I am a recalcitrant in maxing out my CPFIS stock limit. It is thus no surprise to myself that I used the sales proceed from AEM to add more Sheng Siong and The Hour Glass this week.
The Hour Glass
The company just released its 20241H result a few days ago and I am pleased that the results was better than my expectation. In an earlier video (The Hour Glass from 4’18”), I said that if the drop in their top and bottom lines was just in the teens, then it would be likely that dividend of 2 + 6 cents can be sustained. This is so due to the low dividend payout and strong balance sheet.
As seen from the income statement, it is better than that. Revenue was flat and income just dropped by 9%. With the frequent share buybacks, EPS just dropped by 7%.
The half year EPS is already more than FY2023 dividend of 8 cents. So unless something drastic happen in the second half, I am confident that DPU for FY2024 would at least be the same. That’s a yield of about 4.7% for my average purchased price.
I re-started my investment in Sheng Siong impulsively in August because its price was reasonably attractive again. Since then it has released its Q3 results and again I am pleased that it turned out better than my expectation.
Amid the tough environment, the group was able not only to inch up its revenue but also its net profit, reversing the slight dip reported in 1H. It is anyone’s guess how things would be like going forward.
For me, I choose to believe that the management can continue to increase their store counts slowly which would lead to higher revenue and profit, and hence a sustainable dividend for the next few years.