Sheng Siong Group

(16-12-2013, 05:31 PM)CityFarmer Wrote: During the period, where the company seems revising its business strategy, the CFO resigned. Is it a coincident?

Ref: http://infopub.sgx.com/Apps?A=COW_Corpor...q7IRPQeSYI

Finance jobs are in demand nowadays.

So this CFO knows this is a good time to negotiate a higher pay package in other companies versus the usual pay increase in SSG.

(16-12-2013, 06:00 PM)ForeverAlone Wrote: Maybe because the CFO is part of the lim family? Lol

The filings mentioned that there were no familial relationship between the resigning CFO and the Lim family.

(16-12-2013, 05:31 PM)CityFarmer Wrote: During the period, where the company seems revising its business strategy, the CFO resigned. Is it a coincident?

Ref: http://infopub.sgx.com/Apps?A=COW_Corpor...q7IRPQeSYI

Only once a year shareholders will have a chance to ask the management what are they thinking... unfortunately.

Quick question - would there be an IPT disclosure requirement if they buy some of the properties from their own personal holding vehicles?

(16-12-2013, 05:31 PM)CityFarmer Wrote: During the period, where the company seems revising its business strategy, the CFO resigned. Is it a coincident?

Ref: http://infopub.sgx.com/Apps?A=COW_Corpor...q7IRPQeSYI

When I was first researching on Sheng Siong, I noticed that they have 2 finance guys at the top (See below, from AR 2012). I was sort of puzzled then as to who is the top Finance guy. Mr Wong I reckon is prob 10-20 yrs senior to Mr Lim. An ex-colleague of mine, who attended one of the IR events, mentioned that Mr Wong was the one answering most of the qns, coz the Lim brothers are not well versed in English. I think he also mentioned that Mr Wong was brought in for the IPO exercise, given his previous experience.

Perhaps other valuebuddies who have attended IR events can give further insights into the roles and dynamics between the 2. That will allow us to draw better relevance from the announcement.


WONG SOONG KIT
Finance Director
Mr Wong Soong Kit is responsible for
overseeing our Group’s finance and
accounting functions, treasury management,
strategic planning and budgets, tax
management, corporate governance and
internal controls.
Prior to joining our Group in 2011, Mr Wong
was a financial consultant working on initial
public offerings, mergers and acquisitions,
and financial reporting. Between 1989
and 2009, Mr Wong served as the group
finance director of BRC Asia Ltd (“BRC”),
a company listed on the SGX-ST, where his
areas of responsibility included financial,
strategic, and risk management, as well as
leading BRC’s initial public offering exercise
in Singapore in 2000, assisting with the
initial public offering of BRC’s then-majority
shareholder, Acertec PLC, on the London
Stock Exchange AIM Market in around 2006,
and managing BRC’s joint venture in China.
Between 1978 and 1989, Mr Wong served
as chief financial officer of Guthrie GTS Ltd,
a company listed on the SGX-ST, where he
assisted with the group’s restructuring and
merger and acquisition exercises. Between
1977 and 1978, Mr Wong worked with Comex
Far East Pte Ltd as an accountant. He served
as an audit clerk with PriceWaterhouse (as
it was then known) between 1974 and 1977.
Mr Wong is a Chartered Accountant and
Fellow of the Association of Chartered
Certified Accountants (ACCA) (UK), as well
as a Fellow of the Institute of Certified
Public Accountants of Singapore. He is an
Independent Director of Swee Hong Ltd, a
company listed on the SGX-ST.


LIM CHEE WEE RYAN
Chief Financial Officer
Mr Lim Chee Wee Ryan is in charge of
our Group’s financial statements, cash
management, corporate governance, and
internal controls.
Prior to joining us in early 2009, Mr Lim
served as an internal audit executive and
personal secretary to the executive chairman
of San Teh Ltd, a company listed on the
SGX-ST, between 1998 and 2000. Between
2000 and 2001, Mr Lim worked as an internal
auditor with Asia Pulp & Paper Ltd, one of
the largest paper and pulp companies in
the world. He then joined Overseas Union
Enterprise Ltd, a company listed on the
SGX-ST, as an internal audit executive,
serving between 2001 and 2003, before
becoming a senior consultant at KPMG
(as it was then known), where he worked
till 2004. Between 2004 and 2007, Mr Lim
worked as an associate principal at LTC
& Associates (as it was then known), an
independent member of BKR International,
a global association of accountancy firms.
During 2007, Mr Lim served as an assistant
director at Informatics Education Ltd, a
company listed on the SGX-ST. In late 2007,
Mr Lim became a director of JF Virtus Pte
Ltd, an assurance services consultancy firm
serving publicly-listed companies. Between
2008 and 2009, Mr Lim served as regional
controller to Alantac Technology Ltd (as it
was then known), a company listed on the
SGX-ST. Mr Lim graduated with a Bachelor
of Accountancy degree from Nanyang
Technological University of Singapore in
1998. He is a Certified Public Accountant
(non-practising) and a member of the
Institute of Certified Public Accountants of
Singapore (ICPAS) as well as a Certified
Internal Auditor and member of the Institute
of Internal Auditors.

My personal take is Ryan Lim is not a real CFO in the sense you would expect in terms of job scope.

