, the 50-year-old father of two wants his children to develop a strong fighting spirit. “I always let my kids try what they want, because I want them to know that the only limitation is yourself. They must never stop learning, because even at this point in my life, I am still picking up new things,” he added.
Neo’s other mantra is lifelong philanthropy, and looking out for others in the community. “Giving is the expressway to success,” he said. “It brings happiness to others, and most importantly, changes our perspective on life.”
“We want to inspire everyone to give back, because progress is never achieved alone – we move forward together – with our staff, our stakeholders, and our community.”
&nbsp;
Neo Group Ltd
Listed on SGX Catalist, Neo Group is a homegrown, integrated food solutions provider. Established since 1992, the Group possesses an award-winning track record and is one of the most recognised brand names in Singapore. The Group has been named the number one events caterer in Singapore and provides one-stop food and catering solutions. It has a vertically integrated value chain across four business segments, namely, Catering, Manufacturing, Supplies and Trading and Retail. Through its subsidiaries, the Group has a trading network spanning more than 30 countries worldwide. Its operations are supported by its central kitchens, manufacturing facilities, warehouses and over 1,400 employees.
The company website is: <a href="https://www.smartkarma.com/www.neogroup.com.sg" target="_blank" rel="noopener">www.neogroup.com.sg</a> Click&nbsp;<a href="https://www.sgx.com/securities/equities/5UJ" target="_blank" rel="noopener">here&nbsp;</a>for the company's StockFacts page. For the six months ended 30 September 2020 financial results, click&nbsp;<a href="https://links.sgx.com/1.0.0/corporate-announcements/TZM2UB3XS2883Y1J/638346_NGL%20-%201HFY2021%20NR%20-%20Final.pdf" target="_blank" rel="noopener">here</a>.
&nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click<a href="https://www.sgx.com/research-education/market-dialogues" target="_blank" rel="noopener">&nbsp;</a><a href="https://www.sgx.com/research-education/market-dialogues" target="_blank" rel="noopener">here</a>. &nbsp; For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;<a href="https://www.smartkarma.com/jennifer.t@sgx.com" target="_blank" rel="noopener">jennifer.t@sgx.com</a>.


