Sheng Siong Group - A Defensive Play
SHENG SIONG GROUP LTD (SGX:OV8)
- 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 SGinvestors.io -
- 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 SGinvestors.io -
- 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
- Read more at SGinvestors.io.
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 @ https://www.iocbc.com/.
Chu Peng OCBC Investment Research | https://www.iocbc.com/ 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
