Sheng Siong Group Ltd., the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Lim Siew Khee from CGS International reiterated a Buy rating on the stock and has a S$3.40 price target.
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Lim Siew Khee has given his Buy rating due to a combination of factors linked to Sheng Siong’s defensive positioning and growth prospects. She expects government cash and voucher support, together with higher inflation, to push more households toward value-focused supermarkets, which should strengthen Sheng Siong’s sales given its competitive pricing and expanding store network.
She also forecasts steady margin improvement as operating scale and diversified sourcing help absorb higher shipping and utility costs, supporting gradual gross margin expansion. On the back of stronger per-store sales and structurally higher market share, she raised earnings estimates and increased the target price to S$3.40, arguing that the group deserves a premium valuation multiple in a volatile macro environment.
OV8’s price has also changed moderately for the past six months – from S$2.150 to S$2.970, which is a 38.14% increase.