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/2022-04/TSH-CEO.jpg" class="editor-image img-responsive"></figure>
<div class="content-caption">TSH-CEO</div>

For auditor-turned-food-and-beverage entrepreneur Chua Khoon Hui, strength and inspiration comes from within. In particular, American author and learning expert Jim Kwik’s famous quote - “Great things always begin from the inside” - resonates deeply with him. “Greater things start from within,” noted Chua, the Chief Executive Officer of SGX-listed whisky and cocktail bar operator TSH Corporation Ltd. “As we are in the people business,&nbsp;I believe that in everything we do, it must begin from inside the organisation and within ourselves.” Chua, a Bachelor of Accountancy graduate from Nanyang Technological University, began his career as an auditor in 1999, before moving into the food and beverage (F&amp;B) industry in 2002. Together with his wife, Ng Pei Wah, he founded Sloshed!&nbsp;- which operates pubs and bars, as well as imports, exports and distributes spirits&nbsp;- in 2005. “After my wife and I ventured into F&amp;B, like all passionate and gung-ho startups, we experienced many failures and learned from them.&nbsp;Perseverance despite difficulties,&nbsp;and learning from our mistakes, were key requirements for us to survive in this industry,” Chua recalled. TSH was formerly a&nbsp;consumer electronics&nbsp;products&nbsp;and homeland security&nbsp;services&nbsp;firm that became a cash company after divesting its operations and assets. In February 2019, it acquired Sloshed! via a reverse takeover. Chua was appointed the Group’s CEO, and his wife&nbsp;is currently the Director of Operations. “In this sector, our business revolves around people, so we believe in people-oriented leadership,” Chua said. “As my wife and I have different characters, we leveraged on each other’s strengths to achieve our goals.&nbsp;With all our suppliers, customers, and colleagues, we apply the same principles of integrity and sincerity. We also strive to empower and develop our colleagues and staff, so as to build a cohesive team that can overcome any challenge.” Today, TSH operates five outlets&nbsp;spanning four brands -&nbsp;Quaich Bar and Signature Reserve, which are whisky-themed - as well as The Other Room&nbsp;and&nbsp;The Other Roof,&nbsp;which focus on cocktails. TSH imports whiskies from boutique distilleries in Scotland, Ireland, South Africa and India, as well as independent bottlers and wholesalers in the UK. It also brings in other spirits, wines and liquors for its outlets. The Group distributes its products on a wholesale basis to other bars, country clubs, hotels, restaurants, corporates and individuals who purchase in bulk. In 2020, it started online retail sales of the whisky brands it carries. Distinctive Offerings However, COVID-19 has dealt a blow to the Group’s vision to expand into an international beverage operator.&nbsp; “The pandemic and national lockdowns have put a brake on our initial overseas expansion plans,” Chua acknowledged.&nbsp;“Our development of a brick-and-mortar service brand has pivoted to a focus on product differentiation through collaborations, as well as investments in whisky casks. This has set the foundation for future expansion plans in our main F&amp;B business.” The restrictions imposed by the Singapore government to curb transmission of COVID-19 during 2020 and 2021 have also crimped revenues, sending TSH into a net loss for the financial years ended 31 December 2020 and 2021. The Group also has to contend with low barriers of entry for the F&amp;B industry, which remain a key risk for its service outlets. Nonetheless, Chua is sanguine about TSH’s longer-term prospects. As a first-mover in the whisky industry in Singapore, the Group has a strong advantage when negotiating with distillers and bottlers, having&nbsp;supported many of them during a time when whisky wasn't yet a popular drink. “The relationships built up over the years have given us access to rare and exclusive brands unavailable to others in the market. By buying direct from the source, we also secure our products at the lowest possible cost,” Chua said. “Currently, we’re developing differentiated products by buying rare and fine whiskies through partnerships with