To outsiders, the "sushi war" in Singapore may seem a little ridiculous considering most Singaporeans are ethnically Chinese. Japanese occupation from 1942 to 1945 can't exactly be described as culture changing. Yet Genki Sushi, Sakae Sushi and others who cater to the large expat Japanese community and everyone else with a penchant for sushi are fighting it out as though eating sushi was a national pastime. Apex-Pal, the Singapore Exchange listed company which owns the Sakae Sushi chain, announced it was adding forty new menu items. Will this really make a difference to its stock price, though?

I have met CEO Douglas Foo, and his commitment to innovation in sushi struck me as almost fanatical. That's intended to be a compliment, although not a stock recommendation. It's quite apparent how much thought goes into everything they do – down to the frog sitting on a gold ingot (can you spot it?) in their logo. This effort is almost always matched by the long queues on weekends, particularly at its Wheelock Place outlet.

Now if only the stockprice could catch up. It has been trading in a tight range for many years (see chart). It receives very little attention from analysts and investors, with average volumes only around 160,000 shares per day (source: Reuters). If it wasn't trading at more than 2.3x book value, one could almost call it a value stock, with a price earnings multiple of 9x and a yield approaching 3%.

I'm not sure how adding "another 40 new items to its already extensive menu, bringing the total number of irresistible delights to 230" will change this, even less that "Sakae Sushi is adjusting its two-tier pricing. Customers will be able to enjoy its premium plate or red plate items such as fresh sashimi and special maki at only $4.99, instead of the usual $6.50."

Price wars have rarely been good for anyone. No wonder the logo at rival Genki Sushi is frowning.


Mark Laudi