However, DBS argues the supermarket operator&rsquo s 2026 growth has already been priced in

 

[SINGAPORE] CGS International (CGSI) upgraded Sheng Siong Group to &ldquo add&rdquo from &ldquo hold&rdquo , citing a stronger-than-expected pipeline of new stores and sustained expansion in gross margins.

 

In a note on Tuesday (Mar 3), the research house raised its target price on the supermarket operator to S$2.97, from S$2.40. The move comes as   Sheng Siong   : OV8 +0.38% posted an 8.7 per cent rise in net profit for the full year ended Dec 31, 2025 to S$149.5 million, supported by a record number of new store openings.

 

CGSI analyst Meghana Kande highlighted that the group&rsquo s gross margin improved by 80 basis points year on year to 31.3 per cent in FY2025, the strongest uplift since 2021. This was driven by economies of scale from a larger network and an improved sales mix.

 

Looking ahead, CGSI believes operational efficiencies could drive a further 50 basis points of margin improvement annually over FY2026 and FY2027, helping to mitigate rising staff costs. Consequently, the broker raised its earnings per share estimates by 3 to 9 per cent for the forecast period.

 

The upgrade is underpinned by an aggressive expansion strategy. Sheng Siong ended 2025 with 12 new stores, beating CGSI&rsquo s expectations of 11.

 

Its management also identified nine upcoming tenders with the Housing & Development Board and expressed interest in opportunities within private malls. Accordingly, CGSI raised its new store forecasts to nine units for FY2026 and seven for FY2027, up from six and five, respectively.

 

However, Kande noted potential downside risks, including higher staff costs, stiffer price competition and rising construction costs for the group&rsquo s new distribution centre.

 

RHB also expressed a bullish view on the counter, maintaining a &ldquo buy&rdquo call and raising its target price to S$3.02 from S$2.72. Analyst Alfie Yeo pegged the new target to a price-to-earnings ratio of 25 for 2026, up from 23, citing positive fund flows that are expected to support Singapore market valuations.

 

From Sheng Siong to Seatrium, here are some potential winners and losers from Budget 2026

 

Yeo also emphasised that the 12 stores opened in FY2025 will contribute a full 12 months of earnings in FY2026, acting as a key growth driver. However, he cautioned that slower-than-expected store openings or lower sales demand could pose risks.

 

DBS remains cautious

In contrast, DBS Group Research on Monday maintained a &ldquo hold&rdquo with an unchanged target price of S$2.60, arguing that positive tailwinds have already been priced in.

 

Analyst Chee Zheng Feng forecast growth to peak in the first quarter of 2026, supported by Chinese New Year and SG60 vouchers. However, he predicts this momentum will slow later in the year as Sheng Siong will be comparing its performance against a particularly strong period in 2025, while the closure of two outlets will further weigh on sales.

 

The bank&rsquo s research arm also trimmed the supermarket operator&rsquo s FY2026-2027 earnings estimates by 2 per cent, citing higher staff costs associated with the Progressive Wage Model. Chee noted that Sheng Siong&rsquo s management front-loaded wage increases in September 2025 to qualify for government subsidies, which he said will elevate near-term costs.

 

On expansion, he also warned that Sheng Siong might face stiffer competition in new estates, noting NTUC FairPrice&rsquo s &ldquo apparent willingness to bid aggressively&rdquo in recent tenders. However, he still sees opportunities for Sheng Siong to secure replacement sites from competitors exiting the market.

Increase in earnings comes as an improved sales mix and higher revenue offset rising operating costs

 

[SINGAPORE] Supermarket operator Sheng Siong delivered a 14 per cent higher net profit of S$77.1 million for H2 FY2025 from S$67.6 million previously. 

 

This comes as an improved sales mix and higher revenue offset rising operating costs.

 

In the financial results published on Friday (Feb 27), the operator posted a revenue of S$805.3 million for H2 FY2025, up 12.7 per cent from S$714.5 million in the previous corresponding period.

