Cash flow generated from operating activities for 3QFY2025 increased by 50.6% y-o-y to $89.0 million, supported by higher profit reported and favourable working capital changes in this period. The group ended the quarter with a cash and cash equivalents balance of $393.7 million as of Sept 30.
“In September, we accepted JTC’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,” says Sheng Siong’s CEO Lim Hock Chee in the results release, while adding that the group opened four stores in 3QFY2025, and one more in Octber. This brings the ytd store count in Singapore to 85.
On that note, Maybank Research has kept its “buy” call and increased target price to $2.55 from $2.30 previously.
Analyst Hussaini Saifee says: “We forecast Sheng Siong’s revenue and earnings to grow at a FY2024–FY2027 CAGR of 8% and 9%, underpinned by resilient macro conditions, ongoing new store additions, and potential market share gains as a key competitor remains in retreat.”
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“Following 11 store openings in Singapore in 2025, we expect seven additional stores in 2026, driven in part by expansion into malls versus prior HDB-focused growth,” adds Saifee.
The analyst notes that while 3QFY2025 was partially helped by SG60 vouchers, elevated store additions (four stores added in 3QFY2025) and promotional activities. While these helped to drive growth in the third quarter, this should also be sustainable into the fourth quarter.
Meanwhile, the analyst sees Sheng Siong as “on the right side of Singapore’s growth story”, as Singapore’s construction boom — projected to grow over 5% annually during 2025–2030 — is driving a rise in foreign worker permits. The population grew 1.2% y-o-y in 1H2025, led by non-residents, and at the current pace could hit 6.5 million by 2030.
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“Government support (SG60 vouchers valid through 2026, additional CDC vouchers in 1Q26) continues to bolster household spending. Elevated HDB supply signals more store expansion opportunities. Given the company’s low presence in malls, we think an increased penetration in malls offers another leg of growth,” adds the analyst.
Similarly, PhillipCapital is maintaining its “accumulate” recommendation and increasing its target price to $2.55 from $2.30, as the group’s 3QFY2025 results were within expectations, gross margins are creeping up and the group has a healthy pipeline of new store opening.
Analyst Paul Chew says: “We peg Sheng Siong to 23x PE, valuations the company enjoyed during its growth years… The pipeline for new stores remains robust, with opportunities in HDB and private-market locations. However, net margins will be under pressure in the near term from the new $520 million Sungei Kadut distribution centre and extension of the progressive wage model.”
The new distribution centre will enable the group to service 120 stores (currently 86) with greater automation and multi-temperature facilities, enabling faster, more accurate meat processing, food sorting, distribution and warehousing. Construction expected to begin early 2Q2026.
“During the construction phase, Sheng Siong will phase in higher leasing costs (about $2.4 million in FY2026) and lower finance income. FY2026 revenue will be supported by the 11% rise in store footprint in FY2025. Gross margins continue to creep up due to rising fresh mix,” says Chew.
On the other hand, CGS International believes that Sheng Siong’s upcoming growth plans have already been priced in. Analysts Meghana Kande and Lim Siew Khee keep their “hold” call but raise the target price to $2.40 from $2.21.
Sheng Siong held an analyst briefing too, where management communicated that it can service its larger store network through further logistical enhancements at its current distribution centre (DC).
“However, we continue to expect cost pressure from overheads which are likely to keep operating margin broadly flat over FY24024-FY2026,” say the analysts, noting that 9MFY2025 operating margin was down by 0.2 percentage points at 11.6%. The group is also planning to start the tender process for builder selection for its new DC in December, with construction expected to start by early 2Q2026 and completion by end- 2029.
As at 2.20pm, shares in Sheng Siong are up by 6% to trade at $2.46.
