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Sheng Siong
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MambaFinancial89
Veteran |
31-Jul-2023 13:25
Yells: "Be greedy when others are fearful. " |
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DBS downgrades Sheng Siong to hold with lower TP of $1.76 despite record quarterly gross margin (31 July 2023) DBS Group Research analysts have downgraded Sheng Siong to HOLD with a lower target price of $1.76 on possible near term headwinds, such as slower store growth, high labour cost and sticky elevated utility cost. This follows the companys 2QFY2023 ended June results announcement. Based on the recent analysts briefing, the DBS analysts believe they have been too overly optimistic on their earlier FY2023/FY2024 assumptions. For one, there is a surprise spike in labour costs of $4.6 million in 2QFY2023 versus $1.5 million increase in 1QFY2023 ended March. Sheng Siong clarified that this was due to significant salary increases in order to retain and attract workers, instead of one-off bonus payout. Additionally, the company noted that the tender process for this year seems to be slower than previous years. While it has submitted a bid for tender in May, the result has yet to be announced. There has also been no news to date regarding when the six HDB leases will open for tender, the DBS analysts point out. We assumed three new stores for FY2023 and FY2024. Given the current tender progress, we believe the entire tender process could be significantly delayed. In addition, we are cognisant of the recent NTUC FairPrices aggressive bid for Punggol Drive outlet, which could be an early indication of aggressive subsequent bids. Accordingly, we cut our store count growth forecast to one and two for FY2023 and FY2024 respectively,&rdquo they add. Citi Research analyst Jame Osman expects Sheng Siongs new store opening momentum as well as a focus on expanding its higher margin house brand products portfolio to drive its earnings performance in FY2023, given the near term cost challenges around higher utilities and staff expenses. He notes that Sheng Siong is targeting to open three to five new stores over the next three to five years. For FY2023, Citi forecast a 25,000 sq ft in gross floor area additions. Osman keeps his BUY rating on Sheng Siong with a target price of $1.92. Meanwhile, CGS-CIMB Research analysts Ong Khang Chuen and Kenneth Tan note that Sheng Siong has opened one store in Kunming, China YTD. The analysts maintain their new store opening forecast at four for FY2023, although they think this could be back-loaded. CGS-CIMB reiterates their ADD call on Sheng Siong with a target price of $1.88, continue liking the counter as a defensive play amid the current backdrop of elevated inflation and economic slowdown. Link: https://www.theedgesingapore.com/capital/brokers-calls/dbs-downgrades-sheng-siong-hold-lower-tp-176-despite-record-quarterly-gross |
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Joelton
Supreme |
28-Jul-2023 09:56
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Sheng Siong H1 profit falls 3% to S$65.4 million as staff costs, utilities rise
SHENG Siong : OV8 +0.63%on Thursday (Jul 27) reported a 3 per cent decrease in net profit to S$65.4 million for the first half of 2023, from S$67.4 million in the year-ago period.
This comes as the group incurred higher operating expenses in the period, with staff costs increasing by S$6.1 million.
&ldquo Due to the competitive labour market and the requirements of the Progressive Wage Model, the group increased employees&rsquo salaries in FY2022,&rdquo it said.
Utility expenses also rose S$5.8 million after the group&rsquo s electricity supply agreement was renewed at a higher prevailing market rate last year.
As a result, earnings per share fell to 4.35 Singapore cents, from 4.48 Singapore cents in the same period last year.
However, the opening of five new stores in Singapore led to a 2 per cent increase in revenue to S$690.5 million, from S$676.8 million previously.
Gross profit margin improved 0.3 percentage point to 29.7 per cent in H1 2023, from 29.4 per cent a year ago. This was driven by an improved sales mix of products with higher margins.
Sheng Siong&rsquo s cash flow position continues to remain strong, the group said. As at Jun 30, it had a cash equivalent balance of S$289 million.
An interim dividend of 3.05 Singapore cents per share was proposed, representing a dividend payout ratio of 70 per cent. The dividend will be paid out on Aug 30.
