Sheng Siong Group Ltd. (OV8) AI Stock Analysis

• Market Cap: S$3.77B
• Dividend Yield: 2.5%
• Average Volume (3M): 2.21M
• Price to Earnings (P/E): 26.1
• Beta (1Y): 0.33
• Revenue Growth: 8.70%
• EPS Growth: 1.48%
• Country: SG
• Employees: 2,500
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Grocery Stores
• EPS (TTM): 0.03
• Shares Outstanding: 1,503,537,000
• 10 Day Avg. Volume: 2,234,800
• 30 Day Avg. Volume: 2,206,103
• PEG Ratio: 6.13
• Price to Book (P/B): 4.61
• Price to Sales (P/S): 1.73
• P/FCF Ratio: 12.28
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$2.52
• Price Target Upside: -1.56% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: S$3.00 ▲(17.19% Upside)

Sheng Siong Group Ltd. has a strong financial foundation with consistent revenue growth and robust cash flow, which are significant strengths. However, technical indicators suggest the stock may be overbought, and the high P/E ratio indicates a relatively expensive valuation. These factors contribute to a balanced overall score.

Positive Factors

Strong Cash Flow Generation

Efficient cash conversion and robust cash flow from operations provide financial flexibility and support for future investments.

New Headquarters and Distribution Center

The new facility will enhance operational efficiency and support long-term growth by consolidating headquarters and distribution functions.

Healthy Profit Margins

Strong margins indicate effective cost management and operational efficiency, supporting sustained profitability.

Negative Factors

Slight Increase in Debt Levels

While current debt levels are manageable, any further increase could impact financial flexibility and require monitoring.

Moderate Revenue Growth

Slower revenue growth compared to previous years may indicate challenges in expanding market share or increasing sales velocity.

High Valuation Concerns

A high valuation may deter new investors and limit stock price appreciation, affecting long-term investment attractiveness.

Sheng Siong Group Ltd. Business Overview & Revenue Model

Company Description

Sheng Siong Group Ltd. is a prominent supermarket chain based in Singapore, primarily engaged in the retailing of grocery products. The company operates a network of supermarkets offering a wide range of products, including fresh produce, meats, seafood, frozen foods, and household items. Established in 1985, Sheng Siong has positioned itself as one of the leading players in the grocery retail sector, focusing on providing quality products at competitive prices while catering to the diverse needs of local consumers.

How the Company Makes Money

Sheng Siong Group Ltd. generates revenue primarily through the sale of grocery items in its supermarkets. The company's revenue model is centered around retail sales, where it purchases products from suppliers and sells them at a markup to consumers. Key revenue streams include fresh food items, packaged goods, and household essentials. Additionally, Sheng Siong benefits from economies of scale due to its extensive supply chain and procurement capabilities, which allow it to negotiate better prices with suppliers. The company also attracts revenue through private label products, which typically offer higher margins compared to branded items. Significant partnerships with local and international suppliers enable Sheng Siong to maintain a diverse product assortment and competitive pricing, further enhancing its profitability.

Sheng Siong Group Ltd. Financial Statement Overview

Summary

Sheng Siong Group Ltd. exhibits a strong financial position with consistent revenue growth, healthy profit margins, and robust cash flow generation. The company's low leverage and strong return on equity further enhance its financial stability. While the debt levels have slightly increased, they remain manageable.

Income Statement

Sheng Siong Group Ltd. shows strong financial performance with consistent revenue growth and healthy profit margins. The TTM data indicates a gross profit margin of 30.83% and a net profit margin of 9.46%, reflecting efficient cost management. The EBIT and EBITDA margins are also robust at 11.84% and 16.02% respectively, indicating strong operational efficiency. The revenue growth rate of 1.63% in the TTM period suggests steady growth, although slightly lower compared to previous years.

Balance Sheet

The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.21 in the TTM period, indicating low financial leverage. The return on equity is strong at 25.75%, showcasing effective use of shareholder funds. The equity ratio stands at 60.46%, reflecting a solid capital structure. However, the slight increase in debt levels over the years warrants monitoring.

