[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. 

&bull Revenue rose 14.4% yoy to S$415.5 million, driven by new store openings and an improvement in comparable same store sales.

&bull Gross profit margin improved 0.2 percentage points yoy to 31.5% due to a better product mix.

&bull The Group opened four stores in 3Q FY2025, one store at Blk 221 Mount Vernon Rd in October, and plans to open another store at Leisure Park Kallang in 4Q FY2025. 

 

Mr Lim Hock Chee, the Group&rsquo s Chief Executive Officer, said, &ldquo The Group&rsquo s results over the recent quarters are a testament to our resilience against economic uncertainties. In September, we accepted JTC&rsquo s offer to lease a new site at Sungei Kadut to establish a new distribution centre and headquarters. With an expected capacity to support 120 supermarkets, the new distribution centre marks a significant milestone to support our continued expansion.

 

The Group opened four stores in 3Q2025 and another store at Blk 221 Mount Vernon Rd in October, raising the total number of new stores opened in 2025 to 10, and the year-to-date store count in Singapore to 85. Looking ahead, we will continue to prioritise expansion in areas where the Group has limited presence, to extend our reach to customers and deliver sustainable value to our shareholders. Currently, one additional store at Leisure Park Kallang is scheduled to open in 4Q2025.

 

The Group will also continue to enhance operational efficiency, maintaining prudent cost management to navigate operational pressures.&rdquo

• On-site visit of inaugural CBD store in The Cathay indicates viable new store concept and identifies less popular CBD malls as potential strategic expansion white space
• Up to 55 HDB store opportunities available through a combination of tenders at new BTO estates and relinquished stores
• SGD520mn distribution centre (DC) investment planned to support store growth ambitions, with est. annual depreciation in range of SGD26-28mn
• Raise TP to SGD2.60 on higher fwd PE of 23.7x, justified by est. 10% long-term EBIT margin 

 

Sheng Siong Group (SSG) has budgeted SGD520mn for a new 1.6mn sqft distribution centre (DC) slated for completion by end-2029. Designed to support at least 120 stores, the DC expands SSG&rsquo s logistics capacity and network reach. In this report, we address three key questions: (i) why the DC is necessary, (ii) what the investment implies for earnings, and (iii) how investors should assess SSG&rsquo s value in light of the DC.

Why is the new DC necessary?
Existing facility operating close to maximum capacity.  The current DC, completed in 2011, was originally designed to support 50 stores. Over the years, the company has invested in equipment upgrades and warehouse expansion to improve its capacity. We estimate the optimal capacity at ~70 stores. With 85 stores projected by year-end, the company is likely operating at near maximum capacity. Going forward, headroom for margin expansion could be more limited as the company will face capacity constraints regarding opportunistic buying. 

Ambition to grow to 120 stores and beyond.  As highlighted in its press release, the company expects the new DC to support at least 120 stores. Considering the utilisation of its existing DC, we believe the new one could comfortably support a meaningfully higher number of stores.

Provide additional lease runway and operational competitiveness.  Beyond boosting capacity, the new DC extends the master lease to 2058, adding 19 years compared to the current facility, which expires in 2029. It also strengthens the company&rsquo s ability to compete with NTUC FairPrice, which has upgraded its supply chain in recent years. This includes, most notably, a state-of-the-art fresh food distribution centre of about 750,000sqft completed in 2021 for over SGD23mn, and the signing of an agreement to add 30 autonomous vehicles to its distribution fleet in Oct 25.

Where do we see store count growth?
We see three key sources of new stores: (i) CBD malls, (ii) BTO sites, and (iii) relinquished stores.

CBD malls
Format of new CBD store seems well-received, opening room for potential expansion in select CBD malls.  On our visit to Sheng Siong&rsquo s first CBD outlet at Orchard (The Cathay), we observed: (i) an expanded ready-to-eat range tailored to office workers (see Fig 1) (ii) increased sponsored shelving that can drive incremental trade income (see Fig 2) and (iii) a high proportion of self-checkout lanes to optimise labour productivity (see Fig 3). Mid-weekday footfall appeared healthy for The Cathay, despite strong competition from the better situated Plaza Singapura nearby.

BTO sites
New estates provide lucrative new store opportunities.  Based on our comprehensive review of HDB site plans for upcoming BTO flats, we identified 26 supermarket tenders over the next four years (see Chart 1). Beyond the sheer number, the mapped locations show limited nearby competition, suggesting attractive unit economics (see Fig 1). Drawing on the past five years, we estimate Sheng Siong&rsquo s tender win rate at about 67% (see Chart 2), which implies securing roughly 17 of the 26 sites, or about four stores a year, in line with the company&rsquo s target of three to five annually.