NeoGroup-CEO

For Neo Kah Kiat, founder of SGX-listed food and catering solutions provider Neo Group, dreaming is hard work.&nbsp;
The self-made entrepreneur draws inspiration from the words of British archaeologist and writer Colonel Thomas Edward Lawrence, better known as Lawrence of Arabia: “All men dream: but not equally. Those who dream by night in the dusty recesses of their minds wake up in the day to find it was vanity, but the dreamers of the day are dangerous men, for they may act their dreams with open eyes, to make it possible.”
Neo is one such hard-nosed dreamer – dangerously so. “We dream with our eyes open and our feet grounded,” he pointed out. “Everything we need to succeed is in our hands. So work very hard – doubly hard, harder than others – and opportunities for you to realise your dreams will come.”
Neo displayed enterprising traits growing up. On weekends, he sold otah and satay – grilled minced fish wrapped in coconut leaves and grilled skewered meat – to earn pocket money. He chose to drop out of school at 15 despite topping his class, so that he could complete his National Service earlier and start his entrepreneurial journey.
“I believed this was the only way to get out of the poverty cycle – many graduates and degree holders at that time were just earning S$2,000 plus a month,” he recalled. “I wasn’t keen to be a worker or an employee – I saw more potential in running my own business.”
When he turned 21, the opportunity to set up his own catering business emerged, and Neo Garden was established in 1992. The rest, as they say, is history, but it was an uphill struggle. “It takes a lot, a lot of hard work, grit and resilience to stay in business,” he admitted.
Listed on SGX Catalist since July 2012, Neo Group is now an integrated food and beverage company, and one of the most recognised brand names on the Singapore food scene.
Its signature catered dishes range from its famous curry chicken – created from a chilli crab recipe – to nonya laksa, and yam paste with gingko nuts. It has been Singapore’s largest food caterer since 2011, grabbing a 20.5% market share last year, up from 16.8% in 2018. &nbsp;
Seed to Harvest 
 Neo was appointed the Group’s Chairman and Chief Executive Officer in 2012. Today, the Group has scaled and expanded into five business segments – Catering, Manufacturing, Supplies &amp; Trading, Retail and Property. It has a strong portfolio of more than 25 brands under its belt, including Neo Garden, Orange Clove, umisushi, DoDo fish ball and Joo Chiat Kim Choo traditional rice dumplings.
Its food retail network consists of more than 20 outlets islandwide, while its trading network, through its subsidiaries, spans 30 countries. The Group’s operations are supported by its central kitchens, manufacturing facilities, warehouses, and nearly 1,400 employees.
“The past eight years have been electrifying for the Group. Our journey is a testament to our determination – growing from a single seed to full harvest,” said Neo. “And we continue to forge ahead and conquer, with a vision to expand beyond a billion dollars.”
To achieve this goal, Neo Group will continue to focus on its core pillar – catering, which accounts for more than 50% of total revenues. “We will continue to expand our diverse offerings, ranging from eldercare and childcare, to the tingkat delivery market, and white-collar institutional catering,” he said. “Tingkat” refers to multi-tiered tiffin carriers that can pack several food items including soups.
“This diversity has helped us. During Singapore’s Circuit Breaker, our tingkat business – Kim Paradise, the largest in Singapore – has tripled, serving close to 10,000 customers, offsetting the decline in our traditional catering sales,” he pointed out.
“Since then, we have been experiencing a healthy month-on-month growth, following greater awareness of this food delivery service.”
The Group targets to grow its catering division to a total of 30 brands, as it taps on changing consumer behaviours and expands its share of the domestic market to 50%.
The next area of focus is its Food Manufacturing division – under the TS Group – which is the Group’s second-largest revenue driver and Singapore’s No. 1 surimi manufacturer, distributing to more than 30 countries worldwide.
This division will ride on increasing demand from households for home-cooked and ready-to-eat products, as well as leverage on its global distribution network to drive export sales to new and existing markets.
“Our manufacturing capacity in Singapore and Malaysia is only operating at half its capacity,” Neo said.
“We’re exploring options to export products other than surimi, broadening our range through R&amp;D and with overseas partners, as well as introducing new machinery and technology to boost our capacity.”
The Group also wants to broaden its overseas footprint to 50 countries from the current 30, by setting up regional offices in markets like China, Europe and North America. &nbsp;
Pursuing “Oxygen” 
 At the same time, mergers and acquisitions will remain the Group’s “oxygen”, due to the slower, more challenging nature of organic growth, Neo added.
“Over the years, we’ve executed bite-sized acquisitions. This is an area which we will continue to nurture, looking out for bigger companies that can create further synergies.”
Neo Group embarked on an acquisition spree in 2018, raising its stake in its DoDo-branded fish paste products maker, and buying Lavish Dine Catering as well as How’s Catering. Last year, it completed the acquisition of a 49% stake in ER Group, a wholesaler and food processing company that owns warehouses and cold room facilities.
So what is it that sets the Group apart from its peers? Neo points to technology, automation, and its “Go Lean” manufacturing initiative as key differentiators.
“IT sits at the heart of Neo Group, and we’re ahead of the rest of the industry in this respect,” he said.
“Only with technology can we future-proof and scale the business. We began our journey of Industry 4.0, introducing e-invoices, e-payment and paperless initiatives, two years ago, and continue to build on our digital transformation plans, which include artificial intelligence, data analytics and new machinery.”
Its “Go Lean” manufacturing drive, which involves the streamlining of product offerings, enhanced automation and increased production efficiency, have also boosted profit margins.
Diversifying out of food, into property, is another brainchild. “Entering the property business has always been our plan, but it required finding the right partner,” Neo said. “With our acquired businesses now stable and healthy, we’re ready to move forward.”
“We aim to unlock additional and recurring revenue streams through rental and management fees, as well as potential and beneficial synergies with our existing businesses,” he added.
True to character, Neo remains unfazed by challenges that crop up in the Group’s day-to-day operations. Does anything keep him up at night then? “Yes, slow growth,” he admitted. “When things move too slowly!”
Not surprisingly, the 50-year-old father of two wants his children to develop a strong fighting spirit. “I always let my kids try what they want, because I want them to know that the only limitation is yourself. They must never stop learning, because even at this point in my life, I am still picking up new things,” he added.
Neo’s other mantra is lifelong philanthropy, and looking out for others in the community. “Giving is the expressway to success,” he said. “It brings happiness to others, and most importantly, changes our perspective on life.”
“We want to inspire everyone to give back, because progress is never achieved alone – we move forward together – with our staff, our stakeholders, and our community.”
&nbsp;
Neo Group Ltd
Listed on SGX Catalist, Neo Group is a homegrown, integrated food solutions provider. Established since 1992, the Group possesses an award-winning track record and is one of the most recognised brand names in Singapore. The Group has been named the number one events caterer in Singapore and provides one-stop food and catering solutions. It has a vertically integrated value chain across four business segments, namely, Catering, Manufacturing, Supplies and Trading and Retail. Through its subsidiaries, the Group has a trading network spanning more than 30 countries worldwide. Its operations are supported by its central kitchens, manufacturing facilities, warehouses and over 1,400 employees.
The company website is: www.neogroup.com.sg  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the six months ended 30 September 2020 financial results, click&nbsp;here.
&nbsp;
About&nbsp;kopi-C: the Company brew
Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C&nbsp;is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  For previous editions of&nbsp;kopi-C: the Company brew,&nbsp;please click&nbsp;here. &nbsp;  For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to&nbsp;jennifer.t@sgx.com.

