- Maintain BUY and Target Price of SGD1.27, 18% upside. Sheng Siong is our Top Pick in the sector.
- 2Q18 results recorded the highest ever gross margin achieved in Sheng Siong’s history, mainly on stronger fresh food sales. We believe gross margin expansion is sustainable given the continued drive to push fresh food sales and penetration, as well as cut wastage.
- YTD, Sheng Siong has secured six new stores, two of which were opened only in July, and are expected to underpin sales growth in 2H18.
2Q18 Recorded Healthy Sales Growth of 5.7%
This was mainly driven by new stores – three new stores in 2H17 and five in 1H18 – as well as high SSSG. Another two new stores opened in Jul 2018, which should contribute favourably to sales growth in 2H18.
Source: RHB Invest Research - 31 Jul 2018