Sheng Siong Group - A Solid Year, But Tough Comps Ahead
- Sheng Siong (SGX:OV8)’s 4Q21 net profit of S$32.5m (-5.3% q-o-q, +1.4% y-o-y) was slightly above expectations. Key positive was continued uptrend in gross profit margin to a record 29.4%. Total dividend for FY21 was S$0.062 (70% dividend payout), implying a dividend yield of ~4.1%.
- We see tough comps for FY22F, with elevated demand set to taper as Singapore eases COVID-19 restrictions in the coming months. Store openings could partially offset the impact – we note that Sheng Siong secured 3 new leases in 4Q21 after a 1.5-year hiatus.
- We raise our FY22-23F earnings per share forecasts for Sheng Siong by 5.4%-6.3%. Our target price for Sheng Siong is raised to S$1.60 as we roll forward our valuation base year, and is now based on 21x FY23F P/E (10-year historical mean).
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
ONG Khang Chuen CFA CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2022-02-24 2022-02-24
Read also CGS-CIMB's most recent report:
2022-04-27 Sheng Siong Group - Good Quarter But Tougher Times Ahead
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