Sheng Siong Group - CGS-CIMB Research 2022-02-24: A Solid Year, But Tough Comps Ahead

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 @

ONG Khang Chuen CFA CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | 2022-02-24

Read also CGS-CIMB's most recent report:
2022-10-28 Sheng Siong Group - A Shelter In Times Of Uncertainty.

Previous report by CGS-CIMB:
2022-07-29 Sheng Siong - Another Quarter Of Record Gross Margin.

Price targets by 4 other brokers at Sheng Siong Target Prices.
Listing of research reports at Sheng Siong Analyst Reports.

Relevant links:
Sheng Siong Share Price History,
Sheng Siong Announcements,
Sheng Siong Dividends & Corporate Actions,
Sheng Siong News Articles

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