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

Credit: University of Exeter

Select Group Limited (SGX: 5FQ) saw its shares slump a huge 11.6% since last Friday to end this week at S$0.42. This is way worse than the decline of 1.5% seen in the broader market, as represented by the Straits Times Index  (SGX: ^STI). It thus makes Select Group a big loser in the local stock market this week.

As a food and beverage (F&B) outfit, Select has businesses in Chinese fine dining, events catering, and quick service restaurants, among others. Brands under its umbrella include Peach GardenStamford Catering ServicesTexas ChickenChinatown Food Street, and many more. Some of the company’s competitors are Neo Group Ltd (SGX: 5UJ) and ABR Holdings Limited (SGX: 533).

On Monday, Select Group announced that it has entered into a 60-40 joint venture (JV) agreement with M .W Metropolitan International Brands Co., Ltd (MWM), a company incorporated in Cambodia.

The aim of the JV is to explore suitable food retail and food court locations in the Southeast Asian country. Select Group added that the latest move is in line with its intention to grow by expanding overseas.

In a month or two, Select will set up the JV with a combined paid-up capital of US$300,000.

The announcement did not elaborate on where the capital would come from. But Select Group shouldn’t have a problem at all in funding the JV using internal resources. As of end-June this year, the company had close to S$14 million in cash. The company said that it “will provide updates as and when there are material developments” regarding the JV.

Select Group is now valued at 8 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.