Group chief executive officer Lim Hock Chee said the group remains committed to bringing value-for-money offerings to its consumers.
The group noted that reduced harvests induced by climate change and the onset of El Nino weather have put upward pressure on food prices.
Lim said: &ldquo The group is managing risks by diversifying its sources of supply and strengthening business ties with existing suppliers. Additionally, our expansion strategy remains intact as we seek to open stores in new and existing housing estates, capitalising on the rising number of Housing Board projects in the near future.&rdquo
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spursfan
Supreme |
27-Jul-2023 21:24
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Sheng Siong Group delivers an increase in revenue of
2.0% for 1H FY2023 on the back of new stores □ The Group?s operating costs increased due to a S$11.3 million increase in administrative expenses driven by a rise in utility and staff costs. □ Net Profit after tax for 1H FY2023 decreased by 2.9% yoy with net margin reducing marginally to 9.5% from 10.0%. □ Proposed interim dividend of 3.05 cents per share for 1H FY2023. □ In line with its store expansion strategy, the Group continues to be on the lookout for viable retail space in new and existing housing estates. https://links.sgx.com/1.0.0/corporate-announcements/8G4ZGF8N2UL0K5VQ/766797_SSG%20-%201HFY2023%20-%20Press%20Release.pdf |
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Joelton
Supreme |
21-Jun-2023 10:04
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DBS upgrades Sheng Siong to &lsquo buy&rsquo on attractive valuation, industry dynamics
DBS Group Research upgraded its call on Sheng Siong : OV8 +1.2% to &ldquo buy&rdquo from &ldquo hold&rdquo in view of the supermarket operator&rsquo s recent share price weakness, its expansion prospects and potential savings from lower electricity costs.
Its target price remained unchanged at S$1.89, reflecting a 21 times price-to-earnings (PE) multiple based on FY2023 earnings estimates, and is one standard deviation below its mean pre-Covid PE multiple.
In a report on Monday (Jun 19), the research house said Sheng Siong&rsquo s current share price presents an &ldquo attractive re-entry level on the back of positive industry dynamics and an attractive valuation&rdquo .
As at the midday break on Tuesday, shares of the group were up S$0.02 or 1.2 per cent at S$1.68.
DBS is optimistic that the group&rsquo s net profit will increase on the back of steady revenue growth and easing utility cost pressure.
Highlighting that six Housing and Development Board (HDB)-located stores with &ldquo low competition nearby&rdquo are up for tender by year-end, DBS believes that securing a spot at these locations will present growth opportunities for Sheng Siong to deliver revenue per square foot on par with its existing stores.
Sheng Siong expects to open at least two new stores by year-end and scale up its suburban HDB footprint, which enables it to enjoy low rental rates.
DBS estimates that each new store will be able to contribute S$14 million to the group&rsquo s top line and S$1.3 million to its bottom line upon full ramp up. This would translate to a mean incremental net profit per annum of S$3.8 million to S$6.4 million for Sheng Siong.
In addition, the research house anticipates electricity costs to normalise by end-2023 due to falling natural gas prices.
This will amount to an estimated S$8 million in cost savings for FY2024, provided that natural gas prices remain at current levels.
&ldquo Given the continued decline in natural gas prices, we believe Sheng Siong is well-positioned to recontract at much lower rates when its utility contract expires at end-2023,&rdquo the research house said.
DBS believes that its forecast for FY2024, which assumes a S$9 million bottom-line growth, is &ldquo achievable&rdquo .
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chinton86
Master |
18-Jun-2023 23:13
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Extremely over valued. But no one knows the MARKET. | ||||
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mr_wealth
Member |
18-Jun-2023 15:22
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Sheng Siong is the last of the three Giants to enter the digitalisation online shopping. Their grocery is also no longer cheap. In China, Dairy Farm has been working hard towards profitability for Yonghui in the past 8 years. And they do have the upper hand in various parts of China. I think SS is overvalued.