renowned whisky makers.” In 2021, TSH collaborated with renown whisky maker, Frank McHardy, and purchased approximately 50 casks of aged whisky and rum. These investments paved the way for the next phase of expansion for the Group. “We’re constantly exploring opportunities to grow, whether organically, or through joint ventures and strategic alliances,” he added. “As we pivot our strategies to adapt to the new normal, while riding on the robust development of the global whisky industry, we’re confident of expanding our business.” Accelerating Consumption According to a research report by Facts &amp; Factors, the&nbsp;global whisky market&nbsp;was estimated at US$61.7 billion in 2019, and is expected to surge to US$95.9 billion by 2026, reflecting a compound annual growth rate (CAGR) of 6.5% over the period. With rising disposable incomes, and perceived health benefits vis-a-vis other alcoholic beverages - whisky has a high level of antioxidants, no fat and minimum sodium content - analysts expect consumption of this beverage to accelerate in the years ahead. Meanwhile, apart from the day-to-day operations, Chua is also focused on the Group’s Environmental, Social and Governance (ESG) targets.&nbsp; “One of our priorities is human capital - staff attraction and retention, merit-based and non-discriminatory practices, health and safety,” he noted. “Hiring and retention of staff are key challenges for us.&nbsp;We strive to build a conducive and harmonious working environment so that our colleagues are motivated to remain with us, allowing us to train and groom them into successful F&amp;B professionals.” Another key focus for the Group is good governance. “As I’ve mentioned before, our business is a people business, and dealing with all stakeholders with integrity and sincerity has always been an imperative,” he added. And given the myriad challenges faced by the F&amp;B industry, there is much to keep Chua up late at night. “The shifting regulations and changing operating environment, especially for bars in Singapore, is a major concern,” he admitted.&nbsp; “These changes are beyond our control, and&nbsp;we need to be constantly on our toes, staying nimble and agile.&nbsp;&nbsp;As we are a people business dependent on talent, simply cutting manpower costs is not an option.” At the end of the day, many obstacles notwithstanding, this 47-year-old father of&nbsp;a teenage son remains inspired by the rigours and discipline of the whisky industry. “The reason my wife and I ventured into this industry more than 15 years ago is because of the passion of the people behind the craft - and that comes through in each and every bottle,” Chua noted. “It’s not something you can make today and enjoy tomorrow.&nbsp;The youngest whisky is three years old, and most are much, much older.&nbsp; It takes a person with passion, perseverance and vision to start a whisky distillery.&nbsp;Therein lies the essence of the human spirit.”&nbsp; TSH Corporation Ltd TSH operates five outlets&nbsp;spanning four brands -&nbsp;Quaich Bar and Signature Reserve, which are whisky-themed - as well as The Other Room&nbsp;and&nbsp;The Other Roof,&nbsp;which focus on cocktails. The Group imports whiskies from boutique distilleries in Scotland, Ireland, South Africa and India, as well as independent bottlers and wholesalers in the UK. It also brings in other spirits, wines and liquors for its outlets. The Group distributes its products on a wholesale basis to other bars, country clubs, hotels, restaurants, corporates and individuals who purchase in bulk. In 2020, it started online retail sales of the whisky brands it carries. The company website is: <a href="https://tshcorp.com.sg/" target="_blank" rel="noopener">tshcorp.com.sg</a> Click&nbsp;<a href="https://www.sgx.com/securities/equities/KUH" target="_blank" rel="noopener">here&nbsp;</a>for the company's StockFacts page. For the year ended 31 December 2021 financial results, click&nbsp;<a href="https://links.sgx.com/1.0.0/corporate-announcements/P1V81QOVTYBVL724/705639_TSH%20Results%20Announcement%20FY21%2028Feb22%20R1.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&nbsp;<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.sgx.com/jennifer.t@sgx.com" target="_blank" rel="noopener">jennifer.t@sgx.com</a>.