Relinquished stores
U Stars and Hao Mart suffering significant losses and could relinquish more stores in coming years as they exit the market.  Based on their latest published financials, both businesses are generating negative cash flow (including lease liability payments) and are sustained by fresh shareholder injections. U Stars reported a SGD25mn loss and SGD16mn negative operating cash flow in FY23 (year ended 31 May). Hao Mart similarly reported a SGD32mn loss and SGD9mn negative operating cash flow in FY24 (year ended 31 Mar). Together, they operate 28 HDB stores and 2 private outlets, which could become takeover opportunities for Sheng Siong.

Overall, there could be up to 54 HDB store opportunities (26 stores in new BTOs and 28 from competitors) and 2 private outlet opportunities in the coming years

How will the SGD520mn investment be allocated, and what are the implications for earnings?
Majority of depreciation attributable to building and equipment.  While no specifics were shared, based on publicly available information, we estimate the potential range of the breakdown in Table 1. Accordingly, we estimate the company could incur annualised depreciation costs ranging from SGD26mn to SGD28mn  post commencement of operations at the DC in late 2029.

Mandated sale of existing DC when new DC is operational could fetch SGD100mn to offset investment cost.  As part of the agreement with JTC for the Sungei Kadut land, Sheng Siong is expected to sell the existing facility within two years from the date of the temporary occupation permit of the Sungei Kadut Property or by 17 Dec 31, whichever is earlier. Based on CommercialGuru, the rental rates for similar sized asset range between SGD14mn to SGD16mn per annum. With a nine-year lease remaining and an option to renew for another 30 years, should the company sell the asset in early 2030 at 6% discount rate, we estimate the company could earn around SGD100mn from the sale.

Expect long-term operating margin to land closer to 10%.  As highlighted in our previous  deep-dive report, we believe the current operating margin at the ~11% level could be unsustainable due to the need for capacity expansion to support growth. Based on our estimates, we believe the company could sustain an operating margin at the 9.5% to 9.9% level in 2030 when the DC is operational (see Table 2). 

What&rsquo s a fair valuation for the company?

Maintain BUY with higher TP of SGD2.60.  We believe the company deserves a valuation premium at 23.7x fwd PE based on an estimated normalised long-term EBIT margin of ~10%. Our conviction is anchored by a statistical analysis of developed market peer valuations, which indicated that the EBIT margin explains the majority of fwd PE valuation (see Chart 3). Moreover, as a highly liquid and well-managed company, we believe SSG will be a key beneficiary of MAS EQDP funding.

The location will be able to support the 120 supermarkets

 

[SINGAPORE] Supermarket operator   Sheng Siong   : OV8 -1.42% is set to move its headquarters, warehouse and distribution centre to a new site in Sungei Kadut to support its expansion plans.  

 

On Thursday (Sep 25), Sheng Siong said that the move aligns with its plans to add three new stores each year over the next 10 to 15 years and to expand and enhance its long-term warehouse management and logistics capabilities.

 

The Sungei Kadut property, which can support at least 120 supermarkets, is 2.5 times bigger than the company&rsquo s Mandai Link site, which currently houses its headquarters, warehouse and distribution centre. 

 

The Mandai property, initially designed to serve only around 50 supermarkets, was expanded in 2021. As Sheng Siong continues to expand, its supermarket network in Singapore will soon exceed the Mandai facility&rsquo s capacity, the company said.  

 

At 61,297 square metres, and with a maximum gross plot ratio of 2.5, the new site will have multiple temperature-controlled storage zones and integrated food-processing capabilities.

 

To support its expansion, Sheng Siong also intends to adopt new technology that reduces manual handling, minimises error and increases workplace safety. This will strengthen its warehouse management operations and improve cost efficiency, the group said.

 

To this end, investments will be made in advanced warehousing and distribution automation technology, such as automated storage and retrieval systems, robotics and smart inventory management. 

 

On Wednesday, Sheng Siong&rsquo s wholly owned subsidiary CMM Marketing Management accepted an offer by JTC Corporation to lease the Sungei Kadut property. There was also a related offer from JTC in relation to the assignment of the Mandai Link property to Sheng Siong&rsquo s other wholly owned subsidiary, MDL Property. 

 

JTC&rsquo s granting of the lease of the Sungei Kadut property to CMM is conditional upon several requirements being satisfied. 

 

The lease for the Sungei Kadut property is expected to run for 33 years, contingent upon conditions. It begins on Dec 18, 2025, but Sheng Siong will be granted possession of the property around two months before that. Rent will be free before the commencement date. 

 

CMM is required to fulfil a declared investment of at least S$120 million within four years from Dec 18, 2025, on new plant and machinery. 

 

The estimated investment cost for the new property is around S$520 million and will be funded by internal resources, as well as external financing, including borrowing, Sheng Siong said. 

 

This sum covers rent for the lease term alongside costs for plant and machinery, building and construction, as well as installing solar panels, among other expenses.