 

Administrative expenses and selling and distribution expenses also rose during the period. Administrative expenses were up 4.9 per cent at S$32.2 million, while selling and distribution expenses were 14.8 per cent higher at S$141.1 million.

 

It attributed these higher expenses to a larger workforce from new store openings, higher variable bonuses due to improved financial performance, and a salary hike for retail worker in September 2025 to meet Progressive Wage Model requirements.

 

Earnings per share for the half year stood at S$0.0513, higher than the S$0.045 in the prior year.

 

A final dividend per share of S$0.038 was recommended &ndash up from S$0.032 in FY2024. It will be paid out on May 15, subject to shareholders approval.

 

The total dividend for the year, inclusive of the interim dividend of S$0.032, is S$0.07, compared with S$0.064 for FY2024.

 

For FY2025, revenue was 9.9 per cent higher at S$1.6 billion from S$1.4 billion previously, primarily driven by the opening of 12 new stores in FY2025 and six in FY2024 in Singapore, as well as the improved performance of existing stores.

 

The earnings for the full year increased by 8.7 per cent to S$149.5 million from S$137.5 million in FY2024.

 

As at end of 2025, Sheng Siong had a total of 87 stores in Singapore, and aims to open three to five new stores every year.

 

Meanwhile, the tender results for another four stores from the Housing & Development Board are pending, while another three tenders are open for bidding. The company noted it will close two stores at Elias Mall and Thomson Imperial Court by mid-2026 as their leases end these outlets accounted for 2.8 per cent of revenue last year.

 

&ldquo Having opened 12 new stores and entering an agreement with JTC to establish a new distribution centre in FY2025, we remain confident in future expansion opportunities to deepen our presence across Singapore,&rdquo said Lim Hock Chee, CEO of Sheng Siong.

 

Sheng Siong noted that consumers in Singapore are expected to remain cautious in their spending amid concerns about the high cost of living, which bodes well for its house brands and promotional items. 

 

It added that government support measures in Budget 2026, including various vouchers, are expected to sustain consumer spending momentum.

 

The Progressive Wage Model requirements will increase labour costs over time and the implementation of the Beverage Container Return Scheme, along with sustainability-related initiatives and regulations will add complexity and costs. 

 

The opening of the Johor Bahru-Singapore Rapid Transit System may influence consumer expending patterns.

 

Sheng Siong said that it would monitor developments and assess implications of the new cross-border transit system when it opens.

 

It added that it will &ldquo exercise prudence&rdquo in opening new stores in China, given the competitive landscape, and will focus on improving the performance of existing stores.

 

[SINGAPORE] In recognition of their loyalty, local supermarket chain Sheng Siong has awarded its long-serving employees with gold coins.

 

Sheng Siong has more than 80 stores islandwide, with the majority of its outlets in the heartland.

 

The Straits Times understands that employees with five years of service were given 20g of gold, while those with 10 years of service got 30g. Staff members with 15 years of service got 40g, and those with 20 years of service got 100g.

 

At current prices, a 100g gold bar is expected to be worth US$14,400 (S$18,500).

 

Gold has proven to be an increasingly more valuable commodity and is set to continue on this trajectory in 2026.

 

Images shared on social media platform Xiaohongshu on Dec 20 and 21 showed Sheng Siong staff receiving certificates of appreciation, along with engraved gold coins.

 

The supermarket chain did not disclose how many coins were awarded, or what their monetary value was, when approached by ST.

 

A Sheng Siong annual report showed that 444 staff members received long service awards in 2024, with a record-breaking 92 employees recognised for 20 years of service.

 

The chain, led by chief executive Lim Hock Chee and chairman Lim Hock Eng, is no stranger to being a generous employer.

 

In the midst of the Covid-19 pandemic in 2021 &ndash a time when Sheng Siong saw higher demand for its offerings &ndash staff members were awarded up to 16 months&rsquo bonus following strong earnings by the company.

