Sheng Siong - Higher net profit with more store openings

Higher net profit

Sheng Siong reported 1Q 2025 net profit of S$38.5 million, an increase of 6.1% from S$36.4 million in 1Q 2024. 

The higher net profit was driven by a 7.1% year-on-year growth in revenue to S$403 million in 1Q 2025. 

The increase was driven by contributions from eight new store openings in 1Q 2025 and 2024, as well as higher festival sales during Hari Raya in March. 

Comparable same store sales grew at 0.1% year-on-year across 69 existing stores in Singapore, moderating from the year-on-year growth of 1.4% in 2H 2024.

Net profit margin stable

Sheng Siong reported net margin of 9.6% in 1Q 2025, stable from its margin of 9.7% in 1Q 2024. 

The company’s gross margin rose to 30.3% in 1Q 2025 from 29.4% in 1Q 2024, due to enhancements to its sales mix, which helped to offset higher operating costs. 

Sheng SIong’s operating costs rose due to an 8.6% year-on-year increase in administrative expenses and 13.3% year-on-year increase in selling and distribution expenses.

These were mainly driven by higher staff costs from an increase in variable bonuses resulting from better financial performance, enhanced employment benefits and more employees hired to support new stores.

Higher other income

Net profit was also supported by an increase in other income to S$4.7 million in 1Q 2025 from S$4.0 million in 1Q 2024.

The higher other income was driven by higher rental income from expanded lease space and the receipt of government grants under the Progressive Wage Credit Scheme (PWCS).

More new stores

Sheng Siong opened two new stores in 1Q 2025, bring the total number of stores to 77. It has secured six new stores, and aims to open at least three new stores per year. 

Sheng Siong continues to seek growth through continuous expansion of its network of stores in Singapore, particularly in areas where it does not have a presence currently. 

It was successful in four of the six recent HDB tenders, and is pending results of four additional tenders. It has also secured two private retail locations at Kinex as well as CATHAY building.

China was loss-making in 1Q25

With six stores in China, Sheng Siong’s China operations contributed 2.8% of the company’s revenue in 1Q 2025.

However, its China operations were loss-making in 1Q25 as the 6th store which opened in 2024 made a loss due to high operating expenses. 

Strong cash position

Sheng Siong cash balance increased to S$366.9 million as at 31 March 2025 from S$353.4 million as at 31 December 2024, with cash flow from operating activities of S$10.1 million generated in 1Q 2025.

Focused on operational efficiency and margin enhancement

Sheng Siong is targeting to enhance its margin through ongoing initiatives to automate work processes and ensure diversified sources of supply. 

It is also aiming to improve sales mix of higher margin products, increase selection and types of house brand products, as well as derive efficiency gains from the supply chain.

Valuation in-line with historical average

Based on its annualized 1Q 2025 net profit, Sheng Siong is currently trading at a price-to-earnings (P/E) ratio of 17x, close to its historical average. 

Based on its total dividend per share of 6.4 cents in 2024, the stock trades at a dividend yield of 3.7%. 

Related links:

• Sheng Siong Group Ltd share price history and share price target
• Sheng Siong Group Ltd dividend history and forecast

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