Broker Name and Date of Report

CGS International, October 31, 2025

Excerpt from CGS International report

Report Summary

• Sheng Siong Group (SSG) saw strong sales growth in 3Q25, with core PATMI up 6% year-on-year, driven mainly by new store openings and higher demand from government consumption vouchers.
• Despite robust expansion plans (11 new stores by end-2025), margin pressures persist due to higher operating costs, keeping valuations high and prompting CGS International to reiterate a Hold rating, with a target price raised to S\$2.40.
• SSG is enhancing logistics to support its expanding store network and plans to start construction of a new distribution center by end-2029, using internal cash reserves for funding.
• The company continues to focus on affordable pricing, operational efficiency, and ESG initiatives, such as energy efficiency and supporting local produce, to sustain market share gains.
• Financial forecasts indicate steady revenue and profit growth through 2027, but operating margins are expected to remain flat due to ongoing cost pressures.
• SSG’s current valuation is above its historical average, and the main upside risks are faster expansion and stronger margins, while downside risks include rising staff and construction costs, and increased price competition.
• Peer comparison shows SSG trades at a premium to regional grocery retailers, reflecting its strong market position but limiting immediate upside potential.

Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgsi.com