- We like Sheng Siong for its earnings growth momentum, attractive valuation (near -1 standard deviation or ~17x from its historical mean forward P/E of ~19x), strong cashflow generation, stable balance sheet, and good dividend payout.
- - Read this at SGinvestors.io -
3Q24 net profit above on better sales mix.
- Sheng Siong (SGX:OV8)'s 3Q24 revenue came in at S$363m (+5% y-o-y) while earnings rose 12.6% y-o-y to S$39m – above expectations. Revenue was in line with estimates, with growth largely led by four new stores and SSSG of 1.5% y-o-y.
- Gross margins outperformed our estimates at 31.3% on better sales mix. EBIT was also above expectations at S$46m (+16% y-o-y) due to better gross margin and higher progressive wage credit grant from the Government. Operating margins improved 1.2ppts to 12.6%.
Raise FY24F-26F’s earnings by 6% each.
- - Read this at SGinvestors.io -
- Based on the current run rate, we have imputed higher gross margin assumptions, which results in lifting our FY24F-26F earnings forecast for Sheng Siong by 6% each.
Expect growth to be driven by store network.
- Read more at SGinvestors.io.
