Sheng Siong Group - OCBC Investment 2023-01-30: A Defensive Play

Sheng Siong Group - A Defensive Play

  • Grocery demand remains resilient during economic downturns.
  • Healthy gross margin growth.
  • A potential hedge against inflation and economic slowdown.

Sheng Siong reported continued margin improvement

  • Sheng Siong (SGX:OV8)’s gross margin expanded over the years from 26.8% in 2017 to 29.4% in 3Q22, underscoring the effectiveness of Sheng Siong’s pricing strategy and cost management.
  • Read this at -
  • Sheng Siong also benefitted from sourcing a diversified base of supplies from overseas, which helped mitigate cost pressures amid rising inflation.

Sales normalised in 3Q22 but was still higher than its pre-COVID levels

  • Read this at -
  • Sheng Siong signed a lease agreement for new store in Kunming, China in Jan 2023. This will bring Sheng Siong’s store count to 67 in Singapore and 5 in China, compared to 59 stores in Singapore in 2019. Sheng Siong will continue to seek growth through continuous expansion of stores.
  • As the tender process and construction of HDB flats return to normal, we believe Sheng Siong’s target of opening 3-5 new stores each year is achievable.

Fair value estimate of S$1.86

  •

Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @

Chu Peng OCBC Investment Research | 2023-01-30

Read also OCBC's most recent report:
2023-03-01 Sheng Siong Group - Healthy Gross Profit Margin.

Price targets by 5 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

SGX Stock / REIT Search


Trust Bank God Of Fortune Referral Code PGKPSWAE Trust Bank Referral Code 🧧