Introduction
Sheng Siong Group Ltd. is a Singapore-listed supermarket chain with over 60 outlets across the island. The company has been consistently profitable in recent years, and its stock price has performed well. However, some investors may wonder if Sheng Siong is still a good investment in 2025.
Factors to Consider
There are several factors to consider when evaluating Sheng Siong as an investment, including:
- Financial performance: Sheng Siong has a strong track record of financial performance. In the first half of 2023, the company reported a revenue of S$948.7 million, an increase of 6.3% year-on-year. Net profit grew by 11.3% to S$94.2 million.
- Industry outlook: The supermarket industry in Singapore is expected to grow in the coming years, driven by factors such as population growth and rising incomes. Sheng Siong is well-positioned to benefit from this growth, given its strong brand recognition and extensive store network.
- Competition: Sheng Siong faces competition from other supermarket chains, such as NTUC FairPrice and Cold Storage. However, the company has a loyal customer base and has been able to differentiate itself through its focus on value and convenience.
- Valuation: Sheng Siong’s stock is currently trading at a price-to-earnings (P/E) ratio of around 25. This is higher than the average P/E ratio for the industry, which is around 20. However, Sheng Siong’s growth prospects and strong financial performance may justify its premium valuation.
Pros and Cons
Here are some pros and cons of investing in Sheng Siong:
Pros:
- Strong financial performance
- Growing industry outlook
- Well-positioned to benefit from industry growth
- Loyal customer base
- Differentiated through focus on value and convenience
Cons:
- Faces competition from other supermarket chains
- Stock is trading at a premium valuation
Conclusion
Overall, Sheng Siong is a good investment for investors who are looking for a stable and growing company with a strong track record of financial performance. The company is well-positioned to benefit from the growing supermarket industry in Singapore, and its loyal customer base and focus on value and convenience should help it to continue to outpace its competitors.
Table 1: Sheng Siong’s Financial Performance
| Year | Revenue (S$ million) | Net Profit (S$ million) |
|---|---|---|
| 2019 | 1,915.6 | 193.4 |
| 2020 | 2,157.7 | 230.6 |
| 2021 | 2,580.2 | 255.6 |
| 2022 | 2,854.2 | 280.1 |
| H1 2023 | 948.7 | 94.2 |
Table 2: Industry Outlook for the Supermarket Industry in Singapore
| Year | Market Size (S$ billion) | Growth Rate (%) |
|---|---|---|
| 2022 | 13.0 | 3.5 |
| 2023 | 13.5 | 3.8 |
| 2024 | 14.0 | 3.7 |
| 2025 | 14.5 | 3.6 |
Table 3: Competition in the Supermarket Industry in Singapore
| Supermarket Chain | Market Share (%) |
|---|---|
| NTUC FairPrice | 45 |
| Sheng Siong | 20 |
| Cold Storage | 15 |
| Giant | 10 |
| Other | 10 |
Table 4: Sheng Siong’s Valuation
| P/E Ratio | Industry Average P/E Ratio |
|—|—|—|
| 25 | 20 |
