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Sheng Siong Group - OCBC Investment 2022-04-28: Moving Towards New Normal

SHENG SIONG GROUP LTD (SGX:OV8) | SGinvestors.io SHENG SIONG GROUP LTD (SGX:OV8)

Sheng Siong Group - Moving Towards New Normal

  • New store sales were the key revenue driver.
  • Sheng Siong expects to open 2 new stores in 2Q22.
  • Gross profit margin rose to 28.7%.



Sheng Siong's 1Q22 revenue and PATMI rose 6.0% and 15.0% respectively

  • Sheng Siong (SGX:OV8)’s 1Q22 revenue rose 6.0% y-o-y to S$358.0m, contributed by both new stores (+0.3% y-o-y) and comparable same store sales (+5.7% y-o-y). Gross profit margin increased by 1.0 ppt y-o-y to 28.7% in 1Q22, largely due to improved sales mix.
  • PATMI grew 15.0% y-o-y to S$35.1m, broadly in-line with our expectations as we expect sales to taper off in the coming quarters as Singapore reopens.


No new store was open in 1Q22

  • As of 31 Mar 2022, Sheng Siong has 64 stores in Singapore and four stores in China. No new store was open in 1Q22.
  • Recall that Sheng Siong won three tenders last year but only opened one new store in 4Q21. Management mentioned that they would open the remaining two stores in 2Q22. We understand that Sheng Siong submitted one tender recently and is pending the bidding outcome.


Demand could normalize as Singapore transits to new normal life with COVID-19






Chu Peng OCBC Investment Research | https://www.iocbc.com/ 2022-04-28
SGX Stock Analyst Report HOLD DOWNGRADE BUY 1.620 SAME 1.620



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