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Singapore’s Big Loser for the Week: Select Group Limited

Select Group Limited (SGX: 5FQ) slumped close to 10% since last Friday to end this week at S$0.42. With Singapore’s stock market benchmark the Straits Times Index (SGX: ^STI) only down by 1.6% during the same period, this makes Select Group one of the big losers in our share market for the week.

The firm is a food service provider which in which has businesses in Chinese fine dining, events catering, and quick service restaurants, among others. Brands under Select Group’s stable include Peach GardenStamford Catering ServicesTexas ChickenLerk Thai, and many more.

With its food & beverage (F&B) businesses, the company’s competitors include Neo Group Ltd (SGX: 5UJ) and ABR Holdings Limited  (SGX: 533).

At present, Select Group operates predominantly in Singapore. But, it has not been sitting on its laurels and has also sought to broaden its reach overseas. In its 2013 Annual Report, the firm mentioned the following:

“Apart from expanding locally, we also have intention for overseas expansion. In 2012, we participated in the convention organised by Franchising and Licensing Association Singapore. Since then, we have received many enquiries from overseas visitors, and are in discussion for an oversea partnership to grow the Sheng Kee and Hill Street Coffeeshop brand in Malaysia in 2014.”

Keeping true to its promise, Select Group announced on 13 March this year that it will be leasing a total of three retail units at Empire City in Kuala Lumpur, Malaysia, to transform them into a food court, a Sheng Kee Dessert outlet, and a Hill Street Coffee Shop stall.

The total cost will be around S$2.8 million and will be funded with the company’s internal resources. The leases are expected to be signed in the second half of this year.

The firm is currently trading at 10 times its historical earnings.

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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 Sudhan P doesn’t own shares in any companies mentioned.