The group ended 2025 strongly, with its share price rising by about 60% in 2025, significantly outperforming the 23% gain posted by the Straits Times Index (STI).
While the stock was among the top performers of the companies under OCBC’s coverage, Chu notes that the outperformance was due to a combination of strong earnings visibility, defensive nature, market share gains from store expansion, and support from CDC cash handouts and EQDP flows.
“While these drivers should continue into 2026, Sheng Siong’s valuations look demanding,” says Chu, adding that the stock is currently trading at forward P/E of 24.8 times, more than 2 standard deviations (SD) above its historical average of 19.6 times.
Meanwhile, Chu points that retail sales rose 2.7% y-o-y in December 2025, according to data from the Singapore Department of Statistics. This moderated from 6.2% y-o-y in November 2025 and falling short of consensus expectations of 8.0% y-o-y.
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For full-year 2025, retail sales growth reached 2.8% y-o-y, double the 1.4% pace in 2024 and the strongest since 2022 (10.7%). Looking ahead, OCBC Group Research expects retail sales to grow by 2%-3% y-o-y in 2026, supported by a steady pipeline of new products and consumer experiences.
As at 11.00am, shares in Sheng Siong are trading at $2.86, down 2.05% since trading started for the day, but 73.4% higher in the past 12 months.
