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.

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RE&S Holdings – Operator of Japanese F&B Outlets Debuts on SGX

Equity Long/Short Analyst. Ex-China Property IR

Viki W.K. Li

Equity Bottom-Up

Dairy Farm International Holdings / Equity Bottom-Up

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange rates and underlying net profit was up 6%. Dividend payout remained stable. But when we dig deeper, it is much worse than you think: this slight headline miss hides the fact that a dividend cut is inevitable. The Company has dramatically increased its net debt/equity position to 43% net debt/equity (FY16) from 50% net cash/equity (FY13), as core business have fallen and capex has risen. Sales of its core business -- supermarkets -- dropped 3% and operating profit fell 20%. The following shows how cashflow is rapidly deteriorating, and the real competition has barely even started: Tmall and Amazon.

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange rates and underlying net profit was up 6%. Dividend payout remained stable. But when we dig deeper, it is much worse than you think: this slight headline miss hides the fact that a dividend cut is inevitable. The Company has dramatically increased its net debt/equity position to 43% net debt/equity (FY16) from 50% net cash/equity (FY13), as core business have fallen and capex has risen. Sales of its core business -- supermarkets -- dropped 3% and operating profit fell 20%. The following shows how cashflow is rapidly deteriorating, and the real competition has barely even started: Tmall and Amazon.

Not Just a Minor Miss: A Dividend Cut Is Inevitable.

<div class="content-highlight">Complacency makes Dairy Farm a perfect short</div><a href="https://www.smartkarma.com/entities/7427" target="_blank" data-smartkarma-citation="entities:7427:1">Dairy Farm Intl Hldgs Ltd (DFI SP)</a> has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Dairy Farm International: Who Moved My Cheese?

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Thematic (Sector/Industry)

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of Indonesia's most successful e-commerce players, with around 30m active SKUs and 10m monthly users. In this week's insights, our own <a href="https://www.smartkarma.com/profiles/9" target="_blank" data-smartkarma-citation="accounts:9">Ke Yan, CFA, FRM</a> looks at <a href="https://www.smartkarma.com/entities/1087" target="_blank" data-smartkarma-citation="entities:1087:1">Sembcorp Industries Ltd (SCI SP)</a> and sees the stub as being overvalued. <a href="https://www.smartkarma.com/profiles/766" target="_blank" data-smartkarma-citation="accounts:766">Athaporn Arayasantiparb, CFA</a> reveals his <a href="https://www.smartkarma.com/insights/five-big-ideas-for-the-next-five-years" target="_blank" data-smartkarma-citation="insights:8457">Five Big Ideas for the Next Five Years</a> and he also looks at the beneficiaries from…

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of Indonesia's most successful e-commerce players, with around 30m active SKUs and 10m monthly users. In this week's insights, our own Ke Yan, CFA, FRM looks at Sembcorp Industries Ltd (SCI SP) and sees the stub as being overvalued. Athaporn Arayasantiparb, CFA reveals his Five Big Ideas for the Next Five Years and he also looks at the beneficiaries from…

The Week that Was in ASEAN@Smartkarma - Big Ideas, Schools and Department Stores

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

In this piece, we continue part 2 of the article written by <a href="https://www.smartkarma.com/profiles/605" target="_blank" data-smartkarma-citation="accounts:605">Daniel Hellberg</a> as part of our collaboration piece: #Then &amp; Now: Online Grocery delivery in the US &amp; SEA. Here, we examine the size of Southeast Asia's supermarket and online grocery delivery landscape, the startups in the space, and what the incumbents are doing amidst increasing competition. We attempt to answer the following questions:1. What has changed for grocery startups?2. How big is the online grocery market size in Southeast Asia?3. Which are the startups focused on the grocery space?4. What are the incumbents' responses?5. Who are the likely winners of tomorrow?

