Broker Name: CGS International
Date of Report: March 3, 2026
Excerpt from CGS International report.
- Sheng Siong Group (SSG) was upgraded to “Add” with a higher target price of S\$2.97, reflecting improved earnings forecasts, a robust pipeline of new store openings, and gross margin expansion driven by economies of scale.
- FY25 results were strong, with revenue up 10% and gross margin at 31.3%—the highest since 2021—supported by new stores and better operational efficiencies, offsetting higher staff costs.
- SSG plans to open more stores in both HDB and private malls, with 9-7 new stores expected in FY26F/27F, and is exploring further opportunities for expansion.
- The company’s procurement and operational improvements are expected to further lift margins, while risks include rising staff and construction costs and increased competition.
- Financial summary shows steady revenue and profit growth, with strong cash position and returns, and continued high dividend payout ratio.
- ESG efforts include supporting local produce, energy efficiency initiatives, and maintaining affordability for consumers, though energy and emissions intensity rose slightly in FY24.
- Relative to peers, SSG trades at a premium P/E but delivers robust margins, ROE, and consistent growth.
Report Summary:
- Sheng Siong Group continues to deliver growth through store expansions and operational efficiencies, leading to higher margins and earnings, with opportunities in both public and private retail spaces. The company remains focused on ESG initiatives and maintains a strong financial position, though it faces risks from rising costs and competition.
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.cgs-cimb.com
