1. Sheng Siong Group
Everyone is talking about Amazon Go coming into Singapore and taking over the grocery scene. Let’s stop focusing that now and take a look at our local players and their plans.
Sheng Siong, among other local supermarket companies, is facing some challenges in adapting to the situation.
That said, Amazon is not going to snag up all of the local fresh produce’s business.
Back when Redmart was first introduced in Singapore, it was a force to be reckoned with but not a huge threat. Most Singaporeans are still more comfortable with choosing their groceries personally at the brick and mortar stores.
Also, as much as Amazon Go is an online grocery delivery service like Redmart, it just acquired Whole Foods Market and is looking at physical stores to complement their online service.
With those points in mind, OCBC Research gave Sheng Siong Group Limited (SGX: OV8) a BUY call with a target price of $1.04.
2. Wilmar International
After some gloomy times over at the agri-business group, Wilmar International managed to make a come back in the recent quarter by recording a net profit of US$60.2 million.
In the same period in 2016, Wilmar International reported a net loss of US$220.1 million. Luckily, it was a one-off loss, and it seems to be back on track.
In more recent times, Wilmar International announced their expansions through acquisitions and large stake holdings of 50% in Aaist Chocolate and Three-A Qinhuangdao Food Industries.
The agri-business group isn’t expected to stop and might even focus on key markets such as China.
Above all, Wilmar International’s substantial shareholder Archer Daniels Midland also fattened their stake. Nevertheless, OCBC Research gave Wilmar International Limited (SGX: F34) a HOLD call with a future value estimate of $3.68.
The last of the notable stocks today is our local telco service provider, Starhub.
As its mobile segment, pay TV and broadband segments started shrinking earlier in the year, Starhub has to start looking for alternative sources of revenue.
Of the many initiatives and plans, the local telco service provider has, UOB Kay Hian Research sees “excellence in cyber security” as one of their key developments now.
Starhub is acquiring Accel Systems & Technologies over three phases for $45.6 million. As a result, their in-house cyber security segment should see a substantial boost and allow them to position well in a world where cyber attacks are prevalent.
Starhub’s expansion in cyber security will also benefit their Fixed Enterprise Group, which is dubbed by analysts as Starhub’s main source of hope in the years to come.
Even then, UOB Kay Hian Research gave Starhub Limited (SGX: CC3) a HOLD call for now, with a target price of $2.62. The target price might drop to $2.20 if Starhub’s network sharing with M1 fails to follow through.