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Joelton
Supreme |
17-Jun-2023 15:21
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RHB raises Sheng Siong target to S$2.04 on attractive valuations
RHB Research on Thursday (Jun 15) raised its target price on Sheng Siong : OV8 0% to S$2.04 from S$2. It also maintained its &ldquo buy&rdquo call on the supermarket chain operator, as it believes valuations at current levels are attractive.
The new target price implies a potential 25.2 per cent upside from the counter&rsquo s last trading price of S$1.63 as at 2.55 pm on Friday. Shares of Sheng Siong were flat at the time.
The research house noted in its report that the group&rsquo s share price has declined along with the wider market, including the Straits Times Index. It said that although the group&rsquo s fundamentals &ldquo remain intact&rdquo , valuations are now one standard deviation below the mean of its historical forward price-to-earnings ratio of 16.9 times.
RHB also noted that Sheng Siong&rsquo s revenue held steady in the first quarter of 2023, outperforming the sector amid a year-on-year decline in Singapore retail sales. The group is also set to receive a full 12-month contribution from four new outlets opened in 2022.
&ldquo We therefore do not expect significant downside to our revenue forecasts,&rdquo said RHB analyst Alfie Yeo.
Due to Sheng Siong&rsquo s more diversified sourcing and sales mix enhancements, he projects the group&rsquo s gross margins to remain at levels close to 30 per cent. He also expects operating profit margins to be stable, as staff costs are &ldquo highly tied&rdquo to revenue performance.
Yeo expects Singapore&rsquo s supermarket retail sales for the second half of 2023 to be more comparable to H2 2022, since they have normalised earlier than expected.
&ldquo We had expected supermarket retail sales to normalise around May, but they rose 0.6 per cent year on year and 0.1 per cent month on month in April,&rdquo he said. He does not expect any unanticipated demand shocks or abnormal year-on-year declines of more than 5 per cent for retail sales in the sector.
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Joelton
Supreme |
13-Jun-2023 10:11
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Sheng Siong explains non-compliance, says &lsquo not necessary&rsquo to add more IDs due to group&rsquo s size
SUPERMARKET operator Sheng Siong Group on Monday (Jun 12) responded to questions over its non-compliance of a corporate governance code provision setting out that independent directors (IDs) will need to make up a majority of its board.
The Singapore Exchange Securities Trading on Jun 8 said Sheng Siong has not complied with the provision, which is relevant as its chairman is not independent, along with a provision stipulating that non-executive directors have to make up a majority of the board.
Sheng Siong&rsquo s board currently comprises 10 directors, five of whom are non-executive and independent. Chairman Lim Hock Eng is part of the management team, and is a brother of chief executive officer Lim Hock Chee.
On Monday, the company said its reason had already been disclosed in its annual report for the 2022 financial year ended Dec 31. It was stated there that the board is of the opinion that it is &ldquo not necessary&rdquo to add more IDs and non-executive directors due to the group&rsquo s current size and operations.
Noting that the IDs and non-executive directors already make up half the board, it added the board is able to &ldquo exercise objective judgement through constructive dialogue&rdquo and &ldquo no individual or group of individuals dominate its decision-making process&rdquo .
It also said lead ID Patrick Chee Teck Kwong does avail himself to shareholders when they have concerns, and leads regular meetings without the management&rsquo s presence to discuss affairs of the group.
Sheng Siong, meanwhile, has given assurance that its IDs and non-executive directors &ldquo participate actively in discussions, reviewing and assessing management&rsquo s performance&rdquo .
The group then reiterated that the board is of the view it has an &ldquo appropriate level of independence&rdquo and that its size is &ldquo appropriate&rdquo .
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JAD_Trader
Veteran |
06-May-2023 08:04
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Potential is one thing. I wonder what is the edge of SS over local players in supermarket space.
