Sheng Siong Group Delivers Strong Growth with Market Share Gains, Target Price Raised to S$3.16 May 13, 2026
Company Overview
Sheng Siong Group Ltd operates as one of Singapore’s leading supermarket chains, focusing on providing affordable groceries and household essentials to local consumers. The company has built its market position through strategic store expansion and competitive pricing strategies across the island nation.
Strong Quarter Performance
Sheng Siong delivered robust first quarter FY26 results, with revenue and profit after tax and minority interests (PATMI) reaching 26% and 25% respectively of full-year forecasts. PATMI grew 12% year-on-year to S$43 million, driven by margin expansion of 0.7 percentage points and revenue growth of 12.4% to S$452.8 million. This marked the third consecutive quarter of low teens revenue growth, representing the fastest pace in almost five years since the pandemic period.
Expansion Strategy and Market Share Capture
The company’s growth momentum stems from both new store additions and improved same-store sales performance. Revenue growth of 12.4% was supported by new stores contributing 9.3% and same-store sales adding 3.5%. The significant improvement in same-store sales from just 0.4% in 1Q25 was attributed to six stores opened in FY24 migrating to the same-store category, along with an extended promotional period between Christmas and Lunar New Year.
Sheng Siong’s store footprint expanded 13% year-on-year to 760,000 square feet, though remained unchanged quarter-on-quarter. The company has secured four new HDB stores totalling 39,000 square feet for FY26, with another 25,000 square feet pending approval, excluding potential private real estate transactions.
Key Challenges and Outlook
Despite the positive momentum, employee costs continue to limit operating leverage. The competitive labour environment and progressive wage model in Singapore’s retail sector maintain upward pressure on staff costs, constraining margin expansion opportunities. Additionally, rising fuel and other costs due to Middle East conflicts are expected to dampen margins in the second half of FY26.
Research Recommendation
Phillip Securities Research maintains its ACCUMULATE recommendation whilst raising the target price to S$3.16 from S$2.82, representing 28x PE FY26 – levels last seen during the pandemic. The firm believes Sheng Siong continues capturing market share by taking over competitor stores, though expansion benefits will be partially offset by an estimated two store closures impacting revenue by 3%.
Frequently Asked Questions
Q: What was Sheng Siong's financial performance in 1Q26?
A: Revenue grew 12.4% to S$452.8 million whilst PATMI increased 12% year-on-year to S$43 million, supported by margin expansion of 0.7 percentage points.
Q: How significant was the same-store sales improvement?
A: Same-store sales grew 3.5% compared to just 0.4% in 1Q25, primarily due to six stores opened in FY24 migrating to the same-store category and extended promotional periods.
Q: What is driving Sheng Siong's expansion strategy?
A: The company is capturing market share by taking over competitor stores, securing four new HDB stores totalling 39,000 square feet with another 25,000 square feet pending approval.
Q: What are the main challenges facing the company?
A: Employee costs limit operating leverage due to Singapore's competitive labour environment and progressive wage model, whilst rising fuel costs from Middle East conflicts may pressure margins.
Q: What is Phillip Securities Research's recommendation and target price?
A: Phillip Securities Research maintains an ACCUMULATE recommendation with a raised target price of S$3.16 (previously S$2.82), representing 28x PE FY26.
Q: How will store closures impact the business?
A: An estimated two store closures are expected to impact revenue by approximately 3%, partially offsetting expansion benefits from new store additions.
Q: What was the store footprint growth?
A: Store footprint expanded 13% year-on-year to 760,000 square feet, with the company operating 87 stores in 1Q26 compared to 77 stores in 1Q25.
This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.
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About the author
Paul Chew
Paul has more than 25 years of experience as a fund manager and sell-side analyst. He currently covers sectors such as healthcare, electronics, telecommunications, conglomerates, small caps, and strategy.
He graduated from Monash University and has completed both his Chartered Financial Analyst and Australian CPA programme.
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