Industry Focus ASEAN Grocery Retail Refer to important disclosures at the end of this report DBS Group Research . Equity 22 Jul 2015 OVERWEIGHT Whetting ASEAN's appetite STI : 3,373.48 KLCI : 1,724.13 Modern grocery retail’s growth is outpacing SET 50 Index : 964.19 traditional retail in ASEAN JCI : 4,869.85 Pockets of growth are in Philippines, Indonesia, and PCOMP : 7,541.17 convenience store formats Analyst Companies will develop scale to strengthen their Alfie YEO +65 6682 3717
[email protected] market positions Andy SIM CFA +65 6682 3718 Top picks are Singapore-listed grocery retailers SSG
[email protected] and DFI Namida Artispong +662 657 7833 Modern retail is underpenetrated. Growing wealth,
[email protected] urbanisation, affluence and a rising middle class in King Yoong CHEAH CFA +603 2604 3908 ASEAN has fuelled changing consumer spending habits
[email protected] from needs to wants, better consumption and shopping Edwin LIOE +6221 3003 4936 experiences. We see ASEAN modern grocery retail
[email protected] continuing to develop at a FY14-17F earnings CAGR of 4-28%, driven by store openings and margin expansions. We identify the fastest areas for growth in ASEAN grocery retail to be Indonesia, Philippines, and STOCKS Performance (%) convenience store formats. Price Mkt Cap Target Price LCY US$m LCY 3 mth 12 mth Rating Rising middle class driving food retail growth. Penetration of modern retail remains low in Malaysia, Dairy Farm 8.70 11,764 10.42 (6.8) (19.4) BUY Sheng Siong Group 0.87 949 0.98 8.8 30.1 BUY Thailand, Indonesia and Philippines at <50%.