Sheng Siong - Phillip Securities 2023-05-08: Lagged Impact From Inflation

Sheng Siong - Lagged Impact From Inflation

Sheng Siong (SGX:OV8) | SGinvestors.ioSheng Siong (SGX:OV8)
  • Sheng Siong (SGX:OV8)'s 1Q23 results were within expectations. Revenue and PATMI were 26%/25% of our FY23e forecast. PATMI declined 5.3% due to higher operating expenses namely electricity and staff cost.
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  • The weakness in same-store sales has improved from a decline of 3.6% in 1Q23 to 1H22 negative 7.0%. Higher electricity expenses of an annualised S$10mil will be a significant drag on operating margins in FY23e. The offset will be higher interest income.
  • We maintain our FY23e earnings forecast for Sheng Siong but downgrade our recommendation from BUY to ACCUMULATE due to the recent performance of Sheng Siong's share price.

The Positive

New stores and interest income supported earnings.

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  • Finance income spiked by S$2.3mil y-o-y in 1Q23 to S$2.7mil. Sheng Siong’s cash hoard is benefiting from higher interest rates. The cash is parked in fixed deposits.

The Negative

Lagged negative effects of inflation.

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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 | 2023-05-08

Read also Phillip's most recent report:
2024-03-01 Sheng Siong - Lack Of New Stores.

Previous report by Phillip:
2023-10-30 Sheng Siong - Same-store Sales Inching Up.

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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