Broker: CGS International
Date of Report: May 2, 2025
Sheng Siong Group: Riding Singapore’s Retail Uptrend with Resilience and Momentum
Market Snapshot: Global Risk Appetite Returns Amid Tech-Driven Rally
Global equity markets are in the midst of a robust rebound, propelled by strong technology sector earnings and renewed optimism about easing trade tensions. Wall Street has seen a significant resurgence, with the S&P 500 notching an eight-day winning streak—the longest since August. The Nasdaq 100 rose 1.1% as heavyweights like Microsoft and Meta Platforms surged on positive earnings. Meanwhile, news of potential U.S. tariff talks with China and possible easing of restrictions on Nvidia’s sales to the UAE are supporting risk appetite.
In the bond markets, U.S. Treasury yields climbed, with the 10-year rate hovering around 4.21%, as investors scaled back expectations of near-term Federal Reserve rate cuts following encouraging factory activity data. The U.S. dollar also advanced on the back of these trade developments. Market participants are closely watching Apple’s earnings for commentary on tariffs, while Amazon shares dipped after its operating income forecast missed expectations. Attention turns next to the pivotal U.S. jobs report.
Sheng Siong Group Ltd: Scaling Up with Steady Growth and Technical Strength
Financial Highlights: First Quarter 2025 Performance
- 1Q25 PATMI: S\$38.6 million, up 6% year-on-year, slightly surpassing the forecast of S\$36 million.
- New Store Sales Growth: 6% year-on-year, underscoring successful expansion efforts.
- Store Openings Outlook: 10 new store openings expected for FY25F, which may temporarily pressure profitability as overheads rise ahead of full revenue ramp-up.
- Earnings Trajectory: Steady earnings growth anticipated through FY25F–FY27F.
- Target Price: S\$1.90 based on approximately 19x FY26F P/E.
Company Profile: Sheng Siong Group at a Glance
Sheng Siong Group Ltd is a leading grocery retailer in Singapore, operating a network of stores across the island. The company specializes in providing fresh and chilled produce, seafood, meat, vegetables, processed and packaged foods, as well as general merchandise such as toiletries and essential household items.
Technical Analysis: Uptrend Intact, Momentum Strong
- Last Price: S\$1.76
- Entry Price(s): S\$1.76, S\$1.68, S\$1.62
- Support Levels: S\$1.68 (Support 1), S\$1.57 (Support 2)
- Stop Loss: S\$1.56
- Resistance Levels: S\$1.77 (Resistance 1), S\$1.90 (Resistance 2)
- Target Prices: S\$1.90 (TP1), S\$2.00 (TP2), S\$2.20 (TP3), S\$2.40 (TP4)
| Metric |
Value |
| Last Price |
S\$1.76 |
| Support 1 |
S\$1.68 |
| Support 2 |
S\$1.57 |
| Stop Loss |
S\$1.56 |
| Resistance 1 |
S\$1.77 |
| Resistance 2 |
S\$1.90 |
| Target Price 1 |
S\$1.90 |
| Target Price 2 |
S\$2.00 |
| Target Price 3 |
S\$2.20 |
| Target Price 4 |
S\$2.40 |
Key Technical Observations
- Sheng Siong has maintained a steady uptrend since July 2024.
- A strong bullish closure above the former resistance of S\$1.70 (now support) signals a new uptrend phase.
- Bullish flag formation suggests further upward continuation potential.
- Ichimoku indicator confirms a robust bullish structure.
- Stochastic Oscillator remains at elevated levels, highlighting persistent bullish momentum.
- 23-period Rate of Change (ROC) has moved above the zero line, reinforcing bullish sentiment.
- Directional Movement Index supports the strength of the uptrend.
- Trading volume shows healthy expansion, supporting sustained interest.
Strategic Outlook and Investment Rating
Sheng Siong’s expansion strategy is delivering tangible results, with consistent growth in both revenue and profit. While near-term profitability may face headwinds due to higher operating overheads from new store rollouts, the company’s long-term earnings outlook remains positive. The firm is rated “Add,” with a total return expectation of over 10% in the next 12 months, and a target price of S\$1.90.
Stock Ratings and Recommendation Framework
| Rating |
Definition |
| Add |
Total return expected to exceed 10% over the next 12 months |
| Hold |
Total return expected between 0% and +10% over the next 12 months |
| Reduce |
Total return expected to fall below 0% or more over the next 12 months |
The total expected return combines the percentage difference between the target and current price and the forward net dividend yield, with a 12-month investment horizon.
Sector and Country Ratings Explained
| Sector/Country Rating |
Definition |
| Overweight |
Positive absolute recommendation; position above market weight |
| Neutral |
Neutral absolute recommendation; position at market weight |
| Underweight |
Negative absolute recommendation; position below market weight |
Distribution of Ratings (as of March 31, 2025)
| Rating |
Coverage (%) |
Investment Banking Clients (%) |
| Add |
71.0% |
1.3% |
| Hold |
20.9% |
0.7% |
| Reduce |
8.2% |
0.4% |
A total of 551 companies were under coverage for the quarter ending March 31, 2025.
Conclusion: Sheng Siong Positioned for Continued Outperformance
Sheng Siong Group’s disciplined expansion, resilient business model, and strong technical indicators position it as a standout performer in Singapore’s retail sector. Despite the short-term pressure from new store overheads, the group’s earnings visibility remains robust, underpinned by healthy sales growth and solid execution. The “Add” recommendation and upward price targets reflect confidence in Sheng Siong’s ability to deliver sustainable returns in a dynamic market environment.
