Singapore’s Best Retail Shares

shoppingInvestors have had it good over the past year, despite the recent correction in the market, as the Straits Times Index (SGX: ^STI) has gained 11.9% to 3,161 since last June. That’s a nice return for a year of investing but for investors in the retail space, they would have had an even better year – the only exception being fashion retailer FJ Benjamin Holdings (SGX: F10), which suffered a 20.6% decline on the back of shrinking quarterly profits as reduced consumer spending in China and Hong Kong hurt the company’s operations.

Putting FJ Benjamin aside, let’s take a look at three of the best performers among the retailers, starting with Osim International (SGX: O23), whose shares have grown by 68% over the past year. Consumers might only be familiar with the company’s massage chairs but it also has interests in luxury tea (under the TWG Tea banner), nutritional supplements (under the GNC and Richlife brands) and lifestyle products (under the Brookstone stores). Osim had a good 2012 where net income grew by 26% to a record of S$86.9m on the back of better productivity as the company went about culling non-performing retail stores.

In more recent news, the company announced a 13% increase in quarterly profit to S$25.1m last month. Management also stated their intention to increase the store count of their flagship OSIM outlets by 30 to 40 from its existing base of 596 around the globe. At its current price of $1.945, shares of OSIM are valued at 16 times historical earnings and fetch a dividend yield of 3.1%.

Next up, we have a supermarket retailer that shoppers might be familiar with, Sheng Siong Group (SGX: OV8). Its shares have gained 52.3% over the past year to $0.65 as profits for 2012 jumped by 53% to S$41.7m. The company floated on the Mainboard stock exchange on August 2011 at S$0.33 a share, so IPO-investors would have been very happy with the results so far.

Prior to the public offering, Sheng Siong operated 23 stores across the island and has since increased its store-count to 33. The company’s first quarter results announcement in April saw profits increase by 31% to S$10.5m after stripping away one-time gains from the sale of an old warehouse from 2012’s first quarter results.  Shares of Sheng Siong are currently priced at 25 times its last twelve months’ earnings with a dividend yield of 4.2%

Last on the list is luxury watch retailer The Hour Glass Limited (SGX: E5P). The company’s recent full-year earnings results released last month saw a 1% decline in top-line to S$601.9m and a 3% drop in profit to S$52.8m. Management cited “deteriorating consumer spending patterns” as a reason for the contraction in sales. Despite that, its shares have appreciated by 44.8% since last June to $1.81.

To boost Hour Glass’s corporate performance for the future, the company has begun to broaden its operations beyond the sale of luxury watches by bringing luxury pastries, gifts and beauty products from French company Ladurée to Singapore since April this year. Investors can also look forward to the opening of two new monobrand watch boutiques in Singapore featuring Parmigiani Fleurier and Ulysse Nardin in the near future. Shares of the company carry a Price-Earnings multiple of 8 and a dividend yield of 3%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.