Cash Flow

Sheng Siong Group Ltd. demonstrates strong cash flow generation with a free cash flow to net income ratio of 90.87% in the TTM period, indicating efficient cash conversion. The operating cash flow to net income ratio is 75.05%, highlighting robust cash flow from operations. The free cash flow growth rate of 23.1% in the TTM period is impressive, although it has fluctuated in previous years.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.48B	1.43B	1.37B	1.34B	1.37B	1.39B
Gross Profit	456.01M	435.47M	410.53M	393.50M	393.29M	381.86M
EBITDA	236.91M	230.87M	219.65M	218.41M	214.96M	217.71M
Net Income	139.96M	137.52M	133.65M	133.30M	132.83M	138.65M
Balance Sheet
Total Assets	924.26M	935.14M	830.19M	785.12M	739.02M	692.06M
Cash, Cash Equivalents and Short-Term Investments	367.20M	353.36M	324.40M	275.50M	246.64M	253.90M
Total Debt	114.88M	125.62M	101.33M	95.65M	81.69M	75.50M
Total Liabilities	362.10M	396.80M	333.21M	329.94M	322.69M	316.96M
Stockholders Equity	558.91M	534.92M	493.77M	452.25M	413.41M	372.39M
Cash Flow
Free Cash Flow	192.96M	200.80M	178.14M	158.01M	141.01M	257.02M
Operating Cash Flow	212.35M	218.99M	188.29M	166.81M	172.70M	274.15M
Investing Cash Flow	-56.54M	-54.35M	-10.05M	-4.97M	-30.32M	-16.12M
Financing Cash Flow	-139.09M	-136.90M	-129.46M	-133.48M	-149.88M	-80.90M

Sheng Siong Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:OV8, the sentiment is Positive. The current price of 2.56 is above the 20-day moving average (MA) of 2.30, above the 50-day MA of 2.17, and above the 200-day MA of 1.88, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 87.14 is Negative, neither overbought nor oversold. The STOCH value of 86.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:OV8.

Sheng Siong Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
5JS	74 Outperform	S$516.48M	5.37	8.46%	2.70%	13.03%	35.10%
OV8	70 Outperform	S$3.77B	26.09	26.05%	2.50%	8.70%	1.48%
Q01	70 Outperform	S$517.74M	19.82	5.51%	5.56%	-0.51%	-25.57%
P34	68 Neutral	S$495.04M	14.06	10.03%	3.52%	-4.54%	-35.71%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
F03	62 Neutral	S$1.24B	33.14	9.42%	1.33%	13.97%	-49.60%

Sheng Siong Group Ltd. Corporate Events

Sheng Siong Group Secures New Site for Headquarters and Distribution Center

Sheng Siong Group Ltd. has announced that its wholly-owned subsidiary, C M M Marketing Management Pte. Ltd., has accepted a lease agreement with JTC Corporation for a new site at Sungei Kadut Street in Singapore. This site will serve as the company’s new warehouse, distribution center, and headquarters, replacing the current facility at Mandai Link. The lease term is expected to be 33 years, starting on December 18, 2025, with a rent-free period before commencement. The company plans to invest at least S$120 million in new plant and machinery at the new site within four years of the lease commencement.

The most recent analyst rating on (SG:OV8) stock is a Buy with a S$2.30 price target. To see the full list of analyst forecasts on Sheng Siong Group Ltd. stock, see the SG:OV8 Stock Forecast page.

Sheng Siong Secures Land Lease Offer from JTC

Sheng Siong Group Ltd. announced that its subsidiary, C M M Marketing Management Pte Ltd, has received a letter of offer from JTC Corporation for a 33-year lease of land at Sungei Kadut Street 1, Singapore. This strategic move could potentially enhance the company’s operational capabilities and market presence, although shareholders are advised to trade cautiously.

The most recent analyst rating on (SG:OV8) stock is a Buy with a S$2.50 price target. To see the full list of analyst forecasts on Sheng Siong Group Ltd. stock, see the SG:OV8 Stock Forecast page.