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Strategy
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The opportunity right in front of us - Sheng Song.
Confused myself, the head of the confused family fund. Good at layout of global high-quality assets, good at buying at low levels, holding high-quality assets for long-term gains.
Confused likes to blow the whistle at low levels, especially when high-quality targets are neglected. Earlier the opportunities of S-reits were introduced, and there has been a wave of market trends in August. What are the other good opportunities to come?
Yes! It's right next to you, the supermarket at your doorstep that you visit every week - Sheng Siong.
Let's quickly understand Sheng Siong from the aspects of quality and current valuation:
1. Sheng Siong itself has good quality:
The current P/E ratio of Shengsong is approximately 16, with a dividend yield of 4%.
2) Singapore's unique neighborhood center model and high service costs are the basis for the survival of the neighborhood supermarket model. It's difficult for other countries to replicate this model. Investors should not just copy blindly. The supermarket models that can survive in the USA and Singapore are completely different species.
3) Still maintaining steady growth. The pace of new stores is not fast, after all, land is scarce in Singapore. The undeveloped areas are becoming less and less, but there are still HDBs, commercial centers, and neighborhood centers being continuously developed. Although the increase in this part is not substantial each year, it is still a significant increment that cannot be overlooked.
4) A reliable and stable management team.
Is the company a good company, but is it cheap now?
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During the initial stage of the epidemic, Sheng Siong's demand, performance, and stock price surged. In the post-epidemic era, what is the valuation level?
After the surge in 2020, Sheng Siong has been trading flat for 3 years. Investors have lost patience with it and are exiting one after another. Unable to bear this situation while looking at opportunities worldwide.
And this is exactly the right time to enter!
The current P/E ratio of Sheng Siong is approximately 16, with a dividend yield of 4%.
In history, the valuation was below 20%.
From the perspective of the next 5 to 10 years, the return rate of the asset itself is about 5%. With a certain growth rate, reaching 5% based on the past 10-year history should not be a problem. Buying at the current price should result in an actual annual ROI of around 10%.
Regarding the issue of growth rate, it took three years for the market to return to calm after the outbreak of the epidemic, and during these three years, the performance of Shengsong has hardly changed. This is also the fundamental reason why the stock price has not gone up in three years.
Everything needs to go back to the fundamentals.
We cannot assume that there will be no growth in the future just because of the calmness of the past three years. From history, what we need to learn is the underlying logic, not simply linear extrapolation!
From the perspective of a light-asset consumer supermarket, even if it continues to operate as it is, in theory, it can achieve inflation-adjusted growth. Plus, with a small number of new store openings, an average growth rate of 5% for the next ten years is not unreasonable.
As a stable company in a stable market, it is a good investment.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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懒胡涂 OP : If Sheng Siong's price continues to drop, I will continue to add positions.
懒胡涂 OP : $Sheng Siong (OV8.SG)$ Steady Sheng Song is beginning to show off. Don't worry; this has only just begun, and the good drama is yet to come.
$Hang Seng TECH Index (800700.HK)$
$FTSE Singapore Straits Time Index (.STI.SG)$
懒胡涂 OP : Shengsong has improved recently; after all, there isn't much room for adjustment in the valuation to this point. I talked about Shengsong's opportunities before, but I wonder how many people understood that?
$Sheng Siong (OV8.SG)$
$Nasdaq Composite Index (.IXIC.US)$
$FTSE Singapore Straits Time Index (.STI.SG)$
懒胡涂 OP : $Sheng Siong (OV8.SG)$
Earlier, the author suggested the value of Shengsong supermarket. Looking back today, I'm once again reminding everyone to buy at the bottom.
After a few times, some people began to think that the author is a short-term expert. This definitely needs to be clarified. I don't have the ability to guess the bottom line; I just buy every time I feel that the value of an enterprise exceeds its stock price, regardless of whether the market is passionate about him. When the author is interested in many stocks, the market may just be lukewarm towards him.
Short-term friends can choose to fall into the bag for safety in this position. However, Hu Tu will continue to hold it and once again state that Hu Tu invests in enterprises and does not like to do short-term work.
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