Friday, 11 August 2017

Sector Watch: Food and Staples Retailing

Larger Caps

Olam International Limited (O32)

They are a leading agri-business operating from seed to shelf in 70 countries, supplying food and industrial raw materials to over 23,000 customers worldwide. They grow, source, process, manufacture, transport, trade and market 47 different agri-products. Their team of 70,000 full-time, seasonal, contract and temporary employees work to bring essential agricultural products to homes around the globe everyday.

Shares are currently trading at 16.5 times its earnings and 1.0 times its book value. Dividend yield is currently at 3.1% and debt is at 12.9 times its earnings.

Established in 1985 and listed on the Singapore Exchange in 2011, they are one of Singapore’s largest retailers with over S$764 million in revenue for FY2015, and they are principally engaged in operating the Sheng Siong Groceries Chain, in 43 locations all across Singapore as at October 2016.

Shares are currently trading at 21.9 times its earnings and 5.5 times its book value. Dividend yield is currently at 2.0% and the company currently has no debt.

Smaller Caps

Khong Guan Limited (K03)

Khong Guan Limited, an investment holding company, trades in wheat flour and other edible products primarily in Singapore, Malaysia, and China. It operates through three segments: Trading Of Wheat Flour and Consumer Goods, Investment Trading, and Investment holding. The company is involved in the wholesale of wheat flour, general goods, biscuits, consumer goods, and related products, as well as animal feed. In addition, it trades in shares listed in Singapore, Malaysia, and Hong Kong. The company was formerly known as Khong Guan Flour Milling Limited and changed its name to Khong Guan Limited in November 2016. Khong Guan Limited was incorporated in 1960 and is based in Singapore, Singapore.

Shares are currently trading at 85.2 times its earnings and 0.9 times its book value. Dividend yield is currently at 1.4% and the company currently has no debt.

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