Transport Sector, China and Asia-focused Research

Charles De Trenck

Thematic (Sector/Industry)

Another report of potential suitors made it to market on Friday, forcing NOL to disclose there have been talks with French carrier CMA and global leader Maersk. NOL&rsquo;s shares rose some 6% to $1.05 and closer to book NAV per share around&nbsp;S$1.4 (and higher when the US dollar drifts higher). But what would make a potential transaction more interesting, if at all, keeping in mind the Hapag IPO pricing was about 25% below the original high end of the range?

Another report of potential suitors made it to market on Friday, forcing NOL to disclose there have been talks with French carrier CMA and global leader Maersk. NOL&rsquo;s shares rose some 6% to $1.05 and closer to book NAV per share around&nbsp;S$1.4 (and higher when the US dollar drifts higher). But what would make a potential transaction more interesting, if at all, keeping in mind the Hapag IPO pricing was about 25% below the original high end of the range?

NOL's Latest Potential Merger Discussions... Where is the [Partial] Exit for Temasek?

Head of Digital Services at Singapore Post Ltd, Singapore Post Limited

Bernard Leong

Head of Digital Services at Singapore Post Ltd

Singapore Post Limited

How should digital leaders advise businesses? Two ways: target the high and low ends of the market while allowing cannibalisation against their current business model in a controlled pace.&nbsp;The trick lies in capital allocation and separation of the products/services moving towards both ends. Digital products often require high cost of acquisition contrary to perception by businesses that it is cheaper against traditional channels.

How should digital leaders advise businesses? Two ways: target the high and low ends of the market while allowing cannibalisation against their current business model in a controlled pace.&nbsp;The trick lies in capital allocation and separation of the products/services moving towards both ends. Digital products often require high cost of acquisition contrary to perception by businesses that it is cheaper against traditional channels.

Digital disruption bifurcates traditional market segmentation

Singapore

Neo Group Limited is a food catering group. The Group's services include daily meal delivery services, Halal-certified food as well as catering for last minute events or emergency orders.

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Neo Group Ltd (NGL SP)

Neo Group Spices Up New Growth Recipes

For Neo Kah Kiat, founder of SGX-listed food and catering solutions provider Neo Group, dreaming is hard work. The self-made entrepreneur draws...

Singapore Exchange Ltd (SGX)

NOL's Latest Potential Merger Discussions... Where is the [Partial] Exit for Temasek?

Another report of potential suitors made it to market on Friday, forcing NOL to disclose there have been talks with French carrier CMA and global...

Charles De Trenck

Digital disruption bifurcates traditional market segmentation

How should digital leaders advise businesses? Two ways: target the high and low ends of the market while allowing cannibalisation against their...

Bernard Leong

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