Revenue grows 7.1% to S$764.7 million, from S$714.2 million

 

[SINGAPORE] Supermarket operator Sheng Siong : OV8 -0.47% reported a 3.5 per cent increase in H1 2025 net profit to S$72.3 million, from S$69.9 million in H1 2024 on Wednesday (Jul 30).

 

Revenue for the period grew 7.1 per cent to S$764.7 million, from S$714.2 million. This was mainly driven by the opening of 11 new stores in the first half of 2025 and in 2024.

 

Gross profit also rose 9.6 per cent to S$235.6 million, from S$215 million. Gross profit margins increased to 30.8 per cent, from 30.1 per cent. The improvements were driven by a better sales mix and efforts to mitigate rising business operation costs.

 

The board of directors proposed an unchanged interim dividend of S$0.032 per share, payable on Aug 29.

 

&ldquo Backed by a store count of 82 as of July 2025, we will continue to prioritise expansion in areas where the group has limited presence,&rdquo said Lim Hock Chee, CEO, Sheng Siong.

 

Macroeconomic uncertainties, cautious consumer spending and a tight labour market are some challenges ahead for the supermarket operator. Regulatory requirements such as sustainability and climate reporting are also expected to add to operational expenses.

 

Sheng Siong will prioritise improving its sales mix while looking to technology to enhance efficiency and productivity.

 

&ldquo In parallel, we remain focused on strategically tendering for new stores to further strengthen our presence and extend our reach to deliver sustainable value to our shareholders,&rdquo said Lim.

Rival DFI&rsquo s S$125 million sale of Singapore Cold Storage, Giant grocers may allow Sheng Siong to gain market share

 

[SINGAPORE] Maybank has initiated coverage on supermarket operator Sheng Siong, assigning it a &ldquo buy&rdquo call and a target price of S$2.30. 

 

This represents a premium of 10.6 per cent over its last closing price of S$2.08 on Friday and implies a price-to-earnings ratio of 23 times for 2025 and 21 times for 2026. 

 

In a report on Sunday (Jun 20), Maybank analyst Hussaini Saifee wrote: &ldquo Rival DFI Retail Group&rsquo s S$125 million sale to Malaysia&rsquo s Macrovalue signals a retreat from Singapore&rsquo s supermarket space and, in our view, creates a market share opportunity for Sheng Siong.&rdquo  

 

Jardine Matheson-owned DFI had in March announced the sale of its Singapore food business, including 48 Cold Storage and 41 Giant stores, to the Malaysian conglomerate.

 

Sheng Siong&rsquo s revenue could log a 6 per cent compound annual growth rate (CAGR) on the back of industry growth of 4 per cent and market share gains from its competitor&rsquo s restructuring, Saifee wrote. 

 

The group&rsquo s net profit after tax is estimated to grow at a CAGR of 8 per cent, which is &ldquo highly defensible&rdquo and places it in the upper-tier of domestic names and regional peers, he added.  

 

Market share opportunity on DFI retreat

The ongoing restructuring of Sheng Siong&rsquo s competitors, amid Macrovalue&rsquo s takeover of DFI&rsquo s Cold Storage and Giant stores, presents an opportunity for &ldquo medium-term growth in market share&rdquo , Saifee wrote. 

 

&ldquo In the past three years, Sheng Siong has gained 2.7 percentage points in revenue share and could benefit further if Macrovalue prioritises Cold Storage over Giant due to capital constraints,&rdquo he wrote. 

 

Giant&rsquo s focus on the mass market segment would mean that its ongoing rationalisation would likely benefit Sheng Siong, which targets a similar customer base, he added. 

 

&ldquo Our mapping shows a 68 per cent chance of Sheng Siong gaining over NTUC from potential Giant closures,&rdquo Saifee said.  

 

This comes as Sheng Siong remains focused on expansion, with the group opening six to 10 stores over 2024 and 2025, he said. 

 

&ldquo We expect Sheng Siong to add five to six new stores in 2026 to 2027, partially helped by (Giant&rsquo s) rationalisation.&rdquo  

 

Limited leakage from e-grocery competition

Saifee noted that leakage from competition posed by online grocers should be &ldquo limited&rdquo .

 

He noted that Singapore&rsquo s e-grocery market is already mature (with) 80 per cent of residents already (shopping) online, limiting further structural shifts.  

 

Moreover, offline groceries have been predicted to grow at a CAGR of 3 per cent for 2024 to 2029, matching gross domestic product, he said. 

 

&ldquo The city&rsquo s compact layout supports in-person shopping. Sheng Siong&rsquo s prices are 10 per cent to 21 per cent lower than e-grocers, and its fresh offerings, live seafood, and long hours drive footfall.&rdquo  

 

Additionally, food trends such as consumers cutting back on delivery due to higher costs should support the stable growth of supermarkets, he said.