JKSB: Full Year Highlights: Singer (Sri Lanka) PLC (SINS): FY19
FY19 was a challenging year for the Group due to subdued growth in economic activity and per capita income affecting the consumer durables industry adversely. SINS is the largest retailer, financier and manufacturer of consumer durables with 442 retail stores in the country. Negative growth in high margin items coupled with higher discounts on slower moving items resulted in GP margins for the Group contracting from 27.96% to 27.52% (YoY) during the year. Increases in exchange losses and finance costs resulted in a significant decline in earnings (-76% YoY) to Rs.250Mn during FY19.
We currently project SINS’s full year FY20E earnings to reach Rs.240Mn. Amid subdued economic activity the consumer durables industry will continue to face pressure from policy related to import restrictions and low disposable income levels. At the current price of Rs.27.50, SINS trades at an FY20E P/E of 43.04x, at a premium to the trading sector in our coverage universe.
•JKSB is one of 15 founding members of the Colombo Stock Exchange with roots in share trading dating back to 1896, and is a subsidiary of John Keells Holdings PLC (JKH), the largest listed entity on the Colombo Stock Exchange with a market capitalization of US$ 1.3bn.
•JKSB’s core client base is Foreign Institutional Investors, Local Institutions and HNWI’s
•JKSB has a co-branded Research tie up with CIMB and a Research Referral agreement with Credit Suisse, along with trade execution relationships with several other global and regional securities firms.
•JKSB’s trade execution partners include Credit Suisse, CIMB, Merrill Lynch, Exotix, Daiwa, Convergex, Deutsche Asia Securities and Morgan Stanley
•JKSB is a research contributor to Bloomberg on ‘KEEL’
•The JKSB Research Universe covers 72 stocks across 15 sectors, with most Research efforts focused on approximately 45 of the more liquid counters.
•The JKSB Universe constitutes 67% of total market cap and approximately 80% of turnover at the CSE.
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