Mondrian continues to trim Sheng Siong stake; Kim Heng CEO Tan raises stake

The Edge Singapore
The Edge Singapore5/14/2021 06:30 AM GMT+08  • 3 min read
Mondrian continues to trim Sheng Siong stake; Kim Heng CEO Tan raises stake
Asset manager Mondrian no longer substantial shareholder of Sheng Siong; CEO Thomas Tan of Kim Heng raises stake in O&M group.
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Mondrian Investment Partners is no longer a substantial shareholder of the supermarket chain operator Sheng Siong Group. On May 5, the London-based asset manager sold just over 2.53 million shares on the open market for $3.97 million, or an average of $1.57 per share. With that, Mondrian is left with around 72.93 million shares, or 4.85%, down from 5.02% previously although it remains the second-largest shareholder.

Back in May 2018, Mondrian acquired a 6.58% stake, or 99 million shares, from the controlling Lim family for $99.99 million, which works out to $1.01 each.

Mondrian has been gradually paring its stake. As indicated in a regulatory filing dated Oct 30, Mondrian sold 885,100 Sheng Siong shares on the open market, collecting proceeds of just over $1.45 million. This works out to an average selling price of $1.63 per share. The Lim family, with nearly 50% stake, remains the controlling and largest shareholders of the company.

Sheng Siong shares enjoyed a good run last year as people stock up on essential items amid the Covid-19 pandemic, sending its earnings up 83.7% for the whole of FY2020 ended December 2020. However, since the recent peak of $1.85 reached last August, Sheng Siong shares have eased off to close at $1.53 on May 10, barely unchanged year to date.

For 1QFY2021, the company reported earnings of $30.9 million, up 6.5%. Revenue in the same period was up 2.7% to $337.5 million.

In its April 26 earnings commentary, Sheng Siong notes that with the containment of Covid-19 infections as well as the progressive rollout of vaccinations in Singapore, it expects “elevated demand” caused by the pandemic to taper off. “Consequently, we are expecting lower revenue in 2QFY2021 compared to 2QFY2020 as elevated demand peaked, we achieved record revenue of $418.7 million. Going forward, there will also be comparatively lesser Covid-19 grants and rebates as the pandemic situation improves,” the company adds.

“The group remains focused on its goal to expand its retail network and improve same-store sales in Singapore and China. We will work on driving cost efficiencies, enhance gross margins by working towards a sales mix with a higher proportion of fresh produce and deriving more efficiency gains from the supply chain,” says CEO Lim Hock Chee in his earnings commentary.

Kim Heng tries to catch the wind
Thomas Tan Keng Siong, executive chairman and CEO of Kim Heng Offshore & Marine, has been buying up shares of the company. On May 4, via an entity called KH Group Holdings, Tan acquired 500,000 shares for $19,110.16, or an average of 3.82 cents each. On May 3, he bought the same volume at the same price too.

KH Group is held by Tan and his wife, Natalie Amanda Ng Chwee Lian.

Following the transactions on May 4, Tan and his wife hold a deemed stake of 282.75 million shares, equivalent to 39.97%, up from 39.9% previously. In addition, Tan holds a direct stake of 100,000 shares, which gives him a total interest of 39.98%. The last time Tan had bought Kim Heng shares was on Oct 8, 2020, when he paid $3,000 for 100,000 shares, or three cents each.

Up till May 11, Kim Heng was known as Kim Heng Offshore and Marine. The name change, which was approved by shareholders at an EGM held on April 23, reflects its expansion beyond the offshore and marine industry. Last year, Kim Heng won contracts to support the construction and to help service wind farms in Taiwan.

For the full year ended Dec 31, 2020, Kim Heng narrowed its losses by 32% to $5.3 million from losses of $7.8 million in the preceding year. Revenue in the same period was down 35% to $37.6 million.

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