Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on changes — just in case they’re material to our investing thesis. With 18 out of its 30 constituents losing ground and only seven having made some gains, the Straits Times Index (SGX: ^STI) was dragged down by 0.3% to 3,294 points today. Although the blue chips weren’t having the best of days as a collective, shares outside the index had managed to do pretty well. Let’s take a look at some of them. Supermarket operator Sheng Siong Group…
With 18 out of its 30 constituents losing ground and only seven having made some gains, the Straits Times Index (SGX: ^STI) was dragged down by 0.3% to 3,294 points today.
Although the blue chips weren’t having the best of days as a collective, shares outside the index had managed to do pretty well. Let’s take a look at some of them.
Supermarket operator Sheng Siong Group (SGX: OV8) rose 2.4% to S$0.645 after announcing yesterday its plans to purchase a three-storey Housing Development Board warehouse for S$65 million. The acquisition needs to pass through a few hoops first (such as obtaining regulatory approval from the HDB) before it’s a done deal.
Sheng Siong feels that the property would allow it “to establish a presence in Tampines, a large potential market in Singapore.”
The company also mentioned that it had done a sizeable amount of background work in scouting other locations before picking said property. Initial plans for the property would see Sheng Siong open a new 910 square metres Sheng Siong outlet in the first quarter of 2015. The supermarket outfit would then gradually expand the land area of the outlet as and when the leases of existing tenants in the property expire.
Sheng Siong’s latest finances show it having S$112 million worth of cash on its balance sheet while carrying zero debt. As a result, it’s unlikely that Sheng Siong’s finances would be overstretched even after coughing up S$65 million for the acquisition.
Del Monte Pacific (SGX: D03) gained 1.7% to S$0.585. The company revealed yesterday that its latest quarterly results for the three months ended April 2014 would be announced on Thursday, 12 June 2014.
Earlier this May, the vegetable and fruits processor had released a warning that it “expects to report a net loss” in the upcoming earnings report. In February this year, Del Monte Pacific had completed the acquisition of the consumer food business outfit, Del Monte Foods, for US$1.675 billion. There were a number of one-off expenses related to the purchase that Del Monte Pacific had to log in its upcoming earnings release, hence the loss.
Fertiliser and chemicals manufacturer China XLX Fertiliser (SGX: B9R) is up by 1.3% to S$0.39. Last week, the company released its results for the first quarter of 2014 and saw quarterly revenue jump 26.3% year-on-year to RMB1.27 billion. Unfortunately, its bottom-line had shrunk by more than half from RMB112 million to RMB48.2 million.
The company had suffered a contraction in gross margin from 22.9% to 17.4%, resulting in a 4.1% decline in gross profit to RMB221 million. Big increases in other expenses like interest expenses and salaries had placed lots of pressure on China XLX Fertiliser’s bottom-line.
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