In this piece, we continue part 2 of the article written by Daniel Hellberg as part of our collaboration piece: #Then &amp; Now: Online Grocery delivery in the US &amp; SEA. Here, we examine the size of Southeast Asia's supermarket and online grocery delivery landscape, the startups in the space, and what the incumbents are doing amidst increasing competition. We attempt to answer the following questions:1. What has changed for grocery startups?2. How big is the online grocery market size in Southeast Asia?3. Which are the startups focused on the grocery space?4. What are the incumbents' responses?5. Who are the likely winners of tomorrow? 

Then & Now: Online Grocery Delivery in the US & SE Asia (Part 2 of 2)

Singapore

Envictus International Holdings Limited manufactures and distributes sweetened condensed milk and evaporated milk. The Company also repacks and distributes complementary products such as full cream and instant high calcium non-fat milk powder, instant coffee powder, and tea dust.

Khong Guan Flour Milling Limited is an investment holding company, The Company trades wheat flour and other edible products. Through its subsidiaries, Khong Guan also trades raw and processed commodities, biscuits, snacks, and investments.

Hosen Group Ltd distributes fast moving consumer goods (FMCGs) under its house brands as well as under third party leading brands.  The Company has its own lines of canned fruits, vegetables, seafood, meat products and beverages.

Olam Group Ltd operates as a food and agri-business company. The Company supplies food ingredients, feed, fibre, and edible oil. Olam Group serves customers worldwide.

Through our purpose to ‘Re-imagine Global Agriculture and Food Systems’, Olam aims to address the many challenges involved in meeting the needs of a growing global population, while achieving positive impact for farming communities, our planet and all our stakeholders. 

Headquartered and listed in Singapore, Olam currently ranks among the top 30 largest primary listed companies in terms of market capitalisation on SGX-ST.

More information on Olam can be found at www.olamgroup.com. 
	 	 
Olam is located at 7 Straits View, Marina One East Tower #20-01, Singapore 018936. Telephone: +65 63394100, Facsimile: +65 63399755.

Fraser and Neave Limited is principally engaged in the food and beverage, and printing and publishing business. The Company's principal activities include the production and sale of beverages, which includes soft drinks, beer, stout, and dairy products; and printing and publishing.

Established in 1992 and listed on the Singapore Exchange since 2007, First Resources is one of the leading palm oil producers in the region, managing over 200,000 hectares of oil palm plantations across the Riau, East Kalimantan and West Kalimantan provinces of Indonesia.

Our core business activities include cultivating oil palms, harvesting the fresh fruit bunches (FFB) and milling them into crude palm oil (CPO) and palm kernel (PK). In addition to plantations and palm oil mills, the Group through its refinery, fractionation, biodiesel and kernel crushing plants, processes its CPO and PK production into higher value palm-based products such as biodiesel, refined, bleached and deodorised (RBD) olein and RBD stearin, palm kernel oil and palm kernel expeller. This enables the Group to extract maximum value out of our upstream plantation assets. Our products are sold to both local and international markets.

First Resources is committed to the production of sustainable palm oil. Our sustainability strategy is centred upon maximising output while minimising the adverse environmental and social impact from our operations. We will constantly strengthen our sustainability framework through regular benchmarking against industry standards and best practices.

Dairy Farm International Holdings Limited and its subsidiaries operate retail stores such as supermarkets, drugstores, and convenience stores in Hong Kong, Taiwan, China, Singapore, Malaysia, Indonesia, India.

Dairy Farm International Holdings (DFI SP)

Del Monte Pacific Limited produces and markets packaged vegetable and fruit, beverage and culinary products. The Group has the exclusive right to use the Del Monte brand for packaged products in the USA, South America, Philippines, the Indian subcontinent and Myanmar, and the S&W brand for both packaged and fresh products globally except Australia and New Zealand.

Bumitama Agri is a leading producer of crude palm oil and palm kernel in Indonesia. The Group is principally engaged in the cultivation of oil palm trees, as well as the harvesting and processing of fresh palm fruit bunches into CPO and PK. It was founded in 1996 and listed on the Singapore Exchange in 2012. 

