Kevin Smith, of Delft Partners and portfolio manager of the TAMIM Asia Small Companies Fund, highlights one of the stocks in the Asia Small Companies portfolio.
This is the stock behind last month's Bloomberg headline Pig Farmer’s Sons Become Billionaire Grocers in Virus’s Wake.
Sheng Siong Group (SSG) was founded in 1985 by the Lim brothers (Mr Lim Hock Eng, Mr Lim Hock Chee and Mr Lim Hock Leng). Prior to that, the Lim brothers were helping out at their father’s pig farm in Punggol. As the farm was facing an over-supply situation, Mr Lim Hock Chee and his wife rented a stall at one of the now-defunct supermarket chain stores in Ang Mo Kio (BLK 122 Ang Mo Kio Ave 3) to sell chilled pork. Just when the couple managed to clear the excess stock, the supermarket owner ran into financial problems and put up the various stores for sale to existing tenants, including the one where Mr Lim Hock Chee and his wife were manning the pork stall. With the government phasing out pig farms, and armed with seed capital from their father, Mr Lim Kim Siong and his brothers took the plunge and ventured into retail business by taking over the store at BLK 122. This becomes their first Sheng Siong store and remains operational today. Sheng Siong has subsequently expanded to operate fifty nine stores in Singapore, two joint venture stores in China, a warehousing and logistics business in Singapore (CMM) and two co-branded payment cards (Diners Club and Bank of China). The Lim family recently broke into the ranks of self made billionaires through the family shareholding in SSG.
Accounting, Strategy and Governance Comments
Official retail sales numbers to February 2020 in Singapore, showing strength in supermarket sales and weakness in luxury goods:
Value, Momentum and Quality Comments
Sheng Siong (blue line) has clearly outperformed key local competitor Dairy Farm International (red line) over one, three and five years:
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