SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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RE&S Holdings – Operator of Japanese F&B Outlets Debuts on SGX

Equity Long/Short Analyst. Ex-China Property IR

Viki W.K. Li

Equity Bottom-Up

DFI Retail Group Holdings / Equity Bottom-Up

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange rates and underlying net profit was up 6%. Dividend payout remained stable. But when we dig deeper, it is much worse than you think: this slight headline miss hides the fact that a dividend cut is inevitable. The Company has dramatically increased its net debt/equity position to 43% net debt/equity (FY16) from 50% net cash/equity (FY13), as core business have fallen and capex has risen. Sales of its core business -- supermarkets -- dropped 3% and operating profit fell 20%. The following shows how cashflow is rapidly deteriorating, and the real competition has barely even started: Tmall and Amazon.

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange rates and underlying net profit was up 6%. Dividend payout remained stable. But when we dig deeper, it is much worse than you think: this slight headline miss hides the fact that a dividend cut is inevitable. The Company has dramatically increased its net debt/equity position to 43% net debt/equity (FY16) from 50% net cash/equity (FY13), as core business have fallen and capex has risen. Sales of its core business -- supermarkets -- dropped 3% and operating profit fell 20%. The following shows how cashflow is rapidly deteriorating, and the real competition has barely even started: Tmall and Amazon.

Not Just a Minor Miss: A Dividend Cut Is Inevitable.

<div class="content-highlight">Complacency makes Dairy Farm a perfect short</div><a href="https://www.smartkarma.com/entities/7427" target="_blank" data-smartkarma-citation="entities:7427:1">Dairy Farm Intl Hldgs Ltd (DFI SP)</a> has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s supermarket/hypermarket and personal health/beauty product industries for years. Complacency led to a slow reaction to consumer behaviour changes and loss of market share to local competitors in the past few years. Now, that complacency will show them unprepared for Amazon and Alibaba's arrival!Dairy Farm’s Hong Kong and Singapore businesses are about to see impending e-commerce disruption that will cause sales declines and margin erosion for years to come.Separately, on 23 June, the Company announced the change of Group Chief Executive.

Dairy Farm International: Who Moved My Cheese?

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Thematic (Sector/Industry)

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of Indonesia's most successful e-commerce players, with around 30m active SKUs and 10m monthly users. In this week's insights, our own <a href="https://www.smartkarma.com/profiles/9" target="_blank" data-smartkarma-citation="accounts:9">Ke Yan, CFA, FRM</a> looks at <a href="https://www.smartkarma.com/entities/1087" target="_blank" data-smartkarma-citation="entities:1087:1">Sembcorp Industries Ltd (SCI SP)</a> and sees the stub as being overvalued. <a href="https://www.smartkarma.com/profiles/766" target="_blank" data-smartkarma-citation="accounts:766">Athaporn Arayasantiparb, CFA</a> reveals his <a href="https://www.smartkarma.com/insights/five-big-ideas-for-the-next-five-years" target="_blank" data-smartkarma-citation="insights:8457">Five Big Ideas for the Next Five Years</a> and he also looks at the beneficiaries from…

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of Indonesia's most successful e-commerce players, with around 30m active SKUs and 10m monthly users. In this week's insights, our own Ke Yan, CFA, FRM looks at Sembcorp Industries Ltd (SCI SP) and sees the stub as being overvalued. Athaporn Arayasantiparb, CFA reveals his Five Big Ideas for the Next Five Years and he also looks at the beneficiaries from…

The Week that Was in ASEAN@Smartkarma - Big Ideas, Schools and Department Stores

Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

In this piece, we continue part 2 of the article written by <a href="https://www.smartkarma.com/profiles/605" target="_blank" data-smartkarma-citation="accounts:605">Daniel Hellberg</a> as part of our collaboration piece: #Then &amp; Now: Online Grocery delivery in the US &amp; SEA. Here, we examine the size of Southeast Asia's supermarket and online grocery delivery landscape, the startups in the space, and what the incumbents are doing amidst increasing competition. We attempt to answer the following questions:1. What has changed for grocery startups?2. How big is the online grocery market size in Southeast Asia?3. Which are the startups focused on the grocery space?4. What are the incumbents' responses?5. Who are the likely winners of tomorrow?

In this piece, we continue part 2 of the article written by Daniel Hellberg as part of our collaboration piece: #Then &amp; Now: Online Grocery delivery in the US &amp; SEA. Here, we examine the size of Southeast Asia's supermarket and online grocery delivery landscape, the startups in the space, and what the incumbents are doing amidst increasing competition. We attempt to answer the following questions:1. What has changed for grocery startups?2. How big is the online grocery market size in Southeast Asia?3. Which are the startups focused on the grocery space?4. What are the incumbents' responses?5. Who are the likely winners of tomorrow? 

Then & Now: Online Grocery Delivery in the US & SE Asia (Part 2 of 2)

Singapore

Sheng Siong Group Ltd is a retailer in Singapore.  The Company operates a groceries chain across Singapore. Sheng Siong's stores provide fresh and chilled produce, seafood, meat and vegetables, processed, packaged and preserved food products as well as general merchandise such as toiletries and essential household items.

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Sheng Siong (SSG SP)

RE&S Holdings – Operator of Japanese F&B Outlets Debuts on SGX

Singapore Exchange Ltd (SGX)

Not Just a Minor Miss: A Dividend Cut Is Inevitable.

Most sell-side analysts considered Dairy Farm’s 1H17 results not too worrisome but "just a minor miss". Sales stayed flat at constant exchange...

Viki W.K. Li

Dairy Farm International: Who Moved My Cheese?

Complacency makes Dairy Farm a perfect shortDairy Farm Intl Hldgs Ltd (DFI SP) has enjoyed being an oligopoly in Hong Kong and Singapore’s...

Viki W.K. Li

The Week that Was in ASEAN@Smartkarma - Big Ideas, Schools and Department Stores

In the week's ASEAN weekly, we feature an interview with Patrick Cao, the new CFO ofTokopedia. It is an on-line C2C marketplace and one of...

Angus Mackintosh

Then & Now: Online Grocery Delivery in the US & SE Asia (Part 2 of 2)

In this piece, we continue part 2 of the article written by Daniel Hellberg as part of our collaboration piece: #Then & Now: Online Grocery...

Valerie Law, CFA

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52-week Range

Market Cap (USDm)

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