TSH-CEO

For auditor-turned-food-and-beverage entrepreneur Chua Khoon Hui, strength and inspiration comes from within. In particular, American author and learning expert Jim Kwik’s famous quote - “Great things always begin from the inside” - resonates deeply with him.  “Greater things start from within,” noted Chua, the Chief Executive Officer of SGX-listed whisky and cocktail bar operator TSH Corporation Ltd. “As we are in the people business,&nbsp;I believe that in everything we do, it must begin from inside the organisation and within ourselves.”  Chua, a Bachelor of Accountancy graduate from Nanyang Technological University, began his career as an auditor in 1999, before moving into the food and beverage (F&amp;B) industry in 2002. Together with his wife, Ng Pei Wah, he founded Sloshed!&nbsp;- which operates pubs and bars, as well as imports, exports and distributes spirits&nbsp;- in 2005.  “After my wife and I ventured into F&amp;B, like all passionate and gung-ho startups, we experienced many failures and learned from them.&nbsp;Perseverance despite difficulties,&nbsp;and learning from our mistakes, were key requirements for us to survive in this industry,” Chua recalled.  TSH was formerly a&nbsp;consumer electronics&nbsp;products&nbsp;and homeland security&nbsp;services&nbsp;firm that became a cash company after divesting its operations and assets. In February 2019, it acquired Sloshed! via a reverse takeover. Chua was appointed the Group’s CEO, and his wife&nbsp;is currently the Director of Operations.  “In this sector, our business revolves around people, so we believe in people-oriented leadership,” Chua said.  “As my wife and I have different characters, we leveraged on each other’s strengths to achieve our goals.&nbsp;With all our suppliers, customers, and colleagues, we apply the same principles of integrity and sincerity. We also strive to empower and develop our colleagues and staff, so as to build a cohesive team that can overcome any challenge.”  Today, TSH operates five outlets&nbsp;spanning four brands -&nbsp;Quaich Bar and Signature Reserve, which are whisky-themed - as well as The Other Room&nbsp;and&nbsp;The Other Roof,&nbsp;which focus on cocktails.  TSH imports whiskies from boutique distilleries in Scotland, Ireland, South Africa and India, as well as independent bottlers and wholesalers in the UK. It also brings in other spirits, wines and liquors for its outlets. The Group distributes its products on a wholesale basis to other bars, country clubs, hotels, restaurants, corporates and individuals who purchase in bulk. In 2020, it started online retail sales of the whisky brands it carries.  Distinctive Offerings  However, COVID-19 has dealt a blow to the Group’s vision to expand into an international beverage operator.&nbsp;  “The pandemic and national lockdowns have put a brake on our initial overseas expansion plans,” Chua acknowledged.&nbsp;“Our development of a brick-and-mortar service brand has pivoted to a focus on product differentiation through collaborations, as well as investments in whisky casks. This has set the foundation for future expansion plans in our main F&amp;B business.”  The restrictions imposed by the Singapore government to curb transmission of COVID-19 during 2020 and 2021 have also crimped revenues, sending TSH into a net loss for the financial years ended 31 December 2020 and 2021. The Group also has to contend with low barriers of entry for the F&amp;B industry, which remain a key risk for its service outlets.  Nonetheless, Chua is sanguine about TSH’s longer-term prospects. As a first-mover in the whisky industry in Singapore, the Group has a strong advantage when negotiating with distillers and bottlers, having&nbsp;supported many of them during a time when whisky wasn't yet a popular drink.  “The relationships built up over the years have given us access to rare and exclusive brands unavailable to others in the market. By buying direct from the source, we also secure our products at the lowest possible cost,” Chua said.  “Currently, we’re developing differentiated products by buying rare and fine whiskies through partnerships with renowned whisky makers.”  In 2021, TSH collaborated with renown whisky maker, Frank McHardy, and purchased approximately 50 casks of aged whisky and rum. These investments paved the way for the next phase of expansion for the Group.  “We’re constantly exploring opportunities to grow, whether organically, or through joint ventures and strategic alliances,” he added. “As we pivot our strategies to adapt to the new normal, while riding on the robust development of the global whisky industry, we’re confident of expanding our business.”  Accelerating Consumption  According to a research report by Facts &amp; Factors, the&nbsp;global whisky market&nbsp;was estimated at US$61.7 billion in 2019, and is expected to surge to US$95.9 billion by 2026, reflecting a compound annual growth rate (CAGR) of 6.5% over the period.  With rising disposable incomes, and perceived health benefits vis-a-vis other alcoholic beverages - whisky has a high level of antioxidants, no fat and minimum sodium content - analysts expect consumption of this beverage to accelerate in the years ahead.  Meanwhile, apart from the day-to-day operations, Chua is also focused on the Group’s Environmental, Social and Governance (ESG) targets.&nbsp;  “One of our priorities is human capital - staff attraction and retention, merit-based and non-discriminatory practices, health and safety,” he noted.  “Hiring and retention of staff are key challenges for us.&nbsp;We strive to build a conducive and harmonious working environment so that our colleagues are motivated to remain with us, allowing us to train and groom them into successful F&amp;B professionals.”  Another key focus for the Group is good governance. “As I’ve mentioned before, our business is a people business, and dealing with all stakeholders with integrity and sincerity has always been an imperative,” he added.  And given the myriad challenges faced by the F&amp;B industry, there is much to keep Chua up late at night.  “The shifting regulations and changing operating environment, especially for bars in Singapore, is a major concern,” he admitted.&nbsp;  “These changes are beyond our control, and&nbsp;we need to be constantly on our toes, staying nimble and agile.&nbsp;&nbsp;As we are a people business dependent on talent, simply cutting manpower costs is not an option.”  At the end of the day, many obstacles notwithstanding, this 47-year-old father of&nbsp;a teenage son remains inspired by the rigours and discipline of the whisky industry.  “The reason my wife and I ventured into this industry more than 15 years ago is because of the passion of the people behind the craft - and that comes through in each and every bottle,” Chua noted.  “It’s not something you can make today and enjoy tomorrow.&nbsp;The youngest whisky is three years old, and most are much, much older.&nbsp; It takes a person with passion, perseverance and vision to start a whisky distillery.&nbsp;Therein lies the essence of the human spirit.”&nbsp;   TSH Corporation Ltd  TSH operates five outlets&nbsp;spanning four brands -&nbsp;Quaich Bar and Signature Reserve, which are whisky-themed - as well as The Other Room&nbsp;and&nbsp;The Other Roof,&nbsp;which focus on cocktails. The Group imports whiskies from boutique distilleries in Scotland, Ireland, South Africa and India, as well as independent bottlers and wholesalers in the UK. It also brings in other spirits, wines and liquors for its outlets. The Group distributes its products on a wholesale basis to other bars, country clubs, hotels, restaurants, corporates and individuals who purchase in bulk. In 2020, it started online retail sales of the whisky brands it carries.  The company website is: tshcorp.com.sg  Click&nbsp;here&nbsp;for the company's StockFacts page.  For the year ended 31 December 2021 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.

