Sheng Siong - Phillip Securities 2023-03-06: New Stores, House Brands, Share Gains For Growth

Sheng Siong - New Stores, House Brands, Share Gains For Growth

  • Sheng Siong (SGX:OV8)'s 4Q22 results were within expectations. Excluding a one-off marketing rebate of S$6mil, FY22 revenue and PATMI were 101%/100% of our forecast.
  • Sales was supported by the return of new stores. The number of new stores increased by three to 67 and raised retail area by 5.4% in FY22.
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  • With re-opening and dining out, fresh food sales mix may hit the ceiling in the near term. A future catalyst will be China. Contribution is small currently with 4 stores, but we expect a planned roll-out to 15-20 stores to achieve scale.
  • We raised our FY23e earnings forecast for Sheng Siong by 6% to S$135.4mil on more resilient margins and a higher store count. Our BUY recommendation for Sheng Siong is maintained.

The Positive

Back to new stores for growth.

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  • Separately, the average size of the store is also larger with a minimum of 5,000 sft.

The Negative

Gross margins may hit a ceiling temporarily.

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

Paul Chew Phillip Securities Research | 2023-03-06

Read also Phillip's most recent report:
2023-07-30 Sheng Siong - Back To Revenue Growth.

Previous report by Phillip:
2023-05-08 Sheng Siong - Lagged Impact From Inflation.

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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