Past extensification efforts, combined with continuous improvement in production processes, have bolstered Bumitama’s FFB (internally sourced) and CPO production volumes to climb significantly over the last ten years, with a CAGR of 11.8%. The Group has consistently stayed on the path towards achieving higher yields and extraction rates by investing in research and development, technology, and best practices in cultivation of oil palm. These efforts have made the Group one of the most efficient producers in the industry today, boasting a CPO yield of 4.2 tonnes per ha in 2021.

In recognition of its operations’ superiority, the Group has received numerous accolades which include having listed as Forbes Asia’s 200 Best Under a Billion 2013, earned Frost & Sullivan Indonesia’s Excellence Award in 2014, and obtained the Best Managed Small Cap Company in 2016 and the Most Outstanding Company in Singapore for the Decade (2010-2019) in 2019 from Asiamoney.

Golden Agri-Resources Limited cultivates, harvests, processes, distributes, and sells crude palm oil and palm kernel.  The Company also refines crude palm oil into cooking oil, margarine, and shortening for sale and distribution.

Sun Art Retail Group Ltd. operates hypermarkets.  The Company retails food and offers amenities such as restaurants, automated teller machines, pharmacies and dry cleaners.

Chefs' Warehouse Inc. is a premier distributor of specialty food products in the United States. The Company is focused on serving the specific needs of chefs who own and/or operate restaurants, fine dining establishments, country clubs, hotels, caterers, culinary schools and specialty food stores.

GS Retail Co., Ltd. operates a chain of retail stores. The Company provides beauty and skincare products, candles, gifts, perfumes, ornaments, bathroom accessories, and other products. GS Retail serves its customers in the Republic of South Korea.

The Andersons, Inc. merchandises grain, operates grain elevator facilities, distributes wholesale agricultural fertilizer, and distributes agricultural inputs to dealers and farmers.  The Company also manufactures lawn fertilizer and corncob-based products, and purchases, sells, repairs, and leases railcars. In addition, The Andersons operates retail stores and a distribution center.

Weis Markets, Inc. operates retail food markets in Pennsylvania, Maryland, New Jersey, New York, Virginia, and West Virginia. The Company also operates the SuperPetz pet supply chain of stores.

Ingles Markets, Incorporated operates a supermarket chain in the southeastern United States.  The Company also owns and operates neighborhood shopping centers.

CREATE SD HOLDINGS Co Ltd operates a chain of drug stores based in Kanagawa. The Company sells medical supplies, cosmetics, foodstuff, baby products and daily goods. CREATE SD HOLDINGS also sells prescription medicine.

Mitsubishi Shokuhin Co.,Ltd. is a wholesaler of processed food. The Company sells a varietyof groceries including canned products, dried food, frozen food, pet food, beverages, and liquors.

Casino Guichard-Perrachon SA operates a wide range of hypermarkets, supermarkets, and  convenience stores.  The Company operates in Asia and Europe.

Metro AG operates retail stores and markets products over the Internet.  The Company operates cash and carry stores, supermarkets and hypermarkets, consumer electronics stores, department stores, theme stores, and online sales services.

Sheng Siong Group Ltd is a retailer in Singapore.  The Company operates a groceries chain across Singapore. Sheng Siong's stores provide fresh and chilled produce, seafood, meat and vegetables, processed, packaged and preserved food products as well as general merchandise such as toiletries and essential household items.

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Sheng Siong (SSG SP)

RE&S Holdings – Operator of Japanese F&B Outlets Debuts on SGX

Singapore Exchange Ltd (SGX)

Not Just a Minor Miss: A Dividend Cut Is Inevitable.

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange...

Viki W.K. Li

Dairy Farm International: Who Moved My Cheese?

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s...

Viki W.K. Li

The Week that Was in ASEAN@Smartkarma - Big Ideas, Schools and Department Stores

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of...

Angus Mackintosh

Then & Now: Online Grocery Delivery in the US & SE Asia (Part 2 of 2)

In this piece, we continue part 2 of the article written by Daniel Hellberg as part of our collaboration piece: #Then & Now: Online Grocery...

Valerie Law, CFA

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