TSH Takes A Shot at Booming Whisky Market

Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
Singapore Company Update
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<h2>Tuan Sing Holdings Bloomberg: TSH SP&nbsp;</h2>
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<h3>Making a case</h3>
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Investment Thesis: Undervalued property play. We maintain our BUY call and TP of S$0.44. Trading at 0.3x P/NAV (between -1SD and -2SD from 3- year mean), we continue to see good value in the stock. In addition, office fundamentals favour a completion of the S$500m sale of Robinson Point which could drive a re-rating in valuation following improved balance sheet metrics.
<div>
Transformation into partial tech play. GulTech’s earnings have grown by a CAGR of 26% in the past five years and may be ripe for unlocking through dividends to Tuan Sing.
Resilient property market. The Singapore private property market has held up well amid the pandemic, a successful sales launch of Peak Residences could catalyse share price.
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<div>
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Valuation: Our TP of S$0.44 is based on SOTP. We assume a valuation of 11.0x FY20F PE for Gultech, a 65% discount to RNAV of S$676.8m, and a further 10% conglomerate discount. The TP represents a P/BV of 0.47x compared to the current P/BV of 0.31x (-1SD below 3-year mean of 0.42x) and peer P/BV of 0.46x.
Where we differ: We are the only house covering the counter. That said, we have assumed more conservative earnings growth for GulTech.
</div>
</div>
</div>
</div>
</div>
</div>
</div>

Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
Singapore Company Update

Tuan Sing Holdings Bloomberg: TSH SP&nbsp;

Making a case


Investment Thesis: Undervalued property play. We maintain our BUY call and TP of S$0.44. Trading at 0.3x P/NAV (between -1SD and -2SD from 3- year mean), we continue to see good value in the stock. In addition, office fundamentals favour a completion of the S$500m sale of Robinson Point which could drive a re-rating in valuation following improved balance sheet metrics.

Transformation into partial tech play. GulTech’s earnings have grown by a CAGR of 26% in the past five years and may be ripe for unlocking through dividends to Tuan Sing.
Resilient property market. The Singapore private property market has held up well amid the pandemic, a successful sales launch of Peak Residences could catalyse share price.



Valuation: Our TP of S$0.44 is based on SOTP. We assume a valuation of 11.0x FY20F PE for Gultech, a 65% discount to RNAV of S$676.8m, and a further 10% conglomerate discount. The TP represents a P/BV of 0.47x compared to the current P/BV of 0.31x (-1SD below 3-year mean of 0.42x) and peer P/BV of 0.46x.
Where we differ: We are the only house covering the counter. That said, we have assumed more conservative earnings growth for GulTech.








Non-SGX Report: Tuan Sing Holdings Bloomberg: Making a Case

Singapore

TSH Corporation Ltd is in the business of recycling of ordnance, pyrotechnics display, homeland security services, as well as designing and manufacturing consumer electronics products such as EBooks, mobile Internet devices and photo scanners. The Company has operations in Singapore, Taipei and Hangzhou.

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TSH Corporation (TSHC SP)

TSH Takes A Shot at Booming Whisky Market

For auditor-turned-food-and-beverage entrepreneur Chua Khoon Hui, strength and inspiration comes from within. In particular, American author and...

Singapore Exchange Ltd (SGX)

Non-SGX Report: Tuan Sing Holdings Bloomberg: Making a Case

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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