Sheng Siong Group’s (SSG) 2Q results were within expectations. Revenue came in at S$213.0m, up 5.7% YoY of which 7.8% was contributed by the new stores, 4.2% by comparable same store sales and 0.9% by the store in China, offset by a reduction of 7.2% arising from the permanent closure of The Verge and Woodlands Block 6A stores. Correspondingly, 2Q18 gross profit increased 8.7% to S$58.1m.

2Q18 PATMI increased 6.3% to S$17.2m or 23.5% of our initial full-year forecast. As a reference, 2Q17 PATMI made up around 23.1% of FY17’s total.

We maintain BUY but place our fair value of S$1.12 under review.

Source: OCBC Research - 31 Jul 2018