- Sheng Siong (SGX:OV8)’s 3Q24 revenue and earnings came in at S$363m (+5% y-o-y, +8% q-o-q) and S$39m (+12% y-o-y, +16% q-o-q) respectively, bringing 9M24 revenue of S$1.1b and earnings of S$109m to 77%/81% of our 2024 estimates respectively.
3Q24 results above expectations.
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- Sheng Siong's gross margin reached another record high of 31.3% (+1ppt y-o-y), from higher fresh product sales mix, higher contributions from house brands and improved margins across both categories.
- Other income doubled to S$6m, largely from a S$3.2m increase in government grants received under the progressive wage credit scheme.
Continuing to outperform peers in sales growth.
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- We are of the view that Sheng Siong has been steadily gaining market share, as we note Sheng Siong’s sales-growth outperformance vs its peers over the past three quarters.
- China sales rose 14% y-o-y in 3Q24, led by the official opening of its 6th store in Aug 24. Competition continues to remain stiff from unregulated street hawking and wet markets. While 3Q24 recorded a loss due to new store opening costs incurred, 9M24 remained profitable.
Jelita Property acquisition to increase store count and open up additional revenue stream.
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