Sheng Shiong is going to launch its IPO. Was it a wrong timing to do such a thing in this current market environment? Is it a good stock to hold in the first place?
We need to look at its business sustainability and growth before we decide. Sheng Shiong is competing with NTUC Fairprice and and Dairy Farm. Not only that, it is also competing with the mom-and-pop shops in the heartlands. Sheng Shiong's main strategy is always to compete on price and its "freshness" offerings of its foodstuffs.
Few positive things to note is that the business of providing basic necessities is so-called "recession-proof". It is also offering 90% of the profits as dividends.
So does this make the decision whether to participate in this IPO any easier?
One thing I need to know is: I recently found out by reading the annual report (2009) of the now suspended China Hongxing Sports Limited (traded on SGX) that Sheng Shiong holds 40 million shares (1.43%). Will this in anyway affect Sheng Shiong?
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