 

The chain has had a profitable 2025 so far, with its net profit rising 11.9 per cent to $43.7 million in the third quarter, which ended on Sept 30

There will be no changes to the constituents of the STI following the December 2025 review

 

[SINGAPORE] Hospitality player CapitaLand Ascott Trust and supermarket chain operator Sheng Siong Group will be joining the Straits Times Index&rsquo s (STI) reserve list, following the December quarterly review.

 

They will take the place of two companies that will be exiting: food and agricultural giant Olam Group and investment management company Yangzijiang Financial, which were added to the list in the September 2025 review.

 

There will be no changes to the constituents of the STI after the latest review, the Singapore Exchange (SGX) said on Thursday (Dec 4).

 

CapitaLand Ascott Trust (Clas) had previously been on the reserve list before its exit in September.

 

The STI reserve list is made up of the five highest-ranking non-constituents of the STI by market capitalisation. 

 

Stocks on the reserve list replace STI constituents that become ineligible as a result of corporate action before the next quarterly review.

 

The other three companies on the reserve list are Keppel Real Estate Investment Trust (Keppel Reit), NetLink NBN Trust and Suntec Reit.

 

The changes take effect at the start of business on Dec 22. The next review takes place in March 2026.

 

FTSE Russell partners the Singapore Exchange and SPH Media Trust to jointly calculate the STI.

 

The index is used as the basis for a range of financial products, including exchange-traded funds, warrants, futures and other derivatives. 

 

It is reviewed quarterly in accordance with the index ground rules, and to facilitate the inclusion of eligible initial public offering stocks.

The surge comes amid higher third-quarter net profit and its recent expansion moves

 

[SINGAPORE] Shares of supermarket operator   Sheng Siong   : OV8 +6.47% rose on Monday (Nov 3) morning after the mainboard-listed group posted a nearly 12 per cent boost to third-quarter earnings compared with the year-ago period.

 

As at 9.50 am, the counter had risen by as much as 8.2 per cent or S$0.19 to S$2.51 in intra-day trade, with some 3.4 million shares having changed hands. This is the highest price Sheng Siong shares have reached since it was listed on the Singapore Exchange in August 2011, based on data from ShareInvestor and Yahoo Finance. 

 

The counter ended the day at S$2.47 &ndash also a record &ndash up 6.5 per cent or S$0.15, with close to 10.9 million shares having changed   hands. 

 

Q3 earnings and expansion

On Oct 30, Sheng Siong reported that its net profit had risen 11.9 per cent to S$43.7 million for its third quarter ended Sep 30, from S$39.1 million in Q3 2024. 

 

This translated to an 11.9 per cent increase in earnings per share to S$0.0291 for the quarter, from S$0.026 in the year-ago period. 

 

For the three months, its revenue grew 14.4 per cent to S$415.5 million, from S$363.2 million previously. 

 

The improvements were attributed to an increase in its number of stores in Q3, up from 79 in the previous corresponding quarter.

 

The improvements were attributed to an increase in its number of stores to 90 in the quarter, up from 79 in the previous quarter. Comparable same-store sales also improved by 4.4 per cent on the year. 

 

Its gross profit was up 15.2 per cent year on year at S$131.1 million, from S$113.8 million. 

 

The company in September leased a new site in Sungei Kadut to house its headquarters, warehouse and distribution centre. The move from its Mandai Link site to the 61,297 square metre property &ndash which is 2.5 times bigger and can support at least 120 supermarkets &ndash will support its expansion and long-term growth. 

 

Sheng Siong opened four stores in Q3 and one in October, taking its store count in Singapore to 85.

 

Looking ahead, the group expects grocery demand to stay resilient, with consumer spending in supermarkets and heartland shops supported by CDC and SG60 vouchers, which are accepted at Sheng Siong supermarkets. However, it noted that intense competition may pressure margins.