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george78
Member |
01-May-2023 11:44
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This is a multi bagger in the making. The potential in China is huge. | ||||
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Joelton
Supreme |
29-Apr-2023 21:37
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Sheng Siong&rsquo s Q1 2023 profit falls 5.2% to S$33.2 million
SHENG Siong on Friday (Apr 28) reported a 5.2 per cent fall in Q1 2023 profit to S$33.2 million from S$35.1 million in Q1 2022.
Revenue for the quarter fell 0.4 per cent to S$356.5 million from S$358 million a year prior. The slight decrease in revenue is driven by the normalisation after easing of pandemic restrictions.
Gross profit margin improved 0.1 point to 28.8 per cent in Q1 2023 from 28.7 per cent in Q1 2022. This was driven by an improved sales mix of products with higher margins.
Administration expenses increased 6.5 per cent to S$63.2 million in Q1 2023 from S$59.4 million in Q1 2022. This was mainly due to an increase in utility expenses as the supermarket company recently renewed its electricity supply agreement at a higher prevailing market rate at the end of 2022, and higher labour costs from a tight labour market.
Rising inflation and geopolitical tensions continue to dampen the economic outlook. Supply chain disruptions have eased but are expected to continue further in 2023, said Sheng Siong.
The high inflationary environment continues to impact consumers, who may choose cheaper alternatives such as buying groceries and dining at home. The company believes that this might drive sales of its house brand and improve margins as consumers lean towards cheaper products.
Sheng Siong expects continued keen competition in the supermarket industry.
&ldquo In the midst of such economic uncertainty, the group remains focused on building on its core competencies and value-for-money offerings,&rdquo said its chief executive officer, Lim Hock Chee.
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rledchg11
Member |
17-Apr-2023 11:56
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ya lor. simidaiji? got good news? did not see any annoucement... le... onz by the nice pages in Annual Report? :))) no idea....
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Cadence88
Veteran |
17-Apr-2023 09:49
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Seems to be rising since late mar, beginnig Apr. | ||||
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rledchg11
Member |
24-Mar-2023 16:10
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today... seems like some interest buyer? accumulator? any news? seems like gathering some interest :))) ... |
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Joelton
Supreme |
28-Feb-2023 10:46
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Sheng Siong H2 profit down 1.4% to $65.9m, eyes new store openings
For the full year, the group posted earnings of S$133.3 million, up 0.4 per cent from S$132.8 million in 2021.
SINGAPORE - Supermarket operator Sheng Siong Group on Monday posted a net profit of S$65.9 million for the second half of 2022, down by 1.4 per cent from S$66.9 million for the same period in 2021.
For the full year, the group posted earnings of S$133.3 million, up 0.4 per cent from S$132.8 million in 2021.
The board of directors has proposed a final cash dividend of 3.07 cents per share, down from 3.1 cents per share in 2021. Subject to shareholders&rsquo approval at the annual general meeting on Apr 28, the dividend will be paid out on May 19.
Revenue for H2 was down 3.7 per cent to S$662.7 million, while full-year revenue was down 2.2 per cent to S$1.3 billion despite the company&rsquo s store count in Singapore increasing by three.
Sheng Siong said more customers dined out following the easing in mobility restrictions that began in April last year, citing the &ldquo continued normalisation&rdquo following the Covid-19 pandemic.
For FY2022, the group achieved higher margins. Gross profit margin rose by 0.7 percentage points to 29.4 per cent year on year in FY2022, while net profit margin was up 0.3 percentage points to 10 per cent.
Other income for FY2022 also rose by 42.9 per cent to S$17.3 million due to one-off recognition of rebates from suppliers.
Sheng Siong&rsquo s chief executive Lim Hock Chee said that while sales continue to normalise from the effect of the pandemic, the current inflationary environment gives the company &ldquo a unique opportunity&rdquo to tap on consumer behaviour towards saving costs with its value-for-money proposition.
He said the group could, however, see some challenges this year that may impact operations and raise costs, which would in turn crimp the company&rsquo s margins.
&ldquo The group will continue to monitor global developments closely and, at the same time, look to enhance internal performance and increase the productivity of new and existing stores,&rdquo said Lim.