He was probably someone the Chairman and his associates trust on a personal level and can be seen presentable with some elementary grasp of financial concepts, enough for the occassional public interaction needed. I strongly doubt he is invovled in any strategic matters of the business.

I base my conjecture on his lacklusture career and frequent job hopping as publicly disclosed:

1998-2000: Secretary @ Santeh
2000-2001: Internal Auditor @ Asia Pulp & Paper
2001-2003: Internal Audit Executive @ OUE
2004-2004: Senior Consultant @ KPMG <- This role is the euqivalent of a Senior Associate in a big4, i.e. a degree graduate after joining for 2 years.
2004-2007: Associate Principal @ LTC <- Appears to be yet another junior accountacy role with a small local firm
2007-2007: Assistant Director @ Informatics <- Fancy title equivalent to roughly an Assistant Manager in a MNC or regional blue chip
2007: Director @ JF Virtus <- Appears to be a small setup
2008-2009: Regional Controller @ Alantac
2009-Present: CFO @ SSG

If you look at his resume, not withstanding the frequent job hopping even by Gen Y standards, he appears to have had only light weight associate level accountancy and auditing experience prior to 2008. Conspicuous is the absence of any prior appointment with P&L responsibilities.

For unknow reasons he was suddenly elevated to be a Regional Controller in Alantac, this I have grave reservations that the job title is reflective of what he really is doing. Anyway I don't know anything about Alantac.

It makes even less sense that a year after, he was recruited by SSG to be a CFO. Objectively looking at his CV, one is drawn to conclude that his level of experience prior to being made a CFO is scant at best. The wealth of his experience probably qualifies him as an entry level Finance Manager in a mid sized firm or a Senior Executive / Accountant in a large MNC in an arm's length hire.

It is worthwhile also to note that as disclosed in the Director's Report, his total remuneration inclusive of bonuses and benefits is still below S$250,000. Even if you give him the maximum benefit of doubt and assume he draws $249,999; on the disclosed pay mix of 67.5% after deducting employer's CPF and AWS, it works out to barely $12,000 per month - A ridiculously low package for the CFO of a $700million turnover company.

If my conjecture is correct, it would highlight that SSG has questionable Executive staffing practices, which honestly is pretty much endemic in most family run businesses in Asia. The upside of all this is he ain't gonna make any difference to SSG with his departure as he likely wasn't in a position to influence much in the first place.

Can't seem to find the attachment. I always thought CFO Lim is related hence Wong is the one doing the real work.

Interesting job description for the CFO:
Assists Finance Director in overseeing the preparation of the Group's financial statements, cash management, corporate governance, and internal controls.

Maybe the key is who bought listed equities before IPO and hence lost money when divesting for the IPO.

(17-12-2013, 09:58 AM)thefarside Wrote:

(16-12-2013, 06:00 PM)ForeverAlone Wrote: Maybe because the CFO is part of the lim family? Lol

The filings mentioned that there were no familial relationship between the resigning CFO and the Lim family.

Wong was brought in because SGX was not comfortable with Lim's experience when they were pending for IPO. Remains a mystery why Lim was appointed in the first place.

The company announced its end year result today. One key point is the dividend reduced from 1.75 cents to 1.40 cents per share. It brings the total dividend of FY2013 from 2.75 cents to 2.60 cents per share.

-------------
Sheng Siong Group’s core net profit grew 18.6% yoy to S$38.9 million for FY2013
 Revenue increased 7.9% yoy to S$687.4 million in FY2013 largely due to higher
new stores sales, which was offset partially by lower comparable same store
sales
 Gross profit margin increased from 22.1% in FY2012 to 23.0% in FY2013 mainly
due to lower input costs derived from the distribution centre and better sales mix
 Proposed final dividend of 1.4 cents per share, bringing the total dividend to 2.6
cents per share or equivalent to a payout ratio of around 92.5% for FY2013
 Board reiterates commitment to continue distributing up to 90% of net profit after
tax for FY2014
 Committed to nurturing the growth of the new stores and expanding store
footprint across Singapore

Ref: http://infopub.sgx.com/FileOpen/SSG_FY20...eID=275389

I had negative view on the recent change of strategy by the company i.e. to own, instead of rent its retail shop. But after a more detail review, I have changed my mind, and decided to take advantage of the recent "adjustment" of the company share price below 60 cents.

One reference of mine was the McDonald's strategy on leveraging its brand, to secure substantial real estate interest for the land/building owned. Of course, SS is no way to compare with McDonald, either in size, brand name etc, but the concept is similar.

The existent of McDonald, changes the value of a real estate, either in rental or value. The same will apply to SS shop. By a simple survey, you will find people are visiting SS, even it means longer walking distance, and/or extra bus trip. It is undeniable that the SS show plays an important role on the "desire".

Should the company owned all its retail shop? The answer is obviously not, since not all shops are equal. A ratio of 30 (owned):70 (rent) or 20 (owned):80 (rent) is comfortable to me. The company needs to maintain a reasonable asset-light model to grow.

The upcoming online store also a catalyst. I noticed the success of online stores e.g. redmart. SS will have an advantage to gain market share, comparing with other players, if done right. I will take NTUC online store more seriously than competitors like redmart. Of course, innovation might surprise me.

M'sia venture is also an unknown, but I will not bet too much hope on it, till further update.

All comments are welcome.

(vested)

Overvalued. Stay away.