Broker: CGS International
Date of Report: July 31, 2025

Singapore Retail Market Outlook: Bullish Signals for Suntec REIT and Steady Growth for Sheng Siong Group

Market Overview: US Economic Activity Rebounds, Singapore Retail in Focus

The latest retail research from CGS International highlights a shifting economic landscape, with notable rebounds in US economic activity and key updates from top Singapore-listed stocks. The report focuses on performance insights for Suntec Real Estate Investment Trust (Suntec REIT) and Sheng Siong Group (SSG), providing in-depth technical and fundamental analysis for investors and market watchers.

US Economic Snapshot: Modest Rebound Supports Cautious Optimism

– US inflation-adjusted GDP grew at an annualized 3% in Q2, reversing a 0.5% contraction in the prior quarter. – Net exports contributed 5 percentage points to GDP growth, offsetting prior weakness from a surge in imports. – Consumer spending, which makes up two-thirds of GDP, rose by 1.4%, marking the slowest back-to-back quarterly growth since the pandemic era. – Business investment growth moderated, and final sales to private domestic purchasers increased by just 1.2%, the slowest pace since late 2022. – These numbers suggest that while headline GDP is recovering, underlying demand is softening, potentially influencing upcoming Federal Reserve decisions.

Sheng Siong Group: Earnings Resilience and Expansion on Track

The Singapore supermarket operator Sheng Siong Group (SSG) continues to demonstrate stable performance and prudent expansion. Here are the key takeaways from its latest results:

• Revenue: S\$361.7 million in Q2 2025, up 7% year-on-year.
• PATMI (Profit After Tax and Minority Interests): S\$33.8 million, a marginal increase of 0.5% year-on-year.
• Gross Margin: Improved by 50 basis points, attributed to a better sales mix.
• Net Margin: Compressed by 60 basis points due to higher overheads linked to new store openings.
• Store Expansion: Seven new stores opened year-to-date, with another planned for Q3 2025.
• Dividend: Interim dividend maintained at 3.20 Singapore cents per share, translating to an attractive 3% annualized yield.

Despite margin pressures from expansion, SSG’s disciplined growth and consistent dividend payout underscore its defensive position in the Singapore retail sector.

Suntec Real Estate Investment Trust: Technical Buy with Bullish Reversal Confirmation

Suntec REIT, a prominent commercial real estate trust specializing in income-generating retail and office assets, has emerged as a technical standout. The report delivers a comprehensive technical analysis, forecasting a bullish reversal and presenting clear trading parameters for investors.

Technical Analysis Snapshot

Key Technical Indicators and Signals

• The stock remains within a larger descending channel but has confirmed an inverted head and shoulders formation following a robust breakout above the S\$1.15 resistance (now support) level.
• Early bullish signals are visible on the Ichimoku Cloud indicator.
• The MACD (Moving Average Convergence Divergence) has performed a bullish crossover at the bottom, with a positive histogram.
• The Stochastic Oscillator confirms an oversold crossover, supporting the bullish case.
• The 23-period Rate of Change (ROC) is positive, indicating upward momentum.
• The Directional Movement Index (DMI) reflects steady bullish strength.
• Volume has spiked in anticipation of a potential breakout.

These technical factors collectively confirm a bullish reversal for Suntec REIT, suggesting multiple upside targets for traders and investors.

Recommendation Framework and Ratings Distribution

CGS International employs a clear and investor-centric recommendation system:

• Add: Total return expected to exceed 10% over the next 12 months.
• Hold: Total return expected between 0% and +10% over 12 months.
• Reduce: Total return expected to fall below 0% over 12 months.

As of June 30, 2025, the distribution of stock ratings among the 561 companies under coverage was:

Conclusion: Strategic Insights for Singapore Retail Investors

The July 31, 2025, report from CGS International underscores a cautiously optimistic outlook for the Singapore retail sector. Suntec REIT’s confirmed bullish technical reversal and multiple upside targets present an attractive trading opportunity, while Sheng Siong Group continues to deliver steady earnings and disciplined expansion. As macroeconomic conditions evolve and domestic demand signals soften, investors are advised to monitor both technical and fundamental developments for informed decision-making in the months ahead.