He said Sheng Siong has already secured retail space for a new store to be opened in March in Singapore, and signed a lease agreement for a fifth store in Kunming, China.
The company also said competition in the supermarket industry is expected to remain keen among both brick-and-mortar stores and online markets, particularly in the current heightened inflationary environment.
&ldquo The group will continue to look out for retail spaces in new and existing HDB housing estates, particularly in estates where the group has no presence,&rdquo it said.
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spursfan
Supreme |
27-Feb-2023 19:16
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Media Release
Sheng Siong Group delivers a stable Net Profit of S$133.6 million for FY2022 ? Revenue is down 2.2% yoy from the high base in 2021, despite the net increase of 3 stores in Singapore in FY2022. ? Gross profit margin and net profit margin for FY2022 grew by 0.7% and 0.3% respectively driven by a favorable sales mix of products with higher margins. ? Proposed final dividend of 3.07 cents per share, total dividend of 6.22 cents per share for FY2022. ? The Group continues to be committed to growth through new store openings. https://links.sgx.com/1.0.0/corporate-announcements/JRUQUNXU6AU2MQV7/748041_SSG%20-%204Q%202H2022%20-%20Media%20Release.pdf |
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rledchg11
Member |
17-Feb-2023 17:04
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4M+ shares traded... seems like moving.... " quietly" ... still got interest :) |
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fortune_cat
Member |
17-Feb-2023 13:50
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bumping this up! no interest in SS anymore? thinking of buying for dividends -.- | ||||
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tongphlp
Supreme |
25-Nov-2022 13:22
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no bonuses for staff?
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Joelton
Supreme |
28-Oct-2022 08:49
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Sheng Siong reports 4.5% y-o-y dip in 3QFY2022 net profit of $32.9 mil
Revenue for the quarter fell by 4.2% y-o-y to $333.5 million compared to the high base of $348.1 million in the 3QFY2021.
Sheng Siong Group has reported net profit of $32.9 million for the 3QFY2022 ended Sept, 4.5% lower than the net profit of $34.4 million in the corresponding period the year before.
Net profit margin (NPM) remained stable at 9.9%.
Revenue for the quarter fell by 4.2% y-o-y to $333.5 million compared to the high base of $348.1 million in the 3QFY2021.
According to the group, the lower revenue was attributable to the relaxed Covid-19 measures, which were lifted at the beginning of the 2QFY2022. As more consumers dined out, the lower figures tapered to a new normal.
In line with the lower revenue, gross profit fell 2.8% y-o-y to $98.1 million.
Gross profit margin (GPM) fell by 0.4 percentage points y-o-y to 29.4%. This was mainly due to an improved sales mix of products with higher margins.
In the 3QFY2022, the group&rsquo s operating expenses increased by $0.6 million y-o-y to $62.3 million, of which the bulk of which was largely due to an increase in administrative expenses driven by higher energy costs during the quarter.
As at Sept 30, cash and cash equivalents stood at $228.6 million.
Looking ahead, the group expects competition in the supermarket industry to remain keen especially in the heightened inflationary environment. Higher input costs such as energy expenses and excessive promotions by competitors could result in lower margins, it adds.
&ldquo The current inflationary environment is causing a significant shift in consumer behaviour towards saving costs. As a supermarket known for providing value-for-money propositions, we are uniquely positioned to capture this shift and bring good quality, fresh products to our valued consumers. Having said this, we are aware of the heightened near-term challenges arising from high inflation, Covid-19 pandemic-induced supply chain disruptions and geopolitical tensions that could increase costs and affect our margins,&rdquo says Lim Hock Chee, Sheng Siong&rsquo s group CEO.
&ldquo However, the group will continue to monitor the performance and increase productivity of all its stores working tirelessly on strengthening its core competencies. In order to capitalise on opportunities in the future, we will also remain committed to strategic expansion and remain on the lookout for retail space in estates where the group is yet to create its presence,&rdquo he adds.
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