Here are Courts Singapore's 4 key demand drivers

S$16.8m sales increase is forecasted.

According to Phillip Securities, Courts Singapore can expect strong growth in market demands from these 4 key areas:

1. Increase in population – up to a yearly increase of 86k Based on the latest government projection, Singapore’s population could rise up to 6.9 million by 2030. 

With 2012 mid-year estimated population of 5.3 million, and assuming a straight line increase, this implies an increase of 85,820 people per year.

With a total fertility rate of 1.29 as at 2012 in Singapore, this increase in population is expected to come from having more foreigners, likely with considerable purchasing power and need for household products.

Based on a forecast spending of S$2,000 per person yearly, this translates to S$16.8 million increase in sales yearly, based on market share assumption of 9.8%.

This represents 2.3% of FY2012 total sales revenue.

2. Increase in spending – Favorable age demographics, positive impact from Budget 2013. With a median age of 38.4 years in Singapore, and a majority of the population being working adults, as opposed to retirees or infants with limited spending power, Courts is able to benefit from the favorable age demographic.

Furthermore, this favorable demographic is likely to sustain in the near term, benefiting from the flow of foreigners, as per discussed above, converting to resident status.

3. Rapid technological innovations - Technology innovations have developed rapidly in recent years. For example, television sets are now thinner, of higher resolution and richer in color, with new technologies developed including LCD, LED and now OLED.

Mobile phones have also advanced from feature phones to smartphones capable of detecting gestures and movements.

Coupled with the higher consumer spending power described above, these technology innovations have led to higher rates of replacement of Electrical and IT products as people adopt the latest innovations.

With innovations expected to continue, this is expected to drive sales growth.

4. Increase in new housing units – The government has shared plans to construct 200,000 new housing units by 2016. 500,000 more new housing units are also expected to be constructed after 2016 to 2030, taking the total new housing units to 700,000.

These new housing units would require household products, including items like new television, refrigerators, and furniture. Assuming a straight line increase, this translates to 65,853 new houses yearly from CY2013 to CY2016 and 35,714 new houses from CY2017 to CY2030.

Based on a forecast spending of $5,000 per new house, this translates to S$32.3 million of recurring sales till CY2016, and S$17.5 million of recurring sales till CY2030, based on market share assumption of 9.8%.

This represents 4.5% and 2.4% of FY2012 total sales revenue respectively.