Sheng Siong Family Become Billionaires After COVID-19 Led to a Spike in Its Share Price

By
George Yang
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Pray tell me: in the last few days, where’ve you been?

Bubble tea stalls, hawker centres and supermarkets.

While most businesses are dying or have died due to the economic impact caused by COVID-19, some are making a killing.

Reader Bao: Like bubble tea stalls?

No, though I’ve a feeling that they’d eventually be shut down soon.

I’m talking about supermarkets.

Sheng Siong Owners Became Billionaires After COVID-19 Led to Spike in Its Shares

The three main supermarkets in Singapore are NTUC FairPrice, Giant and Sheng Siong.

NTUC FairPrice is somewhat linked to the Government so they’re not exactly profit-driven.

Giant is under a big group called Dairy Farm, which is a Hong Kong company that’s listed in the London Stock Exchange and also in the Singapore Exchange. And because it’s not a Singapore company, we don’t really care about its profit, though it’s interesting to note that its share prices have indeed increased since 23 March 2020; it was then trading at USD$3.70, but is now worth USD$4.88 per share.

It’s also important to note that the stocks of almost all companies in the world have plummeted in recent months. This is the stock price of STI for the last 365 days—something like an “average” of all the stocks in Singapore:

Sad, isn’t it? Though it’s good to see that it’s bouncing back recently, which is the case all over the world as well.

But Sheng Siong; Sheng Siong is different.

Here’s the chart for the last 365 days:

Yes, its price is even higher than pre-COVID-19 period.

Here’s its growth in the last month:

And that growth that made its owners billionaires.

Reader Bao: You don’t CB, don’t think I never study econs. If it’s a listed company, it’s owned by shareholders like you and me who can buy them

You’re right, but the family that owned Sheng Siong has 57% of the shares.

And according to the Bloomberg Billionaires Index, that would have meant the 57% would amount to a whopping S$1.57 billion.

Accidental Billionaires? No, Skilled Billionaires

So the family might have been an accidental billionaire; after all, when they started Sheng Shiong back in 1985, they’d not have expected COVID-19 to come in and make them billionaires.

But it seems like they know how to make a killing.

According to regulatory filings, the founder, Mr Lim Hock Chee, had bought more Sheng Shiong shares last month through a joint account with his wife.

Now, remember: the price back then was extremely low.

Maybe they bought it because the price was right?

According to a Straits Times interview back in 2008 then, he had said this: “When people stayed away from restaurants during Sars, we enjoyed brisk business because more people started buying food to cook at home.”

Smart?

Smart.

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Amazon Also Smart. Maybe.

And over in the global world, Amazon’s share price is also skyrocketing, hitting the USD$2.3k per share mark for the first time since it was listed.

And while Jeff Bezos has become even richer, it’s suddenly made a controversial decision recently; it reduces the affiliate commission rates.

Simi is affiliate commission rates, you ask.

Basically, many websites have affiliate links to Amazon, whereby if someone goes to Amazon with the links, the website would earn a certain % of the sale.

It’s often been one of the main marketing channels for Amazon, and a quintessential bloodline for websites.

With Amazon’s share prices skyrocketing and a sudden drop in commission, it obviously didn’t go well with many websites that have brought in so much traffic to the e-commerce giant in the past, with websites thinking that Amazon is cutting them off since the COVID-19 has brought in considerable traffic without marketing.

But of course, you’ve got to admit: during this entire outbreak, all businesses are trying to stay afloat.

Before that, it was a dog-eat-dog world. Now those dogs have become wolves.

So you either become a billionaire or you lose your business.

There’s no in-between—I mean, have you heard of a business that’s “not affected”?

Not me.

In the meantime, if you’d like to know why people are heading over to Sheng Shiong or Amazon to buy toilet paper, watch this and you’d understand that it’s not because everyone has a diarrhoea after eating too much instant noodles:

(Also, check out our YouTube channel for more informative and entertaining videos!)

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George Yang
Email: [email protected]